Top Grading


21 October 2010


Having run banking operations across the globe, CUNA Mutual CEO Paul Walsh has often come up against poor recruitment. As a result, Paul has gained insight into the financial and motivational implications this can have on an organisation. Paul discovered a revolutionary technique that has been proven to get the right people into the right jobs, save money for the company, and helped CUNA Mutual spearhead growth of 22% year on year.


Recruiting, motivating and retaining top talent is the greatest challenge that any and every CEO faces. It is the only sustainable source of differentiation in the leadership and direction of a business.

This is a challenge I first came across during my time at Gulf Bank, and although I certainly did not fail in recruiting staff it was not until my arrival at Barclays that I was introduced to the Top Grading methodology. This made me realise how properly conducted and systematic recruitment made a huge difference to morale and the bottom line.

The essence of Top Grading is to establish and hire "A" players, through unique marathon interview methods rather than just a CV and short interview alone. This means it is not always the standout or most experienced person demanding the highest wage that is most suitable for the position. It is also an alternative for small organisations to group interview techniques as Top Grading ensures relationship building and interaction between candidates and the management team.

The final interview process is longer than traditional sessions but within a more relaxed setting concentrating on the consistency of the candidate's demeanour. This removes the ability of candidates to put on a show and exposes their true working nature.

I quickly realised the benefits that implementing a more thorough interview process could add to developing a cohesive and successful team. I am confident that the Top Grading methods used in recruiting this team enabled us to successfully transform Barclays Home Insurance from a wilderness product to the largest acquiring brand in a much shorter period of time.

"We have found that the cost of recruiting the wrong person is a total of two years full pay."

The results for CUNA Mutual Group

Since my 2007 appointment as CEO of CUNA Mutual Group Europe we have used Top Grading for all our management recruits, because it significantly increases the probability of hiring the best person for the role and reduces the risk of a mistaken hire. The process aligns perfectly with mutuality as it is all about time investment and long term planning rather than quick fixes.

Since implementing Top Grading interview methodology our unplanned attrition at CUNA Mutual Group, including probationary employment periods is only 5%. We have also calculated that we have saved thousands of pounds through hiring the correct staff and retaining and motivating them.

We have found that the cost of recruiting the wrong person is a total of two years full pay for an employee wasted – at least £60,000.

We established this by factoring in costs for recruitment including staff time, giving us an initial return of around six months salary. However, the costs go much further as standard recruitment takes three months; having the wrong person working in a role for a probationary period and then a corrective action period accounts for another nine months pay adding another year to the costs.

Once the problem is identified the cost of managing performance including any exit agreements is equivalent to another six months pay – totalling two years.

Whilst additional manpower is required for Top Grading , ultimately it is an investment that will result in a more efficient and improved workplace. The process of Top Grading illustrates the up front investment that we, as a mutual organisation, are willing to put in to ensure the right end result – ultimately a lower staff turnover means we provide a better service to clients and consumers.

The basics

To successfully top grade you need to create a 'pen picture' of the preferred candidate in advance, through consulting stakeholders and colleagues.

"At CUNA Mutual Group it has been a resounding success and ensured we have a forward thinking and firm management team."

This covers core skills, competencies and behavioural traits as lead indicators for the role alongside technical qualifications.

Once the target profile has been established and initial selection finished, at the heart of Top Grading for recruitment is a process-based interview that takes approximately three to four hours, in an informal and relaxed setting.

The nature of the interview reflects the ethos and values of CUNA Mutual, as the process is considered an investment that looks beyond a quick return, and results in sustained growth and long term performance.

The interview is conducted by a team of three – the sector Head, the CEO and the HR Business Partner.

Key interview aims

  • Establish if the candidate not only has key competencies for the role but that these have been consistent along with their traits and behaviour over time.
  • Track candidate behaviour to identify patterns that reinforce their demonstration of these competencies, and any others identified during the course of the interview.
  • Establish if personality traits may not support the candidate's qualifications for the role and may indicate that the candidate is not suited to this or some other role.
  • Check references on the basis of their competencies, behaviours or initiatives used to demonstrate those behaviours with colleagues / peers.

This may seem standard and good practice but the experiential nature of the interview – almost like a journey the candidate embarks on is far removed from any interviews I had experienced before.

I would advise that Top Grading is a major time investment from beginning to end and is "all hands on deck" recruiting. Processes such as adequately training the interviewers and assessing the candidates can take a lot longer than traditional methods and senior management and CEO involvement is crucial but takes focus off other key tasks.

However, as part of this, current staff are also Top Graded as A, B and C players, enabling management to offer training and support where possible to help whole teams become

A players within their roles or find them new ones that are better suited.

"I would advise that Top Grading is a major time investment from beginning to end."

At CUNA Mutual Group it has been a resounding success and ensured we have a forward thinking and firm management team committed to the company's long term business goals. Our business is heavily dependent on Intellectual Property and we recognise that our people, our culture and our organisation are the ingredients of that formula.

People are our core differentiation and the source of our future franchise health and after the initial cost of implementing Top Grading, the cost savings have allowed us to hire more staff and look after those we currently have.

Paul Walsh, Executive Director and CEO, CUNA Mutual Europe.

Prior to joining CUNA Mutual Paul had been Commercial Director for Insurance at Barclays. Paul was one of the principal drivers behind the fundamental repositioning of Barclays as a major insurance business in the UK.