Game theory is all about what can be done to increase the odds of a win. In poker, this is usually achieved by card counting. The more cards exposed, the better you know the likelihood that your hand is a win. In other words, it is important to consider what will impact the likelihood of an event occurring. Recruiters who want to reduce the uncertainty of the recruiting process and their income need to learn to think like a professional gambler.
Sometimes, game theory is counterintuitive.
Renowned gambler Matthew Benham met human performance researcher and author Ramus Ankerson one day in London. They began talking, of course, about football (soccer). Ankerson had just acquired the Brentford Football Club and invited Benham to help him run it. They applied game theory to football.1
They theorized that because soccer is one of the world’s unfairest sports in that the win/loss outcome of a game is no accurate measure of the actual performance of the team, there must be a better way to evaluate teams than the Team Table. Using SmartOdds, in-depth quantitative and qualitative research and analysis, they focused on developing a team capable of creating more opportunities for goals (higher probability) rather than star players. As a result, the Brentwood team has won several division titles in spite of being a much less-well-funded team.
“From a professional gambler’s perspective the key to placing a good bet is to continually update your position with relevant insights that impact the probability of an event occurring. Rather than trying to be right; gamblers try to less wrong with time.” – Mike Walsh, The Algorithmic Leader
Recruiters need to develop a probabilistic mindset by focusing on ways to manage the variables of the process to increase the likelihood of a hire.
Here are some examples:
- Increase the number of qualified candidates recruited – Recruiting is much like investing in startups. Venture capitalists look for 10x returns on their money, which sounds greedy until you realize that investing in startups is risky and many don’t work out as expected. Typically, only a third of startups end up providing a return.. In recruiting, we talk about the rule of three – three qualified candidates for each position. This increases the likelihood of a hire.
- Close candidates properly—Candidates who have not been ‘closed’ on compensation, schedule, position duties, start date, relocation impediments, competing job offers, etc., will likely blow up the deal in the 11th hour. We refer to these as IEDs (improvised explosive devices), and they are best removed before a march to the battlefield, i.e., the submission.
- Sell the Timeline—Although it is not a strong sales point, we need to screen all candidates for a 30-day hiring timeline since we often lose candidates due to the protracted timeline. The second important game-changer here is what we refer to as “keeping the bread warm,” strategically staying in touch throughout the process.
- Pay attention to where your leads come from. Not all leads are created equal, and you will discover that some sources are better than others, but only if you track this. By focusing on the best leads, you can increase the number of qualified candidates and reduce the time necessary to land them.
You can only deal with the uncertainty of the recruiting business if you embrace probabilistic thinking. We tend to look at the world in black and white: things that can be planned and managed and are therefore certain and those that are completely unpredictable. By managing the variables, we can dramatically improve the outcome of seemingly unpredictable events.
Think like a gambler!
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1 Brentford’s Moneyball Way To Beat Football Teams With Huge Budgets
