During the keynote address at the Kronosworks 2012 conference in Las Vegas on Monday, Billy Beane, general manager of Major League Baseball’s Oakland Athletics, explained to an audience of workforce management professionals how using analytics for hiring new employees is key for business.[See also: The 'Moneyball' approach to business hiring]
Beane is known to audiences worldwide as the subject of Michael Lewis’ 2003 book about baseball analytics, "Moneyball," and the subsequent film of the same name starring actor Brad Pitt as Beane.
Speaking from his own experience, Beane, who was a professional baseball player from 1984 to 1989, talked to the audience about the challenges he faced when instituting an analytical, evidence-based, sabermetric approach to assembling a competitive baseball team during Oakland’s down revenue situation in 2002. At the time, many MLB teams were using more subjective knowledge from baseball insiders, including managers and players, a system that was often very flawed, said Beane during the keynote.
Beane said that while he was criticized at first for his statistical analysis approach, he stuck with it and began to see greater results with his team and a significantly lower payroll than other teams in the MLB.
“You’re taking emotion out of decision making with this approach,” said Beane. “People asked, ‘how can you make these decisions based on mathematics?’ We took the subjectivity out of the hiring equation.”
By reevaluating and ultimately instituting new statistics-based hiring practices, Beane, and his assistant manager, Paul DePodesta, were, in 2002, competitive with larger market teams like the New York Yankees, despite Oakland’s payroll being $41 million that year compared to the Yankees’ payroll of over $125 million.
“Let data drive your hiring decisions,” Beane said. “Paul (DePodesta) said to me, ‘If you trust the mathematics, the numbers will always work.’ We were trying to create a performance-pay value. We were getting the most out of our dollar.”Image courtesy of Stephen Nakatani via Creative Commons licensing.