For many of us, gambling is a bit of fun and nothing more than a swift date with Lady Luck. However, if you have visited Las Vegas, it is clear that the gambling industry relies upon more than simple good fortune in order to pay its bills.

So how do casinos inevitably make money? In every form of gambling, the probability of the house winning is greater than the probability of the gambler winning. Therefore, so long as there is a steady stream of customers willing to place bets, the house knows that in the long run, it will win. The process is stacked in the casino's favor and despite a gambler's occasional streak of 'luck', the house will prevail.

This particularly applies to roulette where the presence of the 0 alters the odds; and in the United States, the roulette wheels have a 0 and a 00, further increasing the casino's profitability. Consider a player who, using an American wheel, bets on a single number. The payout for winning is 35 times the bet but the probability of winning is 1 in 38 with a 37 in 38 chance of losing.

Unfortunately, many employers have a greater chance of winning at roulette than making a good hire. In view of the considerable costs of recruiting and training a person, as well as the opportunity cost of poor performance, this is a very worrying statistic.

The analogy goes further than relative probabilities. Indeed, a properly implemented volume selection process has much in common with casinos. The statistical effectiveness of a selection method combined with consistent implementation allows one to predict an aggregate outcome. Just as a casino operator can accurately predict its take from a given level of customer throughput, so to can a recruiter use a good process and statistical technique to forecast new employee performance.

The recruiter can be confident that while some mistakes will still be made, overall, the selection decision will consistently reveal better performers. If the cost of operating the process is lower than the additional performance generated by these higher quality employees, the organization (the house) will generate a net annual increase in profits.

A casino would be a very poor investment if it relied on luck for its commercial success and Vegas would still be a tiny settlement in the middle of the desert.

Below is an example of the ROI from a consistent improvement to a selection process. It demonstrates that for a medium-sized employer, an outlay of $600,000 will enable the organization to recruit people who, on average, perform better in their roles. The net improved financial contribution is $3m for each year these individuals remain with the company.

As we marvel at the splendors that a small percentage house advantage has brought to Vegas, one should consider whether this same effect could be employed at your organization.