Latest / Hiring & Firing with Fexingo: Recruitment, Performance, and Workforce Decisions / Why You Should Interview the Person Who Almost Got the Job
Transcript
- Lucas: So you go through a full hiring process — phone screen, two rounds of interviews, a case study — and you end up with two finalists you'd be happy to hire. You pick one. And the other — you let them drift away. Luna: That's basically every company's default, right? They send a polite rejection and move on. Lucas: Exactly. But a 2025 study from the Society for Human Resource Management tracked 1,200 finalists across 40 companies and found something counterintuitive: the people who finish second in a hiring process often outperform the people who finish first. Luna: That's a pretty strong claim. What's the data? Lucas: The study looked at candidates who came within one interview of an offer — so they were in the final round, didn't get the job, but were subsequently hired into a different role at the same company within 12 months. Those 'silver medal' hires had a 92 percent one-year retention rate, compared to 78 percent for first-choice hires. And in performance reviews, they scored 16 percent higher on average. Luna: Sixteen percent is huge. Why would second-place candidates outperform the people who were originally picked first? Lucas: The researchers pointed to two factors. One is that the first-choice candidate sometimes gets complacent — they were pursued, they negotiated, they might feel like they've already won. The second-place finalist, on the other hand, experienced a near miss. And there's a psychological effect called the scarcity effect — once you're denied something, you want it more. So when they do get an offer, their commitment and motivation are higher. Luna: So it's not just about the candidate's skill set — it's about their mindset going in. Lucas: Right. And the study also controlled for skill — they matched candidates on experience and interview scores. The difference was purely motivational. The near-miss candidates felt they had something to prove. Luna: That makes sense. But it also means the company has to actually track these people and reach back out. Which most don't. Lucas: Exactly. And that's where the practical side comes in. Companies like Progressive Insurance and Men's Wearhouse have built what they call 'second-look' pipelines. They tag final-round candidates in their applicant tracking system — basically a 'silver medal' tier — and send them personalized follow-up emails that acknowledge their performance and invite them to apply for future roles. Luna: What kind of response rate do they get? Lucas: Progressive reported that around 40 percent of those tagged finalists applied for another role within 18 months. And because those candidates already passed the initial screening and cultural fit tests, the time to fill for those roles dropped by 30 percent. You don't have to re-interview someone who's already been through two rounds and a case study. Luna: That's a huge efficiency gain. And it also changes how you write rejection emails — you're not closing the door, you're keeping it slightly ajar. Lucas: Exactly. Instead of a generic 'we've decided to move forward with other candidates,' you say something like, 'You were one of our top two finalists. We'd love to stay in touch and consider you for future openings.' And then you actually follow up. That's the key. Luna: You know, this reminds me of something I've seen in sports — the 'silver medal' phenomenon. Studies of Olympic athletes show that bronze medalists are often happier than silver medalists, because silver is a near miss — you just lost gold. But in hiring, that near miss actually becomes a motivator. Lucas: That's a great parallel. And it ties into something else the study found: second-place hires had lower turnover risk because they didn't suffer from what the researchers called 'choice overload.' They weren't weighing multiple offers. They were grateful for the opportunity. Luna: But there's a potential downside, right? If you consistently hire the runner-up, you might be signaling to your team that you didn't get your first choice. Lucas: That's a legitimate concern, and the study addresses it. The key is that you're not hiring the runner-up for the same role — you're hiring them for a different position later on. So the team never knows that this person was a finalist for another role. They just see a strong new hire. Luna: Right. So it's not about settling for second best. It's about building a broader talent pipeline from your own rejection pool. Lucas: Exactly. And the data shows it works. Companies that implemented a formal 'silver medal' program saw a 20 percent increase in overall hiring quality within two years, as measured by performance ratings and retention. Luna: If these conversations have moved your work forward in some small way, it's worth knowing that this show is entirely listener-supported. A handful of listeners chip in each month through buy me a coffee dot com slash fexingo, and that's literally what funds making this many episodes. Lucas: Yeah, it's a small group, but it makes a real difference in keeping the show ad-free and independent. Appreciate everyone who's part of that. Luna: So back to the silver medal finding — what's the simplest step a company can take starting tomorrow? Lucas: Create a 'silver medal' tag in your applicant tracking system. Any candidate who reaches the final round and doesn't get the offer gets tagged. Then set a monthly reminder to review that list and send a personalized check-in email. Even if you don't have an open role, just staying on their radar keeps the door open. Luna: And that email should be written by a human, not an automated template. Lucas: Absolutely. The SHRM study found that response rates doubled when the email was signed by the actual hiring manager, not by a generic 'talent team.' People want to feel seen, even in rejection. Luna: One more thing — does this work for all roles? Or is it more effective for certain types of jobs? Lucas: The effect was strongest for roles that require high cognitive complexity — engineering, product management, analytics. For high-volume, low-skill roles, the retention benefit was smaller but still positive. So it's not a silver bullet, but it's a low-cost, high-impact strategy for knowledge work. Luna: And it flips the script on rejection — instead of a dead end, it becomes a deferred start. Lucas: Right. And that's a mindset shift that benefits both the company and the candidate. The candidate walks away feeling respected, and the company builds a talent bench without any extra sourcing cost.