In 2014, Gallup published an incredibly well-researched article titled “To Win With Natural Talent, Go For Additive Effects” claiming that combining four specific human capital strategies could drive up to 59% more growth in revenue per employee than traditional hiring tactics, by creating “the additive effect.”
The authors, Randall Beck and Jim Harter, further claimed that while combining all four strategies mentioned in their article would yield the highest benefit, the most critical of the four strategies was selecting and deploying the right managers.
Although this article may seem dated, the concept is still truly groundbreaking if applied correctly to hiring strategies. All the latest press and new research on hiring based on skills and competencies, in fact, share the same tenets as this additive strategy: hire, train and promote based on an individual’s true skills and “natural talents” (and how they relate to the role at hand) and you’ll reap the rewards.
At Crosschq, we support all four human capital strategies mentioned by Beck and Harter, with a special focus on engaging with candidates and gathering the right information to make data-driven hiring decisions.
When you hire individuals with natural talent and keep lines of communication and engagement open throughout the hiring process and beyond, you end up with new hires who check the most important boxes, not just the easiest ones.
These conclusions were in part built on an earlier Gallup article from 2012, which pointed to data which showed that organizations that engage their customers and employees experience a 240% boost in performance-related business outcomes compared with organizations that skip one or both steps.
Here’s how to hire the Gallup Way - the Crosschq Way - the right way, with the Additive Effect.
Understanding the Additive Effect
When you have two different processes that each support your organization in a positive way, but when combined provide even more support, you’re implementing the additive effect. Each process has a set value, but for the processes to be additive, when combined none of them can lose any efficacy.
In some organizations, two different solutions might each result in a 10% boost in revenues. However, when they are both implemented at the same time, the net boost is only 17%. That’s because each solution has one or more points that conflict with the other.
However, when you have two solutions each with a 10% boost individually, and the net boost when both are implemented adds up to 20% you’ve achieved the additive effect. The solutions or processes all work together flawlessly.
Gallup has researched and demonstrated four human capital strategies that can significantly increase the revenue each employee brings in to your company:
#1: Choose managers with natural talent
This is the most important of the four strategies. Companies choose the wrong managers 82% of the time. Why? Simple—great managers don’t grow on trees. In fact, only one person out of 10 has the natural talent to be a great manager.
So, how can you fix the problem and hire the right talent for these all-important managerial positions? Start by throwing out all but the bare bones of each candidate’s resume and focusing on skills and strengths.
It doesn’t really matter where your candidates went to school, how long they’ve been in the workforce, or their performance as an individual. The key to hiring the right managers is designing your candidate selection process to surface top players based on natural talent – the skills that indicate a competency a for managing others.
Crosschq 360 is ideal for this purpose. Originally a way to streamline and speed up the reference checking process, Crosschq quickly evolved into a tool for leveling the candidate playing field and making it easier to compare candidates on what matters most, including rankings on skills and competencies specific to any role.
With Crosschq, you can skip the hours spent on the phone trying to get useless answers to useless questions, and instead gather actionable data that gives you the down-low on your candidate pool.
When it comes to honing in on talented managers, for example, you can build strong, data-rich 360 reports by asking questions about your candidates’ ability to:
- Inspire others
- Overcome adversity
- Build strong relationships
- Hold people accountable
- Drive positive outcomes
- Make tough, unbiased, performance-based decisions
With the ability to ask every mentor or colleague of your applicant the same questions combined with a simple 1-5 scoring system, it’s easy to see manager-ready candidates rising to the top. You can fast-track such candidates to the interview stage with a data-informed process.
The benefit of using Crosschq 360 to help you improve the Quality of Hire among your managers is measurable: When companies consistently and intelligently select the right managers, they can achieve up to a 27% higher revenue per employee than average.
Hiring successful managers can result in a
27% higher revenue per employee than average. - Gallup
#2: Support great managers with strong individual contributors
Besides hiring great managers, organizations that focus on employee selection and development based around individual natural talents can further advance business growth. By using a scientific, systematic approach with each hire, companies can reduce variance and make performance more predictable.
However, most companies miss the mark by focusing on education, work experience, and hard skills, without even attempting to gauge if their candidates have the natural talent, skills and competencies to excel in a role.
