Archive for the ‘HR Analytics’ Category

December 13, 2011

Measure Twice, Cut Once – It is all about job-fit

Sage advice to the trades suggests an accurate fit can be achieved by taking the time to measure, and then to take a second measure to verify, before making the cut. Two measures increase the confidence in and accuracy of the cut. Following that guidance helps reduce waste and rework when crafting a fine object. The same holds true building a workforce that achieves superior results. Using a multi-method pre-employment assessment allows you to measure twice or even seven times within one candidate experience, to help determine job-fit.

Measure Twice, Cut Once

I have worked in the trades and the joke about the advice above is – I cut it twice and it is still too short! Well intended and skillful recruiters sometime take a pipeline full of candidates, cut it twice and still make job-fit hiring decisions that miss the mark. Measurement to support job-fit decisions is critical.

Job-fit is complex. I have never sat across the desk from someone who said, “Our jobs are simple, people don’t need to bring much to be successful here.” In fact, even in entry level jobs, the variables that drive success are complex and can be difficult to objectively measure. Jobs with complex demands require rigorous evaluation methods, methods that measure twice and cut once.

Measure Twice

A common practice in the use of assessment is to administer a combination of a personality or work style questionnaire and a reasoning test. This is a simple form of two measures. The unfortunate and common outcome is poor accuracy and the ‘cut’ can be ‘off the mark.’ Candidate job-fit is far more complex than a test score and diverse high-to-low ratings on a number of personality traits.

Multi-method pre-employment assessment integrates an assortment of evaluation types to deliver a whole-person examination of diverse knowledge, skill, traits, characteristics required by the job demands. Multi-method assessment makes it possible to obtain two or more measurements or evaluations of each job relevant performance domain. When attempting to predict candidate behavior across six to eight competencies, a well developed multi-method assessment can evaluate each competency with multiple measures, thus delivering a confident job-fit measure.

Multi-Method Measurement

Here are some common assessment types that can be integrated into a multi-method assessment.

Situational judgment – choosing among options on how one might respond to common interactions with customers or co-workers

Problem solving – accessing and considering information to address questions, resolve issues

Idea generation/brainstorming – recalling or synthesizing options for a given scenario

Work history – identifying job relevant career experiences, achievements, work habits and career management behaviors

Data analysis – computations, trend analysis, comparisons and drawing conclusions from various information sources

Diagnostic reasoning – applying rule-based logic to system analysis

Prioritization – evaluation and ranking of relative importance and potential consequences of work flow demands

Delegation – discerning appropriateness of and approach to assigning work to others

Multi-tasking – splitting attention among competing demands while performance complex tasks

Work style- comparative description of preferred behavior patterns

The elegance afforded by many of these assessment methods is the ease by which the content can be created to reflect or mimic the actual demands of the job. For example, a day-in-the-life of a manager may include working with operating statements to identify issue that need attention, coming up with a variety of ways to handle the action items, selecting action items to delegate to team members and being prepared to handle a variety of team member responses. A multi-method assessment can combine a series of exercises that present that entire sequence; Data analysis, idea generation/brainstorming, delegation, situational judgment.

Whole Person Job-Fit Profile

Whole Person Job-Fit Profile

The complexity and diverse range of job-fit attributes measured with this approach allows candidate results to be presented across a job specific competency model. This is done through the use of HR analytics and a scoring algorithm that weights and values candidate responses according to their relationship with actual on-the-job performance.

In addition to obtaining the evaluation information, the candidates are invited to step into the job and get a glimpse of what it is like to handle the work flow. The assessment can become a form of realistic job preview.

Pre-employment testing has evolved a great deal in the past few years. The web has provided a format for delivering a highly engaging and robust multi-method assessment experience. If you value accurate job-fit, it may be time to explore how a multi-method pre-employment assessment could support your recruiting and hiring process.

Call (888) 485-7633 or write to set up a demonstration.

Measure twice, cut once to reduce staffing waste from your hiring decisions. The result is a workforce that delivers superior results.

November 7, 2011

Blinded By Star Gazing and the A Player Myth

Writing in the recruiting space has generated a lot of attention on strategies for hiring A Players, Top Talent and Star Performers. While that sounds great, I think all that star gazing has blinded a few recruiters. In part, having a poorly calibrated candidate evaluation process in place is to fault.

