Shaker Consulting Group is once again attending Taleo World 2010, the premier global talent conference, on Sept. 13-15, 2010 at the Chicago Hilton.
We’ll be located at booth #23, where you learn how the Virtual Job Tryout combines realistic job preview (RJP) and pre-employment testing in a company branded message.
For more information or to schedule an appointment, read the full release: Shaker to Sponsor Taleo World 2010 Conference in Chicago.
Karen Bloom, principal and CEO of Bloom, Gross & Associates has devoted her career to creating exceptional candidate experiences. In addition, Karen is a role model for mentoring recruiters and contributing to the profession through her on-going work with the Chicago Staffing Management Association. I caught up with Karen in Orlando at the SHRM Staffing Management conference and asked her what can be done to improve the candidate experience. When it comes to employee selection, Karen says: communicate clearly and often, establish expectations and disclose the nature of your hiring decision. Click PLAY to hear what she has to say.
In an earlier video, Gerry Crispin also spoke about the importance of setting expectations in the employee selection process. Companies in general and recruiters in particular have increased reliance on digital messages, web pages, boiler-plate e-mail for status disposition messages from the ATS, or no message to the candidate at all.
Candidates want to know what to expect. If you are not going to communicate with them, tell them. If you are going to only contact the top 10 candidates, tell them the date you will do so. Give the candidate some sense of the “what” and “when” in your candidate evaluation process. Process information and expectations will help them know when to stop thinking you might be interested in them.
Karen talks about communication touch points. If you have a multi- step process that will stretch out over several weeks, share that information. You can use simple clear messages. And the message might be different for batch hires, continuously open requisitions and individual hires.
A sample message for batch hiring might read like this:
We will be hiring 20 individuals to start a class in December.
Applications will be screened for minimum qualifications in September and October
Candidates meeting minimum qualifications will be invited to complete a pre-employment assessment in late September and early October.
Telephone interviews will be conducted in during the same time frame.
Final interviews will be conducted and job offers to the most qualified candidates will be made by November 1st.
Candidates have a life too. Make it easy for them to know where they stand. Even if the message is shared indirectly, (did not get invitation to the pre-employment test, did not get a call for the telephone interview, did not hear anything by November 1st). Applicants appreciate participating in a well informed candidate experience.
If you’ve read all this and you’re left wondering how on earth you’ll ever find the time to reduce false starts, rework and the negative impact of performance variation, you’re not alone. In fact, these very challenges are what led us at Shaker Consulting Group to find an innovative solution that improves the staffing process with an evidence-based, data-driven approach that directly connects candidate evaluation metrics to job performance.
Staffing Waste, Rework and Performance Variation
We launched the Virtual Job Tryout®, as a game-changing, interactive pre-employment test for HR professionals and recruiters looking to increase the predictability of hiring more top performers and fewer bottom performers. What makes Virtual Job Tryout a one-of-a-kind employee selection tool is that it combines a highly-customizable employment brand message, a realistic job preview and simulated work samples into one seamless “test drive” experience.
In addition, Virtual Job Tryout maximizes efficiencies of your staffing process by outsourcing data entry to candidates. As candidates complete Virtual Job Tryout their responses are captured, scored and presented to you in easy-to-understand reports. You can continuously monitor and use the data to make better, more reliable staffing decisions.
In Help Wanted & Help Found, a recent book on recruiting, one of our clients made the following statement about using the Virtual Job Tryout. “We aren’t only hiring better candidates, but we are getting more and better information about all candidates,” said Gretchen Frampton, Starbucks’ program manager for assessments. Starbucks also says it has seen a significant improvement in business results by using Virtual Job Tryout to identify, and stop hiring, candidates that perform in the bottom 20%.
So, give us a call. Get control of staffing waste, drive profit up and costs down through staffing process improvement with our Virtual Job Tryout, a better pre-employment test.
No matter how similar candidates for a given job may appear on the surface, people are different. They are complex. They may behave in unpredictable ways once they’re hired. And that’s where the staffing waste problem known as performance variation comes in. You hired your best performer, and you hired your worst performer from the same hiring process. The range of productivity between these two extremes is a form of performance variation. See the ROI Calculators on our web page for an example of how performance variation can be documented.
