Week of December 16th, 2024

Week of December 16th, 2024

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Pareto Optimality in RecOps by Jeremy Lyons

More than likely you have heard about the Pareto principle, though you might have heard of it by its more commonplace sobriquet of the 80/20 rule. The Pareto principle, named for economist Vilfredo Pareto, states that for many outcomes, roughly 80% of consequences come from 20% of causes. Some examples of this are 80% of sales coming from 20% of clients, 80% of issues are caused by 20% of the causes to quality issues, etc. However, while many people know about the Pareto principle, in RecOps we deal predominately with Pareto optimality and Pareto efficiency. So, let’s dive in.

What is Pareto Optimality?

Pareto optimality, is an economic state where resources cannot be reallocated to make one individual better off without making at least one individual worse off.

What is Pareto Efficiency?

In economics, a Pareto improvement formalizes the idea of an outcome being "better in every possible way". A change is called a Pareto improvement if it leaves everyone better-off (or at least as well-off as before). A solution is Pareto efficient or Pareto optimal if after all possible improvements, there are no longer any ways left to make one person better off without making some other person worse off.

But ok, you didn’t come here for an Econ lesson, you came here for RecOps knowledge.

In your RecOps role, you have likely been working to create Pareto efficient solutions from the minute you started by balancing tradeoffs so everything feels equal. If you came up as an RC (or still are), you likely did this without even knowing when it came to scheduling. For example, you worked on load balancing or placing your interviewers in their preferred times so that candidates had got their interviewers at their best. Vice versa, you took into account candidates’ preferences for interview times or locations and, if you couldn’t accommodate them, you did what you could to make sure they weren’t too inconvenience.

Why is understanding Pareto optimality important in RecOps?

Because it is about efficiency and proper resource allocation. For example, if you are about to implement a new tool or process, but only a certain number of users will receive it, the non-receiving group will be disadvantaged. This likely means that you will want to think of ways to ensure that the disadvantaged group is given an advantage in the next round of improvements or that you make other changes so that they are less inconvenienced (e.g., a comp increase, etc.).

What are some other situations in RecOps that articulate Pareto optimality?

  1. Recruiting Metrics and KPIs—Example: Allocating focus between time to hire and quality of hire. A Pareto-optimal approach ensures that reducing the time to hire does not significantly degrade the quality of hire, balancing these metrics for maximum efficiency and effectiveness.
  2. Resource Allocation - Example: ensuring that hiring for key revenue-generating roles does not detract from compliance or diversity initiatives.In resource-constrained environments (e.g., limited budgets, small recruiting teams), achieving Pareto optimality might mean assigning resources to the most critical roles or stages of the recruiting pipeline.
  3. Internal Mobility Programs—Designing an internal mobility program that supports career development without significantly disrupting team operations could achieve Pareto optimality. Employees would move to roles that enhance their skills and satisfaction without negatively affecting team performance.
  4. Technology Integration - When building a talent acquisition tech stack, Pareto optimality can guide the integration of tools such as applicant tracking systems (ATS) and sourcing tools. The aim would be to achieve seamless operations without overloading systems or creating redundancies.
  5. Stakeholder Management - Recruiting involves collaboration between hiring managers, candidates, and HR teams. A Pareto-optimal strategy ensures that meeting hiring managers' needs (e.g., fast shortlists) does not harm candidate experience or overload recruiters.


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🎉 Reminders and Disclaimers 🎉

  • If you’d like to contribute a job, an article (one you found or wrote), or you are a company and have a product update you want featured, contact Jeremy Lyons.
  • Please use this form if you or someone you know would like to be featured in our #YourNextHire section. The only condition is you are a RecOps professional.
  • Disclaimer #1The views and opinions expressed in this article are those of the author, and they do not necessarily reflect the official policy or position of any other agency, organization, employer, or company. Assumptions made in the analysis do not reflect the position of any entity other than the author. As critically thinking professionals, these views are always subject to change, revision, and rethinking at any time. They are not to be held in perpetuity.
  • Disclaimer #2: We are sponsor-free. No company below has paid us to advertise their products or share their open jobs. If that changes, we will deliberately call out where we stand to benefit. Additionally, sharing these opportunities and information should not be read as support for these companies or their practices. Regarding jobs, we share these opportunities with the community and only post roles from the company's website. We encourage possible candidates to research each one, as their inclusion does not mean we support the companies or their values.


Until next week, Regulators 😊

Chris Abbass

CEO @ Talentful | #1 Global RPO designed for technology companies

1w

Thanks for the mention Jeremy A. Lyons 🙏

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Lou Adler

CEO, Performance-based Hiring Learning Systems. Author, Hire with Your Head and The Essential Guide for Hiring.

2w

Jeremy A. Lyons - we're working on study to determine first year turnover and engagement by source of hire. Do you have any info regarding this or interested in helping collect it?

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Martyn Redstone

Conversational AI | AI Strategy | AI Governance | AI Policy | Specialist in AI Transformation of Recruitment and Talent Functions

2w

Thanks for the mention, mate

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