There is no team roster filled with the likes of Lebron James, Michael Jordan or Barry Bonds, (Although Miami tried). There is no company executive committee completely staffed with the likes of a Warren Buffet. The reason can be largely explained by population statistics. A Players or bright stars only make up a small percent of the available population.

As such, it is more of a myth to make all A Player hires. The size of the candidate population might have to be enlarged exponentially to create a finalist pool of only A Players to choose from. That could be a monumental task. The organization might not have the appetite for the time requirements nor the budget to complete such an undertaking. There is another approach to contributing to organization performance with each hiring decision.

Dim Stars Get Hired Too
Making the right hiring decision requires complex reasoning. To put this into perspective requires that you wrestle with another concept within population statistics known as variation. This can be best understood by looking at your hiring track record. You hired your best, and you hired your worst. When you examine the performance differences between those hired into one job, the variation in decision quality is revealed. Using a process improvement tool called Pareto Analysis (80-20) the impact of low end variation can be revealed.

Obtain a data set of performance variables from a group. Sales performance is easy place to look. Obtain territory revenue per sales rep in a spread sheet. Calculate the average sales per territory. Next calculate the average for the top 80% and the bottom 20%. Look at the gap. After you stop shaking your head, you have to admit, “Yes our process hired those bottom 20% folks too.” You can explore the impact of this with our ROI Calculators. You can perform this same form of HR Analytics on any dimension of performance. It is pretty revealing.

This analysis reflects the current nature of the population from which you draw, and the decision quality variation that allows in your poorest performers. In your Shining Star hiring program, Dim Stars get hired too.

Scale of Magnitude
Hipparchus , the ancient Greek astronomer created a the six point magnitude scale to calibrate the relative brightness of stars. Since then the scale has been expanded, revised and refined to better describe the difference observed in the brightness of heavenly bodies. Hipparchus uses analytical models to refine his conclusions. Your process hired the dim stars because of the calibration of your brightness scale. Shining stars and dim stars looked more alike than different. The evaluation process was unable to see the difference. Using HR Analytics your candidate evaluation can be refined and your hiring decisions improved. Better candidate data can improve the yield of your staffing process. Maybe your recruiter was blinded by star gazing.

With a well calibrated candidate evaluation process, you get better data, which can support more effective hiring decisions.

Here are a series of examples of on-the-job performance differences that were identified by score ranges during validation analysis of a Virtual Job Tryout. Each chart depicts the performance gap between individuals who scored in the top 80% versus those who scored in the bottom 20% of a Virtual Job Tryout created specifically for the job they hold.

Top 80% Achieve 47% Higher Territory Revenue

Individuals who scored in the bottom 20% on the Virtual Job Tryout, on average produced $1.6 million LESS in sales revenue. In other words, about $1.6 million of performance variation was at risk with every hiring decisions. Recruiters letting soft glowing heavenly bodies into the sales organization.

Top 80% Achieve 8% Higher Closing Ratio

Individuals who scored in the bottom 20% on the Virtual Job Tryout, on average closed the deal on 8% FEWER opportunities. In this case, millions of dollars of revenue are at stake with a lower closing ratio. Candidates with less effective skills and attributes for bringing in new business were entering the sales organization.

Top 80% Scores Achieve 70% Higher Level of Products Booked

Individuals who scored in the bottom 20% on the Virtual Job Tryout, on average produced 70% FEWER transaction per month. The previous candidate evaluation process confidently advanced less capable individuals into the sales organization.

Top 80% Scores Achieved 21% Higher Commission Levels

Individuals who scored in the bottom 20% on the Virtual Job Tryout, on average earned$21% LESS in sales commissions. The Virtual Job Tryout is well equipped to discern underlying traits and characteristics that drive performance differences.

When you see the order of magnitude and the insight into performance provided by candidate results, ask yourself; “What would my workforce look like if I could hire from the top 80 %, or even the top 50% of the candidate pool?”

When you calibrate your candidate assessment process to on-the-job performance, you can better distinguish the difference between stars and black holes.

Call us for more information on calibrating your candidate assessment process to reduce low-end performance variation. And, remember, the sun is a star. If you stare at it, you can go blind.