If all employees perform at a very high level within a given role, then there is little opportunity for real strategic impact. But if differences persist, like they do in the majority of employee selection cases, it’s time to start developing methods which are better predictors of performance outcomes and close the performance gap. To use a manufacturing analogy, your goal is to reduce the number of faulty widgets coming off the assembly line. By implementing scientific employee selection methods you can more accurately hire people who perform like your top 80%, thereby reducing performance variation.
An essential tool for developing an employee selection process aimed at reducing performance variation is pre-employment testing. The chart below demonstrates the degree of performance variation within a group of employees. When you look at job performance and results from the Virtual Job Tryout, it is easy to see how hiring from those who score in the top 80% can make a significant contribution to the organization. This appraoch is quite conservative. Beginning your interviews with candidates who score in the top 50% can be transformative.
Contemporary pre-employment testing use multiple methods of candidate evaluation which provide a rich data set for analytical purposes, namely, validation analysis. A validation analysis is the method used to document which pre-employment data from candidate screening and evaluation actually adds value to how well the hiring decision predicts success on the job. For example, the outcome of a validation analysis can demonstrate the strength of relationships among variables such as work history and attendance, work style and time-to-proficiency, work samples and productivity, etc.
The result of approaching your staffing process with HR analytical tools is the ability to reduce performance variation. This means fewer hires that perform below average and a steady increase in your overall levels of productivity. By using this more calculated, data-centric approach, you can connect pre-employment assessment data to objective, on-the-job performance metrics. This places the full weight of statistical evidence over “gut feelings” on how well your employee selection process predicts better business outcomes.
I had chance to ask Russell Kronenburg from Australia’s Jemena what can be done to improve the candidate experience. He played the BRAND card. He suggests the brand message, recruiter behaviors and web touch-points all line up to deliver a unified employment brand message. Click PLAY to hear what he has to say.
It is not enough to have a company brand or product brand. Employment Brand, as a concept, has been expanding and maturing. Organizations are investing more to develop a ‘what’s it like to work here’ persona. Getting the story right entails aligning the employment message with the company culture. Candidates have lots of resources to verify claims of what it is like to work at any given organization.
The proliferation of web hosted video has allowed rapid and low-cost deployment of multi-media peeks inside a company. While some of these videos do a great job, some are more hype than help. Truth in employment brand prevents a bait and switch reaction when new hires find the practiced culture very different than the culture espoused in the video or careers page stories.
Your candidate’s web experience can be designed to extend your brand message. Job seekers are also applying at your competitors and they can instantly see and feel the difference in a company’s brand with each click of the mouse. The power of this difference was recently driven home from feedback a candidate gave after completing a highly branded, interactive day-in-the-life pre-employment simulation.
“You guys need to talk with ABC Co (the biggest local competitor), their application process is terrible. This was really cool!”
This one comment shows the savvy candidate is making early observations about how the employee selection process conveys an employment brand experience. It impacts their career choices.
When your brand message goes all the way into your pre-employment testing, your candidates let you know, in a very favorable manner. Read some candidate reactions to their experience with the Virtual Job Tryout here.
Every time your company experiences a false start, rework is required to recruit and train the replacement hire. Put another way, rework doubles the cost of on-boarding for each false start.
Rework doubles time, dollars and effort to achieve proficiency
The False Start Waste and Rework ROI Calculator allows you to play with your own data or experiment with a hypothetical example of how this doubling-effect would look at a company with 100 false starts annually. Feel free to input your own data, too. The numbers may surprise you.
As you can see, rework is a hard cost that’s interrelated with false starts. So the recommendations discussed in the previous article, Staffing Waste: False Starts, would also be applicable for developing ways to reduce waste due to staffing rework.
In a recent client project for staffing process improvement in call centers and retail financial services, the use the Virtual Job Tryout for pre-employment testing reduced rework from 90 day new hire turnover by over 50%. In one position alone, the documented first year savings from higher retention exceeded $1.7 M. This high ROI project used HR analytics to identify candidate evaluation data with a correlation to career stability and job-fit.
Reducing staffing waste and rework can have a dramatic impact on the bottom line.
Part I, Part II, Part III, Part IV, Part VI, Part VII
New hires that terminate prior to achieving minimum performance standards are called false starts in the pre-employment testing industry. Typically, these are people who separate from your organization for one reason or another within 90 to 120 days. And if you’re anything like 78% of HR departments we’ve surveyed (see Fig. 1) your common practice is to report turnover as a percentage.
