For one night this week, millions of basketball fans fixated on the goings-on at an arena in Brooklyn even though there was no game. That’s where the National Basketball Association held its annual draft, in search of a dream many companies shoot for: a quick fix.
Indeed, as companies face growing pressure to turn in profits in a supercompetitive economy, they end up looking for superstar leaders much as the teams hope to find the next LeBron James or Stephen Curry. Yet experts say this may be one area where the NBA has a leg up on corporations, with franchises spending millions of dollars and thousands of hours gathering information on potential recruits as early as grade school. Then, before the draft, teams work out players to test their abilities and mental makeup.
By contrast, hiring decisions at most companies are often still heavily weighted toward the behavioral interview, which itself takes place only after a round or two of arbitrary job screenings. The interview itself is more subjective observation than objective data analysis.
“We bring more firepower to selecting and managing our fantasy sports teams than our business teams,” says Nathan Blain, global leader of Talent Strategy Solutions at Korn Ferry. “The data, tools, available advice, and decision-making support is superior.”
In fairness, the NBA looked for candidates to ultimately hire about 60 players, while U.S. companies each day hire an average of 170,000 people. Still, in many ways, the goals are the same. The teams want talent that can transform a franchise from mediocrity to perennial title contender. In the same vein, organizations want talent that not only do the job they’re hired to do well, but can also develop into leaders who are prepared to make difficult decisions and power the organization’s performance.
What’s more, neither sporting franchises nor companies want to make a major mistake. In the NBA, misjudging the abilities of a top draft choice can set a franchise’s quest for a title back by years. In the corporate world, the cost of replacing a manager within 6 to 12 months of their hire is 2.3 times the person’s annual salary, according to Korn Ferry Hay Group research. For a senior executive position, the replacement cost could amount to $1 million or more.
Certainly, both inside and outside arenas, there will always be some uncertainty around the actual talent pool. Despite their heavy scouting, basketball general managers must evaluate players who have never really played the game at its highest levels. Based on limited information, franchises must gauge whether a player can successfully compete against the best players in the world, as well as whether he is coachable and will mesh well with his teammates.
Meanwhile, outside the arena, corporate recruiters seek employees who can do the job, work well with others, and embody the values of the organization—but often they must base their initial impressions on nothing more than a self-serving résumé.
Though there are limitations, more companies of course are relying on data and technology to aid in hiring decisions, including social media, testing, video interviewing, and historical performance records. Experts say bringing the rigor of NBA draft picking to private sector hiring decisions would only help. “In sports you have wins and losses, playoffs, statistics, and trophies to show the value of talent,” says Blain, “but in corporate environments you don’t see that value as clearly.”