Posted by: Joseph P. Murphy | November 7th, 2011
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, Tags: employee selection HR Analytics Virtual Job Tryout | Posted in General, HR Analytics

September 22, 2011

Validation of a Pre-employment Assessment and Crowdsourcing

Find the truth about predicting on-the job success

This week in the journal Nature Structural & Molecular Biology, it was reported that gamers contributed to a scientific breakthrough. The problem-solving was achieved by a form of crowdsouring with a focused purpose. Earlier this year, I wrote about Jane McGonigal and her view that gamers can make significant contributions to solving significant world problems. This is one more piece of evidence that her theory is on track. Validation of a pre-employment assessment can be viewed as a form of crowdsourcing to solve a complex staffing problem.

Read this quote from an article about the breakthrough.

“Games provide a framework for bringing together the strengths of computers and humans. The results in this week’s paper show that gaming, science and computation can be combined to make advances that were not possible before.”

Gaming, science and computation are at the core of the Virtual Job Tryout. We crowdsource from two groups to solve the question of what it take to be successful in a job.

When you ask ten recruiters or ten incumbents about what it takes to be successful in a job, you get ten opinions. Of course there will be some overlap, but the overlap will contain both true and false assertions. Humans can describe the same experience in many different ways. People perform the same task differently as well. What is needed to solve complex staffing problem is better candidate data.

The Virtual Job Tryout is a bit of a game. It is work-sample and problem solving activity. We crowdsource a large group of existing employees to complete the sample activities in the validation process. When hundreds of people complete the same tasks, we obtain a robust data set on different approaches used to address the same issues. We also crowdsource a comprehensive data set of on-the-job performance by asking the supervisors and managers to document productivity and rate competencies of the existing employees.

Computers are good at collecting information in a standardized format. The web makes it easy to deliver an engaging, multi-media experience that can mimic certain aspects of a job. In addition, how people navigate web experiences allows us to collect far more data than just a specific response. Think about it like solving a math problem. Sometimes the teacher wants to only see the answer, however, sometimes seeing ‘the work’ is more insightful. The web allows us to collect ‘the work’ as well.

Industrial-Organizational psychologists are scientists. One specific skill set of these scientists is developing algorithms to drive insightful outcomes from HR analytics. The development of the correct algorithm is critical. Using algorithms based upon validation from other companies delivers ‘vanilla candidates’ at best. At worst, you hire candidates just like your competitors, thus reducing your differentiation in the talent aspect of your business. Using data from your company, your employees, and your candidates is what makes pre-employment assessment work most effectively.

If you want to use crowdsource data to create a highly effective solution to your complex staffing problem, give us a call.

The discovery may not be as significant as learning more about the HIV virus. However, a better way to define what it takes to be successful in your company can improve the health of your bottom line.

Posted by: Joseph P. Murphy | September 22nd, 2011
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, Tags: HR Analytics pre-employment assessment Virtual Job Tryout | Posted in HR Analytics, I/O Psychology

July 25, 2011

Shaker Consulting Group Hires Dr. E. Daly Vaughn to Support Virtual Job Tryout Design

To meet client growth and expanding market demands, Shaker Consulting Group is proud to announce the hiring of Dr. E. Daly Vaughn as Virtual Job Tryout Design Scientist.

“His experience in HR analytics, pre-employment assessment design coupled with the use of social media in hiring will prove invaluable as we expand our service offering,” said Joseph P. Murphy, vice president of Shaker Consulting Group.

Vaughn, a native of Texas, with a Ph.D. in Industrial/Organizational Psychology, brings a unique mix of capabilities to the firm.

For more information, read the full release: Shaker Consulting Group Hires Dr. E. Daly Vaughn to Support Virtual Job Tryout Design and Enhancement of the Candidate Experience.

Posted by: Joseph P. Murphy | July 25th, 2011
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, Tags: Candidate Experience HR Analytics pre-employment assessment Virtual Job Tryout | Posted in HR Analytics, News

May 10, 2011

Are You Measuring Your Candidate Experience?

I have been writing about the candidate experience. As such, I thought it might be good to go back to the first look we took at how companies evaluate or think about the candidate experience.

