Finding the right talent is a tricky job. You review resumes, take time for phone calls, Skype calls, video interviews, and even set up face to face meetings and group sessions.
How on earth are you supposed to know which candidate is best for you?
Often, people wait too long to hire. You see a candidate you like, but in the back of your mind, you think: "What if someone better comes along?"
It's a fair (and logical) question.
Or, perhaps, you hire far too early, often at the first whiff of a competent candidate. This is also a mistake, because your impatience could mean losing out on the star candidate that was about to walk through the door.
Here's where the 37 percent rule comes into play.
It's known in the field of applied probability as the "optimal stopping theory." If you interview candidates one by one, you should rank them, build a base knowledge of what your ideal candidate looks like, and then hire the first candidate that fits your description after interviewing 37 percent of your candidate pool.
Let's explore how this can help you land your next star (and acknowledge a few exceptions to the rule).
How the 37 percent rule works
Let's take a moment to briefly break down the necessary steps.
Step 1: Estimate how many people you might interview for the position. This is value n.
Step 2: Calculate the square root of that number, √n.
Step 3: Interview and reject the first √n people; the best of them will set your benchmark.
Step 4: Continue interviewing people and hire the first person to exceed the benchmark set by the initial √n candidates.
It's believed that American mathematician Merrill Flood was the first person to solve the optimal stopping theory problem, way back in 1961. The idea is basically a mathematical formula to help you hire talent.
But it's more specific than that. It helps you know when it's statistically most advantageous to pull the trigger on signing your next candidate.
Applying principle into practice
Statistically speaking, the 37 percent rule should give you the highest chance of landing your star hire. Still, there are other factors that complex numbers can't calculate. Aura, presence, personality--all are key human attributes that can't be defined on a spreadsheet.
So how can we take the 37 percent rule and apply it in practice? Well, it carries an extremely important message for any in-house recruitment team or staffing agency.
Firstly, do your research and due diligence before you make a hire. You need to create an ideal candidate persona with a key list of attributes and qualities that you're looking for. This is definitely helpful in matching up character traits, skills, qualifications and much more.
Secondly, the rule proves that we need to think in the mid-term. Don't act too hastily or languish for too long.
Decide on a total number of candidates that you'd like to interview, and agree that you won't surpass that figure. Then, bring in a number of those candidates and start to work out which people best match the persona you've created.
Allow for the possibility that your next interviewee might be even better than the great candidate you've just interviewed now. But again, don't be slow to act. It's all about finding the right balance that works for you.
If It helps, you can set a date by which you will decide to finalize a hire.
Take time to properly interview and vet your candidates, build a comprehensive profile for the role you're looking to fill, and find a balance of time or set date by which you agree to hire someone. Make sure this doesn't happen too quickly or too far down the recruitment path.
If you follow these steps, you're highly more likely to find a better suited candidate, and you won't spend time anguishing or regretting about that superstar you wish you'd signed when you had the chance.