Fig. 1 Turnover reported as a percentage obscures accountability and hides cost
The problem with reporting turnover as a percentage is that no one owns the waste. A percentage obscures the financial implications and when reported at the company level, it obscures accountability. This means no one owns the responsibility for properly managing and reducing false starts. Not you, not your department, not the managers of the department experiencing the highest rate of turnover.
For example, if you reported that during the last year your organization experienced 9% turnover, you might assume that things are in line with industry norms. But if you take a closer look at those false starts, perhaps you would discover that of the reported 9% company-wide turnover, 70% came from one department in the form of false starts, separated in less than 60 days on the job. Each individual false start will mostly likely require a replacement. Plus, the loss in productivity, team and hiring manager frustration, and investment in recruiting and training for each replacement will cost the company thousands of dollars. Now that paints a very different picture than “9% turnover.” (See False Start Waste and Rework ROI Calculator)
If tunover is not measured, does it happen? 80% of companies do not measure 120 day turnover. (see Fig. 2) Where else in your company would a business process with high waste costs not be measured, managed and receive the focus of reduction efforts?
Fig.2 Companies not measuring false starts and staffing waste
Following are some action steps to help you reduce staffing waste from false starts, and to help you shift your paradigm from, “Turnover is a percentage that no one owns,” to, “False starts are a form of staffing waste that I’m accountable for reducing.”
First, you can identify the jobs with the highest level of false starts. Using the head count or turnover report in your human resource information system (HRIS), you can do a quick query of individuals with a tenure less than 120 days.
Next, start documenting the cost of on-boarding. If your company embraces Six Sigma, team up with a green belt or black belt on a project to address this. Form a cross-functional team with the hiring managers and the training department to understand the true financial implications—dollars invested—of on-boarding for the first 120 days. Once these figures are known, you could begin working directly with the CFO to identify the budget codes related to various on-boarding activities. Then you’ll be able to create reports that track and report the cost of on-boarding and document the waste from false starts.
By approaching the cost of on-boarding with greater analytical literacy and accountability as described here, you’ll be able to continuously monitor and report staffing waste to the executives within your organization. With someone now owning the responsibility for reducing staffing waste from false starts, ROI can be calculated and improvements to the bottom line can be realized. And you may want to take credit for that.
John Sullivan in his recent post on ERE continues to ask great questions and invite thoughtful consideration. Thinking and acting are very different, just as rating and evaluating are different.
Having hiring managers rate quality of applicant would be an interesting exercise. If nothing else, the biases at play and anecdotal elements of work history that are valued might surface.
The single most meaningful measure of quality of hire in the staffing process is on-the-job performance. My current blog series on Staffing Waste shares results from a survey I conducted with SHRM. 66% of companies reported they have no candidate evaluation in a data base. It is an indicator of a fundamental lack of discipline, skill, or as W. Edwards Deming might say: “a process out of control.” Given the market saturation of Applicant Tracking Systems (ATS), it should not be from a lack of infrastructure.
This lack of data prevents analysis, and therefore creates an obstacle to learning from experience. The cycle continues and very little evidence based process improvement is achieved.
When recruiting for small populations and one-off hires, rating candidate might be easy, but will lack meaningful insights. However, the candidate volume in large scale hiring makes this impractical and ads administrative burden where technology should come into play. Building a scorable application or standardized candidate evaluation:
After local validation the candidate’s score is the rating of quality of not hired. Even in organizations with well developed and locally validated employee selection systems, hiring managers and recruiters advance and hire candidates with low scores. We see it with our systems and I am certain we are not unique. Empirical evidence regarding job-fit is ignored, or off-set with contrasting data. In the end, on-th-job performance is the measure of success.
What will recruiters and hiring managers do with a more subjective data set of candidate ratings? Well, working with any data set would be better than none. My survey shows only about 15% of companies do any analysis.
John is calling for greater analytical literacy. It is a great call. There are a wide range of resources for staffing practitioners who want to add more metrics of meaning. The quality of not hired however may not be the best place to start. You have to be ready to handle the truth.
