What’s Topgrading, and why should I care?
Went for a walk to pick up some food in Old City, Philadelphia with Nick of Factor Media, a fellow entrepreneur who works out of the same co-working space that I do – IndyHall.org. We started talking about the challenges of finding and hiring the right people. He shared about this Topgrading approach to hiring that he has adopted for his company.
He loaned me Topgrading: How to Hire, Coach and Keep A Players by Brad and Geoff Smart, which contains some must-use hiring practices.
Fill every position in your organization with an A player from the top down.
Brad and Geoff Smart define A players as the top 10% of talent at a given salary level. So if you’re paying a customer service representative a salary of $40K, you might as well hire the top customer service representative you can for $40K/year, instead of settling for a mediocre $40k/year one.
They convincingly explain the cost of employing B and C players. You have to look at the difference between the value an A player can bring to your business vs. the cost of employing a B and C player who you will most likely have to replace. They estimated that the true cost of hiring B and C players is around 15 times the base salary. So you hire a weak $40K/year customer service rep and the true cost of that hire is really $600K ($40K * 15)!
Past performance is the best predictor of future performance.
Next the Smart brothers lay out a rigorous screening, interview, and reference check process that picks a part a candidate’s education and work history to reveal performance patterns, which help you predict how they’ll perform the future.
During the screening process, Topgrading requires each candidate to account for every position they’ve had since starting to work full time with exact start and end dates, compensation history, names and titles of each boss. During the screening interview, they recommend having the candidate identify what their strengths and weaknesses were for each of their last 5 positions, and rate their last 5 bosses.
For the in-person Topgrading interview, you’d dig deeper into the candidates past performance asking the candidate to tell you about accomplishments, failures, mistakes, and what they learned at every point in their education and job history. This gets past their pat answers: the one accomplishment that they’re most proud of, and that one weakness that seems to afflict every candidate: I’m too much of a perfectionist!
For reference checks, the Topgrading philosophy is, “No reference check, no job offer!” Secondly, you tell the candidate who you want to talk to: three of their past bosses. Thirdly, ask the candidate to help setup the reference check interviews.
The Smart brothers make the case that A players most likely left on decent terms and have maintained professional relationships with previous bosses, and will be willing to reach out to them even if they haven’t stayed in touch.
Always be recruiting and re-recruiting.
Topgrading calls it building your virtual bench of A talent, while Erik Herrenkohl in How to Hire A-Players calls it building your farm team. Either way, you want to be continuously meeting with, interviewing, and staying in touch with A players or potential A players so you have your own homegrown talent pool to tap into when a position opens up.
The Smart brothers also emphasize re-recruiting or being very intentional in retaining your A players by constantly assessing your team and keeping them challenged, happy, and engaged.
For more on building your own candidate pool of A players, check out Hire People You Actually Know? Brilliant!
And have a great Thanksgiving, and just worry about enjoying good food, family, and friends, instead of hiring!