Episode #43 – The Role of Topgrading in an Employer’s Hiring Plans

Sharita: Welcome to “The Animal Health Employment Insider,” brought to you by The VET Recruiter. In this podcast, search consultant Stacy Pursell, founder and CEO of The VET Recruiter, provides insight and practical advice for both companies and job seekers in the Animal Health industry and Veterinary profession. The VET Recruiter’s mission is to help Animal Health and Veterinary organizations acquire top talent, while helping professionals attain career-enhancing opportunities that increase their quality of life.

In today’s podcast, we’ll be talking about a concept called topgrading. Welcome, Stacy. Thank you for joining us.

Stacy: Hello, Sharita. I’m glad to be here today.

Sharita: Stacy, we’re going to talk about something we’ve never discussed on our podcast before. It’s a new topic, and it’s called topgrading. Can you describe what that is for us?

Stacy: Yes, topgrading is a certain type of approach to workforce management and hiring. There are a couple of different ways that that organizations can use and implement it, but today we’re going to discuss one specific way.

To set the stage for our discussion, though, I’d like to present a formula that applies to the employment marketplace and a company’s workplace.

Sharita: What formula is that?

Stacy: It’s called “The 20-60-20 Rule.”

Sharita: Now, I’ve heard of the “80-20 Rule,” but what is this rule?

Stacy: This rule states that if you take all of the employees within an organization and analyze or assess them, you’ll find that typically 20% of them could be considered superstar employees, 60% of them are competent but not considered superstars, and another 20% are underachievers.

Sharita: Is that a rule that applies to every organization?

Stacy: It is, but you have to remember that these are just average percentages. That’s because some organizations have more superstars than others and some have more underachievers than others.

Sharita: But you’re saying that every organization has employees that fit within one of those three categories?

Stacy: Yes, that’s correct. It would be nearly impossible for a company to not have employees who fit within all three of the categories. This is why topgrading is a philosophy that applies to all organizations.

Sharita: So now that we have this formula, what is the next step in topgrading?

Stacy: Management must specifically identify which of their employees falls into those three categories.

Sharita: You mean the categories of superstar, competent, and underachiever?

Stacy: Yes, that’s right. It’s one thing to know that you have employees in all three categories, but it’s another to know exactly which of your employees fall into those categories. When you think about it, this is something that all organizations should be doing, anyway. You need to know who’s a superstar, who’s competent, and who’s an underachiever. That’s the first step in effective workforce management.

Sharita: So what’s the next step?

Stacy: Well, the next step is both logical and pragmatic. After you identify the underachievers on your team or within your organization, you should put together a plan to hire the best candidates you possibly can to replace them.

Sharita: So in essence, you’re replacing your underachieving employees with superstar candidates?

Stacy: That’s right. That’s where the term topgrading comes in. Through this process, you’re increasing the overall quality of your workforce by implementing one strategic move.

Theoretically, once an organization has implemented topgrading, their top employees may no longer be their top employees. The people that they just hired to replace their underachievers could be their top employees. Then, by extension, those employees who were previously considered to be competent would slide lower down the scale. Those at the lower end of the competent would now be considered underachievers.

Sharita: That’s because when you bring in overachievers to replace underachievers, you’re essentially raising the bar for performance across the board?

Stacy: That’s right. And as an organization, that’s exactly what you want to do with your employees and your personnel, raise the bar across the board.

And that brings us to an important aspect of topgrading, which is that topgrading should be a never-ending process. Ultimately, it won’t be effective if an organization only does it once or twice. You should be constantly looking for ways to topgrade your team, your department, and your company.

Sharita: When you say replace the 20% of underachievers, you’re talking about firing them, is that correct?

Stacy: That’s what I’m talking about. Terminations are an unfortunate reality of the employment marketplace, but they happen all the time and they happen for a good reason.

Sharita: What reason is that?

Stacy: The reason is something that we’ve talked about before on our podcast, and that’s value. Animal Health and Veterinary organizations hire and keep employees because those employees provide a certain level of value. The organization uses that value to generate revenue and create a profit. The more value that an employee provides, the more valuable they are. In other words, the more that the organization wants to keep them as an employee.

However, not every employee provides the same amount of value. Some provide more value than others, and organizations are always looking for more value. So if an organization has a chance to replace an employee that is providing a lower amount of value with a candidate who has the potential to provide much more value, then they’re definitely going to do it. And they are well within their right to do so. We operate within a capitalist economy which carries with it a “survival of the fittest” set of rules. Not only do the fittest survive, but those who provide the most value thrive.

Sharita: Is this why you emphasize to Animal Health and Veterinary professionals that they should always be striving to increase the value that they provide to their employer?

Stacy: Yes, that is exactly why. But our listeners should keep in mind that when you engage in continuous training and development, you’re not just doing so to increase the value to your current employer. You’re also doing so to increase your value to a potential future employer. That’s because if your current employer finds you valuable, then another employer will find you valuable, too.

Sharita: So when a person works to increase the value that they provide, they’re ultimately helping themselves and their career?

Stacy: Yes, that is exactly right! As a professional, you never want to find yourself in the bottom 20% of an organization’s workforce. That is not a good place to be. Even being in the middle 60% is a risky proposition, especially if your employer is constantly topgrading. No, you should always want to be among the top 20% of an organization’s employees.

Sharita: What if a person knows that they’re in the top 20% at their employer?

Stacy: Then they should strive to be in the top 10%. And then the top 5%. Career development is a never-ending journey. The good news is that the person who engages in career development is the ultimate beneficiary. You have to view it as an investment. You’re investing in yourself, not just your current job. You’re investing in the long-term health of your career.

Sharita: Stacy, I imagine that you’ve been part of searches in the past where a company was looking to replace an underperforming employee?

Stacy: Yes, I’ve been part of those types of searches. In fact, some of those searches were for high-level positions.

Sharita: And in those situations, your client came to you because they wanted to conduct a confidential search?

Stacy: Yes, that was the case. If an organization wants to replace an underperforming employee, there are a couple of options. First, they can fire the underperformer and then find a replacement for them. However, if they do that, then the position will be open and they won’t have a firm date for when they’ll have somebody to fill it.

Sharita: Are you saying that for some positions, it’s better to have an underperformer in the role rather than have the position empty?

Stacy: Yes. The cost associated with leaving a position open, especially for high-level positions, can be prohibitive. This is especially the case for positions that require specialized skills. When that’s the case, the candidate pool becomes smaller, which increases the likelihood that it will take longer to fill the position. So in such a case, an organization will hire a search consultant to find suitable candidates in a confidential fashion so that the organization will have a top-notch candidate ready to fill the position of the employee that they’re about to let go.

Sharita: And of course, the organization can’t just advertise online that they’re looking for candidates to replace somebody who’s still in the position.

Stacy: That’s right. That would alert the employee that the organization is trying to replace them. It kind of defeats the purpose of the whole operation. But an experienced search consultant can identify highly qualified, passive candidates in the marketplace, recruit them, and then present them to the organization. This allows the organization to successfully topgrade the position.

Sharita: When is the best time for an organization to start topgrading?

Stacy: Any time is a good time!

If you’re not in the habit of replacing your underperforming employees with top candidates, then today is the time to start. And remember that this is a constant, ongoing process. This is how companies gain a competitive edge in the marketplace and how they become an employer of choice. They constantly hire the best and then they do whatever is necessary to retain the best.

Sharita: Stacy, thanks so much for all of this great information today.

Stacy: Thank you, Sharita. I look forward to our next podcast!