Not long ago, we at Shaker Consulting Group, along with the Society for Human Resources Management (SHRM), conducted a Quality of Hire Survey (see chart below) that asked 558 HR professionals if they have candidate evaluation information in a database. Sixty-six percent of respondents said they did not. That’s right, 66% with no candidate evaluation data (hence my call for analytical literacy in the previous section). But in addition to not collecting any data, another problem persists for many HR folks: collecting data that is insufficient or of little value.
Companies are not collecting or using candidate evaluation data
Without collecting adequate, quantifiable candidate data from your employee selection and evaluation processes, it will be virtually impossible for you to identify with any level of certainty the causes of staffing waste or to develop methods that reduce it. In other words, No Data = No Analysis = No Learning.
The good news is that better candidate data can be obtained and stored in a manner that lends itself to analysis with just a few tweaks to your staffing process. You can better leverage your existing Applicant Tracking System (ATS) by building scorable, objective candidate questionnaires. These structured approaches offered by most ATSs are efficient mechanisms for collecting job-relevant work experiences (biodata). Interview ratings can often be entered into the candidate record as well.
If you’re looking for an expert to advise and direct your efforts in this area, one suggestion is to meet with an Industrial-Organizational (I/O) Psychologist. Experts in the measurement of factors related to people at work, I/O Psychologists can help you explore a variety of methodologies for collecting candidate data. In essence, they’re scientists who can help you address issues in human resources with, well, more scientific resources.
Part I, Part II, Part IV, Part V, Part VI, Part VII
The renowned mathematical physicist and engineer William Thomson, also known as Lord Kelvin, once stated, “If you can not measure it, you can not improve it.”
In other words, numbers matter.
Numbers enable us to scrutinize, analyze and draw conclusions about a particular problem. Numbers provide us with a way to develop solutions based on quantifiable evidence. Numbers are the path by which we can achieve analytical literacy.
As your organization looks to achieve strategic success and sustain a competitive advantage, it is imperative that HR professionals bring a new level of analytical literacy to the job.
Conventional metrics such as cost per hire, recruiting cycle time, cost per trainee and turnover percentages are insufficient at best for communicating the strategic value and contribution of recruiting departments and the positions they fill. Moreover, these numbers are rarely, if ever, related to workforce performance, a factor that contributes to overall organizational success.
If you’re thinking, “Wait a second, I’m an HR manager, not a statistician,” don’t abandon hope just yet. Analytical literacy can begin with asking two simple, pertinent questions—specifically, “What matters?” and, “How can I measure it?”
HR Analytics Challenge - Job-Fit Measures
Even in today’s technology-driven world, which makes collecting data cheaper and easier than ever, many well-intentioned, seasoned professionals still make assumptions about what matters in their employee selection process. They still go with their gut. They still utilize opinion versus evidence.
For example, one of our clients in beverage and food retailing had been placing importance on years of experience in hospitality and food service. Analysis of the evidence showed that this screening criteria actually had a negative or inverse relationship with achieving high performance. Another client had been placing value on previous experience in retail banking. The use of HR analytical tools showed this criterion had no relationship to on-the-job performance. You see, while the cost per hire is likely a number you know, the relationship between the candidate’s pre-employment assessment responses and actual job performance may not be as clear. Even with these two small examples, you can easily see the need to approach things differently.
By employing analytical literacy throughout your staffing processes, then both the costs and benefits of your decisions will become clearer. Plus, by providing senior leaders at your organization with talent solutions based upon metrics and analytics, you’ll be able to help them view the staffing process less as an operational expense, but more as a strategic investment. And you’ll be able to increase your internal equity by transforming yourself from that of a traditional HR manager to a valued strategy manager.
With improved analytical literacy, you would think about the return on investment (ROI) of candidate evaluation as it relates to successful execution of the workforce’s strategy. You would collect candidates’ responses in the pre-employment assessment process as data that could later be analyzed for possible correlations to front-line goals such as increased sales, higher levels of productivity or better retention.
By improving the use of HR analytical tools and analytical literacy throughout your staffing processes, then both the costs and benefits of your decisions will become clearer. Plus, by providing senior leaders at your organization with talent solutions based upon metrics and analytics, you’ll be able to help them view the staffing process less as an operational expense, but more as a strategic investment. And you’ll be able to increase your internal equity by transforming yourself from that of a traditional HR manager to a valued strategy manager.
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