Is Past Performance A Reliable Predictor of New Hire Success?

Most employers and recruiters take behavioral interviewing for granted. It is thought to be the most reliable form of interviewing, with studies as recent as 2004 and 2007 suggesting that structured behavioral interviewees have a 62 percent predictive validity, meaning that they will accurately predict the future performance level of a candidate 62 percent of the time. This makes it the second most reliable form of assessment, second only to Assessment Centers with near 70 percent predictive validity.

So, what’s the story here then? Case closed isn’t it? Behavioral interviewing works, doesn’t it? It does, but there are two studies which suggest to me that it is not the Holy Grail of assessment, and that there are more cracks emerging in the paradigm of past performance reliably predicting future performance.

Take this dramatic sounding whitepaper from the Corporate Executive Board (via HBR), titled, “The End Of Solutions Sales,” which talks about the how the sales climate has gone through a shift from “solution selling” to “insight selling.” Yes, for the last 20 years or so, until quite recently, sales people were selling into an environment where organizations had a clear vision and established demand, which suited solution selling. But, due to increased market volatility, and organizations becoming more agile, uncertain and frankly confused, companies often don’t know what they need and it’s up to the sales person to deliver insight to help the customer establish their needs. It’s known as insight selling. And the interesing finding here was that different skills and qualities are required to sell in an insight selling climate compared to a solutions selling climate. This means that your star performer candidate who may have excelled for the past 10 years in a more solution sales responsive climate could start struggling in the more insight sales responsive environment we are operating in – and vice versa. The point here is that in the sales arena, at least, past performance may not be a reliable indicator of new hire success.

These cracks in the past performance predicts future performance paradigm are not just limited to the sales vertical, they are more far reaching than this, and are thought to stretch across the organization to the management and leadership layer. Take the findings of this fascinating study by Egon Zhender of 800 executives from around the world, which revealed that 78 percent of executives said that past performance is no longer the best predictor of success in a new role. Also, 87 percent noted that strong interpersonal traits are a key differentiator when identifying a new leader. Why? They put this down to a collapse of trust in leadership, following the financial crisis and recession, (reflected in low employee engagement levels worldwide), which requires leaders to be able to win back the hearts and minds of workers, which requires a different kind of leadership. Once again, someone who performed well as a leader in a pre-financial crisis climate might not perform so well in a post-financial climate.

So, what’s being suggested here? Dispense with behavioral interviewing and leave a vacuum? Of course not; both the HBR and Egon studies talked about developing assessment processes which place greater emphasis on specific interpersonal skills that take on game changing importance in the post-financial crisis, but volatile global market. So, while I am in no way calling for the end of behavioral interviewing, it is not the Holy Grail of assessment it once was and there are cracks appearing. In certain niches, assessment should be based on assessing for interpersonal skills relevant to the climate they are in now, in addition to purely focusing on their past performance in what has become an irrelevant or obsolete business environment.