We conducted a survey of attendees at the Taleo World 2008 User Conference in Boston, MA. The purpose of the survey was to assess the degree to which organizations are evaluating the candidate experience and measuring the economic impact of staffing process waste or early turnover. Given the expanding focus on the Candidate Experience, it seemed fitting to share the results again.

As a sponsor and exhibitor of the conference, we asked recruiting professionals who visited our booth to complete a five-question survey. Three multiple-choice questions explored candidate experience issues and two questions examined 120-day turnover.

Observations and Assertions

The data suggests that the vast majority of companies (86%) do not ask candidates for feedback about their on-line employ-ment experience. In spite of a lack of candidate feedback, a surprisingly large group, (29%) believe their candidate experience is so positive that it creates referrals and viral marketing. The survey did not explore referral rate issues, so we are left to contemplate why this belief is held.

The survey asked if a multi-media realistic job preview (RJP) was part of their on-line candidate experience. An RJP presents a balanced look at the job, describing both the rewarding and satisfying, as well as the challenging and demanding elements of the job. Ninety-four percent (94%) of respondents said no. This is further evidence of significant room for improving the interactive and informative nature of the candidate experience. Web 2.0 re-cruiting implies a more engaging user experience. Web 2.0 recruiting might include job-specific video, streaming audio, and animated images which engage and educate the candidate.

The 120-day separation rate is one measure of hiring decision effectiveness. A total of 57% of respondents stated that their company tracks and reports this data. This is contrasted with 72% of respondents stating they do not know the cost of on- boarding a new employee into a high-turnover position. Respondents who did offer an on-boarding cost dollar figure, created a range from a difficult to imagine low of $300 to a high-end figure of $29,000 in addition to the often quoted estimate of 1.5 times salary.

As a firm, we are quite interested in the economics of early turnover. We believe that more attention should be given to this staffing process outcome. Reporting turnover as a percentage obscures the economic impact of hiring decisions which result in early separations and further blurs lines of responsibility and ownership of this result. Multiplying the cost of on-boarding times the number of 120-day separations calculates the total dollars lost from this form of staffing waste (Series on Staffing Waste).

Staffing Process Improvement

A core step in any process improvement initiative is the collection of data. The mere act of collecting data begins to change the process, according to W. Edwards Deming. Determining which data to collect, by its nature establishes a sense of significance and a focus. One source of data for staffing process improvement is the candidate’s reaction to your on-line experience. If you want to create a better candidate experience, begin by finding out how candidates view your current experience.

Candidate Experience Factors

Candidates are decision makers too. Your application process should provide candidates with the information they need to make a sound career decision. Questions you might consider asking include:

Did you experience any problems with our on-line process? (Ease of use)
Are you in a better position to decide if this job is right for you? (Educational)
Based upon this experience will you refer others to opportunities here? (Exceptional)
Please provide any comments on your application experience. (Evaluative)

Data can be used to zero in on improvement opportunities, create testimonials within the careers page and support sourcing efforts. Examples of candidate responses may look like this.

Open-Ended Responses

“I think the virtual job tryout is great! I really like that (Company) gives you an example of what you are expected to do before you even step foot into their offices. It is a very good factor in deciding if this is the right job for you!”

“I really enjoyed this way of getting to know the job. It allowed me to see what it will be like to work for your company. Thank you for the opportunity.”

Staffing Economics

Staffing is a business process. As such, the process has inputs or candidates and candidate data. It has value-add procedures such as candidate evaluation, decision-making, and on-boarding. In addition, the output of the staffing process can be measured in terms of separations (voluntary and involuntary), and perform-ance variation of those who remain on the job.

Separations that occur in 120 days or fewer can be labeled as False Starts and can be measured as a form of staffing process waste. For purposes of discussion, one might compare hiring decisions that result in early separations (<120 days) to the manufacturing of defective products. The raw goods are lost and new goods must be put back into the process, causing rework. Staffing waste triggers rework in the form of replacement hires which doubles the cost of talent. Staffing rework is repeating the process elements of sourcing, evaluating, decision making and on-boarding for the False Starts.