Shifting to an approach that puts natural talent in focus can transform recruitment strategies, improve benchmarks for KPIs related to Quality of Hire, and make new hire performance more predictable. Hiring for natural talent helps:
- Streamline decision making
- Increase productivity
- Remove bias
- Improve diversity
- Enhance candidate and employee engagement
Crosschq 360 helps you identify these individual contributors in the same way it surfaces top managerial talent. You can look for and pull out candidates who display key candidate quality indicators—metrics known to correlate with Quality of Hire.
With each digital candidate check, you gain more concrete information that can be used to compare candidates, structure useful interview questions, and help you arrive at data-driven hiring decisions.
The additive effect of selecting naturally talented individuals to fill your teams equals 6% higher revenue per employee, bringing the total up to 33% higher growth potential for your organization.
Selecting naturally talented employees
brings a 6% higher revenue per employee. - Gallup
#3: Set the stage for continual engagement
Companies with engaged workforces stand head and shoulders above their competitors, realizing up to 147% higher earnings per share (EPS). While building teams led by great managers and filled with strong contributors, don’t forget to measure, track, and boost engagement at every juncture.
Gallup's famous Q12, a 12-item employee engagement assessment, has long been used to measure employees' involvement in and enthusiasm for their jobs and workplace. High scores indicate commitment, loyalty, and a willingness to go the extra mile; all signs of high engagement.
However, developing engagement as a cornerstone of your company culture begins in the recruitment phase. Candidates who are engaged during the hiring process are more likely to stay in the hiring funnel instead of dropping off, and remain engaged post-hire.
Crosschq 360 allows candidates to perform a self-assessment first, knowing that the same questions will be presented to their former coworkers and managers. By getting employees engaged before they are even hired, you set expectations for engagement moving forward.
A company culture built on engagement can lead to up to 18% higher revenue per employee, for a running total of 51% higher growth potential when combined with selecting great managers and strong individual contributors.
A company culture built on engagement can lead to
up to 18% higher revenue per employee. - Gallup
#4: Concentrate on strengths, not weaknesses
Companies who encourage employees to play to their strengths instead of forcing them to work endlessly on weaknesses end up with a workforce that is six times more likely to be engaged, leading to organizational success.
While weaknesses shouldn't be ignored, focusing on strengths gives your managers a better chance to develop each team member as who they are instead of trying to mold them into someone—or something—else.
When new hires are allowed to play to their strengths, they're
- More engaged
- Less likely to leave the company
Crosschq 360 skills and competency reports show you clearly what your candidates (and employee) strengths are. You can refer managers to that data after hires have been made, so each employee can be trained and utilized for maximum productivity and job satisfaction. Skills and competency insights can help tremendously with workforce planning, job fit and ultimately productivity and retention.
This additive effect can deliver up to 8% higher revenue per employee. A total of 59% higher revenue growth potential can be achieved simply by hiring great managers, supporting them with strong individual contributors, building a culture of engagement, and focusing on strengths.
The additive effect can have a significant impact on Quality of Hire, which in turn positively affects an organization’s bottom line. Employees with higher QoH scores can prove to be 400% more productive than their coworkers.
Focusing on strengths can deliver up to an
8% higher revenue per employee. - Gallup
Making the Additive Effect Happen
Gallup estimated that less than 1% of teams fully apply all four of these human capital strategies. But look at what could happen if you got more people in your company on board with these goals:
The additive effects of all four of these strategies
can result in a 59% higher revenue per employee. - Gallup
It’s time to jumpstart your recruiting game and make all of the numbers add up. By leveraging these four human capital strategies using Crosschq 360 as a starting point, you can
- Identify and fastrack manager candidates with “natural talent”
- Hire strong individual contributors who will elevate your workforce
- Set up teams for success with an employee engagement culture
- Build stronger employees by focusing on what they are best at
- Improve Quality of Hire across all levels of your organization
- Increase financial revenues by boosting the value each employee provides
Are you ready to gain the additive effects of the right hiring strategies? Schedule a Crosschq 360 demonstration today.
Get started and see how you can optimize your hiring process, improve Quality of Hire and drive real business impact today.
- Increase Quality of Hire by 34%
- Boost recruiter efficiency by 28%
- Reduce time to Hiring Intelligence maturity by 84%
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