Getting Your Boss to Invest in Innovative Hiring Practices

 Most of you will know the importance of hiring top performers and so will your bosses, but when push comes to shove, time and time again, the hiring budget can lose out to other budgets in the race for funding. It seems like many businesses pay lip service and talk-the-talk about doing everything to find top talent but fail to walk-the-walk when it comes to stumping up hard cash to pay for your top talent attraction initiatives. This is backed up by recent research from Future Step, which showed that just 27 percent of US recruitment professionals have access to a R&D and Innovation Budget, even though 74 percent of HR professionals think their organization should be innovating more in recruitment.

This means that corporate hiring professionals need to be presenting some pretty compelling arguments to budget holders and decision makers if they are going to prize any funding from the iron, or should I say golden grip of the finance director.

And I think one of the strongest cases that can be put forward is the actual difference that can be made to the bottom line if you hire more top performers. This means actually demonstrating with numbers the exact difference that top performers make so you can present it to the CEO and decision makers in a language that they understand – thereby increasing your chance of securing more innovation budget.

Well, what actual difference to the bottom line do top performers make? (We know it’s a lot, perhaps 5 or 10 times.) There are many statistics flying around as to the difference that top performers make versus average performers, but I think the most compelling evidence you can present will be your own internal calculation for a performance differential in your firm, as they are indisputable. And below I have set out some tips on how to calculate this.

How to Calculate Your Top Performer Differential

Based on a tried and tested formula I discovered in the book Performance Management System , you start by calculating your average output per employee and top performer output.(You might want to segment this into functions so it’s easy to compare output, e.g. sales, production, marketing etc.)

You then divide the top performer outputby the average output per employee toget your top performer increase factor, the ration of which is usually between 0.5 and 3.

After this, you can calculate average revenue per employee, by dividing the department revenue by the total number of employees. You can calculate profit per employee if you really wish.

Then you take the top performer increase factor from above and multiply this by the average revenue per employee and this tells you the revenue generated by top performers.

Now, I am sure you can guess the final step. Subtract the revenue per employee from the revenue generated by a top performerand this tells you the revenue added each year by hiring or keeping hold of a top performer.

Now, if this figure doesn’t convince decision makers of the ROI of improving your HR practices so you can attract and identify top performers then I don’t know what will.