Many of our clients have documented the cost of on-boarding. We define this as the investment in time to proficiency. How long and how much does it cost to create a competent performer? The timeline ranges from a few weeks to two years. The methodologies used to arrive at these dollar figures range from an informed esti-mate to the identification and linking of general ledger accounting codes in conjunction with a black belt Six Sigma project. Organizational belief in and acceptance of the figure is an important factor in each of these examples. Calculations and projections based upon these figures become the agreed upon basis for projecting and calculating return on invest from staffing process improvement.

Cost of On-Boarding

Investment to Proficiency

When you know the real costs of on-boarding, it is easy to develop return on investment projections. As an example, reducing 120-day turnover of tellers by 10 people would save $100,000 in on-boarding costs from replacement hires (10 X $10,000 = $100,000). See our interactive Staffing Waste ROI Calculator.

Opportunity

The candidate experience can make a difference in your recruiting process. However, if you don’t ask, there is no data to use for process improvement.

The results of this survey speak more to the great opportunity before us than to the kudos that can be taken for best in class staffing practices. There is room for improvement. Wiser approaches to the business process known as staffing can be adopted.

Start small. Identify one job as the focus for process improvement.
Explore the ability of your applicant tracking system (ATS) to conduct candidate surveys. Decide what information would be valuable and develop a survey process.
Collaborate with the CFO to isolate general ledger codes that can be tied to the cost of on-boarding. Examine the possibilities to create new cost reporting for jobs with high 120-day separation rates.
Partner with your Quality, Process Improvement or Six Sigma teams to examine staffing as a process. Document inputs, value-add methods and outputs or yields. Begin to track, document and report current state and changes over time.

Notes

The results of the survey are a small glimpse into the practices of a recruiting niche: Taleo customers and prospects (Sample size is 35 of about 500+ attendees, or approximately 7%). Given the size of the entire recruiting universe, this data is not presented as a statistically significant look at recruiting practices. However, we do believe the responses are representative of common practices in corporate recruiting today, and the results are similar to other surveys we have conducted with larger sample sizes. (Shaker Consulting Group and The Society for Human Resource Management (SHRM); Quality of Hire, N = 585, 2004; Objective Candidate Evaluation Methods, N = 282, 2005; The Turnover Misnomer, N = 645, 2006). Contact us at info@shakercg.com for copies of these additional survey reports.

Posted by: Joseph P. Murphy | May 10th, 2011
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, Tags: Candidate Experience realistic job preview recruiting staffing process improvement staffing waste | Posted in Candidate Experience, HR Analytics, Surveys

March 28, 2011

Alchemy and Algorithms – Recruiting by Ego or Evidence

Alchemy attempts to take common materials and transform them into something rare and valuable. I don’t think anyone has succeeded in this endeavor to date.

Algorithms Can Be Derived from HR Analytics

Unlike alchemy, algorithms can turn raw goods into gold. The raw goods can be candidate evaluation data and the gold is on-the-job performance. However, many recruiters have not invested in the data collection and analysis required to create an algorithm. As such, they make decisions based upon anecdote and conjecture.

Stock traders want to predict future prices and values of individual companies and broader indices. Recruiters want to predict future behaviors and on-the-job results of candidates. Algorithms are used by the best-in-class of both of these disciplines. And the results they achieve are documented by superior outcomes.

The reason both of these professions use algorithms is to identify meaningful relationships among complex data sets.

Variables that drive company performance and market fluctuations are complex. And, there is likely no doubt in your mind that variables which drive people’s performance are complex, very complex. In fact you might assert people are unpredictable. If that was really the case the workplace would be chaos. And that is just not true. There are some predictable elements.

Algorithms are special equations, expressly for the purpose of teasing out insights and conclusions from complexity.

When used well, the outcome of algorithms increases the probability of making a correct decision more often than not. An algorithm based upon pre-employment testing brings a sophisticated level of HR Analytics that can dramatically improve your quality of hire.

Algorithms were used to determine the premium for your auto insurance, your credit score, the offer you received for a vacation package, and the books recommended for you in on-line shopping. In each case two or more large data sets were analyzed to determine the nature and significance of relationship that exist between and among the variables.

Big Bucks for Equations.

