Assembling a qualified candidate queue is paramount in recruiting. Studies indicate that an erroneous hire can cost a company 15x base salary in hard costs and productivity losses. In the startup world, these mistakes can be lethal as startups highly leverage their precious resources of capital, talent and time. Though used metaphorically here, Sackett has shown that statistical confidence is proportional to the square root of sample size, c α √n. Increasing sample size by a factor of two, increases “confidence” over 40%.
Queue size and quality is the responsibility of the headhunter. It’s the recruiter’s secret sauce. Does she have the Intelligence to understand a business model and convey a value proposition to a candidate, does she have the managerial experience to understand a candidate’s knowledge of organizational theory and behavior, does she have the sourcing acumen to utilize network effects and Boolean search. And most importantly, does she have the work ethic to constantly reach out to qualified passive candidates and then reach out to even more qualified passive candidates.
A qualified candidate queue provides the CEO and/or Board with “statistically confident” data and increases the probability of a successful hire. For the candidate, being on the “short list” provides an external validation of her resume’s credentials and, if the headhunter has done his job, her actual skillsets and accomplishments.