In a current algorithm competition $3 million is being offered for the equation that takes large data sets of health care and lifestyle information and calculates the likelihood of an individual being hospitalized sometime in the future. The underlying assumptions are two-fold. You could be charged a higher insurance premium based upon your probable path to the hospital, or you could be given a specific preventative intervention to reduce or eliminate the necessity of being admitted for medical care.

Why a competition? The analysis and mental energy required to derive the equation is significant. Asking one individual to undertake the work may take a long time. A competition can attract the intellectually curious and competitively driven statisticians. Having a solution sooner than later is valuable.

How much would your organization pay for an algorithm that predicted your customer’s behavior? Or possibly a more accurate question is how much has your organization already paid in an effort to better understand and predict your customer’s behavior. Go ask your chief marketing officer.

Ego or Evidence?

Best-in-class recruiting professionals use algorithms. (We can introduce you to some of them.) Each hiring decision is supported with evidence. But, just like the challenge in the competition, developing algorithms require thoughtful effort. When I describe the process of developing a recruiting algorithm, I get two reactions. One says,”That seems like a lot of work.” The other states. “That seems like it can add significant value to our process.”

Algorithms are derived from analyzing large data sets. Three data sets are required for transforming recruiting raw goods into job performance gold:

Candidate Evaluation data – pre-employment assessment
Behavior/Competency Evaluation data – supervisor ratings
Productivity Evaluation data – objective metrics of on-the-job performance

Recruiting professionals working at the leading edge of candidate evaluation capture 200 to 300 data points from candidate evaluation. The data encompasses work history, work style and work samples.

Similarly, job performance, as defined by 100 to 200 data points from ratings and metrics for each individual provides a robust description of the complexity inherent in any job and the company culture in which it occurs.

When a recruiting professional embarks on capturing this level of data on their staffing process and its outcome as job performance they have the raw goods for the algorithm that predicts the future and answers the essential question – which candidates are more likely to be successful on the job. Working with this type of information delviers a very powerful recruiter experience, adding both efficiency and effectiveness.

Differentiated Workforce

And, that ability to differentiate among candidates is competitive advantage. Michael Porter the strategy guru at Harvard states competitive advantage comes from business processes which are difficult to replicate. In their book The Differentiated Workforce, authors Beatty, Becker and Huselid assert competitive differentiation comes from efforts that align jobs with strategic capabilities. (see page 10).

Using an off-the-shelf assessment, and generalized validity is defined as a ‘Me Too” strategy, one that is easy to replicate. An algorithm which predicts candidate performance in your organization is impossible to replicate. Call us to explore what it might take to transform your candidate experience into competitive advantage and a strategic business driver.

It’s not alchemy, it’s algorithms. And they really do turn raw goods into gold. Employees who perform at gold star levels.

Posted by: Joseph P. Murphy | March 28th, 2011
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, Tags: Candidate Experience HR Analytics pre-employment assessment pre-employment testing Quality of Hire Recruiter Experience | Posted in Candidate Experience, HR Analytics, Recruiter Experience

February 10, 2011

Do You Have A Talent-matician?

Kevin Wheeler wrote a great article on ERE asking about selection science and measurement. His is suggesting staffing professionals adopt better methods for candidate evaluation or assessment and make more effective use of HR analytics to link candidate evaluation data to business outcomes.

Here are a few questions around measurement discipline, the answers to which may be revealing.

Ask your CFO – “How much has been invested in the data capture and analysis system you use to report EBITA?”
Ask your EVP of Sales – “How much has been invested in the data capture and analysis system you use to report daily sales performance?”
Ask your EVP of Manufacturing ; “How much has been invested in the data capture and analysis system you use to calculate process yield?”
Then ask your EVP of HR (self) – “How much has been invested in the data capture and analysis system you use to create a differentiated work force?”

In every case, for Fortune 1000 companies, the answer to the first three will be hundreds of thousands and in some cases millions of dollars. Unfortunately the answer to #4 typically pales by comparison. Why?

I have never sat with an executive who stated their organization was just like their competition. In fact, great pride is expressed in how their people, their products, their services are different than others. The work that true talent-maticians (I just invented that) do is using HR analyitics in quantifying, to the degree possible, the human variables that contribute to those differences. That requires, rigor, discipline, experiment design, and time.

Michael Porter of Harvard suggests competitive advantage comes from business processes which are difficult to copy. Authors Becker, Beatty, Huselid, in The Differentiated Workforce present a similar framework for evaluating HR practices that put forth a ‘Me Too’ or a Differentiated outcome. An example of this is the use of off-the-shelf assessments without local validation. By default the user states, we are willing to use a measurement tool developed for and by someone else and calibrated by another organization to provide data on our talent decisions. Sounds like a Me Too tactic. One path to a differentiated workforce is at least conducting a validation analysis on how the measurement tool (pre-employment test) is adding value to your decision process. The underlying premise is that a good assessment provides a degree of better data and therefore, better decisions. With in-house validation, you document the relationship between assessment results and business outcomes.

Without an in-house validation, the test is not calibrated to performance in your organization and outcomes are anecdotal. The practice that gives assessment a poor reputation is poor implementation.

In an earlier work by the three authors above The Workforce Scorecard, they document those organization hiring a higher percentage of employees with validated evaluation methods achieve higher levels of financial performance. Aon and SHRM conducted a significant piece of research in the mid 1990s that included a glimpse at staffing process outcome (out of print but avaiable from the research dept). Survey participants stated the most lacking qualities in new hires were defined as work style, and basic reasoning. Those traits or attributes can be objectively evaluated with a variety of pre-employment tests. Companies stating they were most satisfied with staffing process outcomes were using the most comprehensive candidate evaluation methods.

Companies hire engineers to solve complex measurement problems.
Companies hire actuaries to solve complex measurement problems.
Companies hire statisticians to solve complex measurement problems.
Companies that know their competitive advantage comes from their people hire industrial organizational psychologist to solve complex measurement problems in staffing. These folks are the talent-maticians.

Even if you do not measure variables that provide insight to performance potential, performance variation exists. In fact you hired your best performer and your worst performer with the same evaluation process. In manufacturing terms that is known as performance variation and is marked by upper and lower limits. You see, staffing is a business process with a yield to measure and manage. To do that requires data capture and analysis.

However, enter another piece of data. It has been known for some time that a structured interview extracts better candidate evaluation data than an unstructured interview. In a survey on Use of Objective Candidate Evaluation Methods I conducted with SHRM (write for a copy), very fascinating evidence of interview practices emerged. Only 55% of respondents stated they use behavioral interviews with questions written in advance (an intentional discovery process). When asked if the interviews were supported with behaviorally anchored rating scales (a method to discern an effective response from an ineffective response), only 24% of respondents stated this practice was used. Staffing practitioners are largely ignoring known practices which at the simplest level produce better outcomes. Implementing assessments requires the same rigor the CFO expects from data capture and analysis in financial matters.

In some jobs, learning more about what factors contribute to retention can add signnficant value. However,most companies do not even measure and track the cost of early turnover. In a survey on Staffing Waste I conducted with SHRM (write for a summary), only 8% of 636 respondents stated they track and report the costs of what I call False Starts – new hire turnover that occurs in less than 120 days. The analogy would be a head of manufacturing that does not measure defects and scrap rates. Manufacturing is held accountable for managing the yield of that process. In my paper Staffing Waste: Identify it, Measure it, Reduce it, a range of examples for applying measuremen- based process improvement to staffing is offered. You can read it here

Yes Kevin, the future of staffing practices will include more measurement, more science, more accountability for understanding and managing process yield. There are exceptional methods to evaluate candidate-job fit. It can be measured, it can be analyzed and it can contribute to the bottom line. However, the practice leaders are already out there, doing the work right now.

For one example kook at the 2010 ERE Award winner KeyBank. They reduced staffing waste in one position by over $1.7 million in one year by bringing science and measurement rigor into their staffing process. They were able to add objective candidate evaluation in a manner that measured candidate-job fit. The retention and gains in a range of job performance metrics are impressive.

We have many more examples of how talent-maticians drive economic impact from staffing process improvement. To explore the scope of opportunity you might have, see our ROI calculators.Call me. We can discuss your opportunity.

Posted by: Joseph P. Murphy | February 10th, 2011
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, Tags: assessment employee selection HR Analytics pre-employment assessment pre-employment testing selection science staffing waste | Posted in General, HR Analytics, I/O Psychology, Surveys

January 30, 2011

Do We Need Internal Recruiting? Ask the CFO.

Kevin Wheeler posted an article on ERE that got the recruiting community fired up. He asked, “Do we need Internal Recruting at all?” His premise seems to rest with effectiveness, accountability and differentiation that a recruiting function may or may not deliver.

With 32 comments as of this post, it ranks near the top of the charts for getting folks riled up.

Here are my two cents, with a few more details than what I posted on ERE.

The dialogue is all good. It may be like the question about cars, is it better to buy or lease? And the answer is: It depends.

Kevin’s main point may really be rooted in economics. When an internal team has the same mandate to measure, track and report economic impact that an external provider does, there is most likely performance parity.

Unfortunately, the issue lies with the fact that many CFOs and CEOs do not hold internal recruiting teams accountable to document contribution and deliver continuous staffing process improvement. And without a mandate for economic accountability, the accounting infrastructure to document contribution is often lacking. A vice president of sales or manufacturing would never be allowed to operate with the poor economic reporting and accounting infrastructure that is deployed for the business process of recruiting. As such, it is common for internal recruiting teams to use ATS based reporting, thus relying on activity based measures instead of economic measures.

Henry David Thoreau gives us words to ponder for this situation: “It is not enough to be busy, so are the ants. The question is, what are we busy about?”

One gauge we use to explore the economic accountability of a recruiting team is how literate they are about job-specific performance metrics and how quickly they can access data sets of performance metrics. Ask a staffing professional, internal or external, if they measure and report on the cost of time to proficiency (total investment from sourcing to self-sufficient performance) for the position with the highest hiring volume. Ask who owns the budget for staffing waste. The answers to those questions reveal a great deal about the accountability expectations set by the CFO and CEO for recruiting.

Reporting on days to fill, requisitions open, requisitions per recruiter, and opinion-based quality of hire while good to know are a bit like busy ant metrics. Recruiters with economic accountability use HR analytics to document and report reductions in staffing waste and rework, increased yield in new hire productivity, reduced time to proficiency, increases in job family average performance metrics and the like.

From my experience, corporate resources flow to those who build a good business case and then document return on investment. Outside providers have to do this to earn repeat business. The best internal providers do so as well. Here is an example of how Key Bank documented high ROI from using pre-employment testing as a form of measurement rigor to reduce staffing waste.

Posted by: Joseph P. Murphy | January 30th, 2011
Permalink, 1 Comment »
, Tags: HR Analytics pre-employment testing Quality of Hire recruiting ROI staffing process improvement | Posted in General, HR Analytics, Recruiter Experience

December 2, 2010

Are You a Passive or Active Recruiter?

So much digital dust has been sprinkled over the candidate side of this question. But, as a recruiter, where do you reside?

Candidates who are not engaged in looking for a career change, and who wait for an e-mail or phone call to consider a job are often called passive. Using that same logic, are recruiters who use post and hope, and wait for candidates to fill up their applicant tracking system passive recruiters? That might be considered an unfair or inappropriately simple definition for passive recruiters.

What criterion transforms a candidate into the active camp?

Applying for one job? Three or more jobs?
One job in the last five years. Five jobs in the last year?
How about those candidates who develop a spray and pray resume distribution machine, ah yes, those are truly active candidates.
How about creating a profile on LinkedIn or other social media? Does investing energy to be visible to digital detectives constitute active?
How about candidates who set up a job agent to alert them of the ideal opportunity? Does that count as active? Or is that really passive, waiting and hoping the ideal job miraculously shows up in their in-box?

I offer a few ideas for consideration on the topic of passive recruiters.

Passive recruiters:
Rely on resumes and social media profiles to screen candidates
Only use the demographic profile and contact information section of their ATS/CRM
Measure sourcing effectiveness by candidate volume/traffic
Begin an interview without written, competency based questions
Use fundamentally the same methods of candidate evaluation for high volume hiring and one-off searches
Worry about requisition load and back-log

On the other hand, active recruiters engage in very different activities when it comes to managing the business process called staffing. Active recruiters understand the staffing process is ripe with metrics that document yield, performance variation, and contribution to the business plan. Active recruiters partner with finance, accounting and database specialists to measure, monitor, and improve the yield or results from their business process. Active recruiters document the return on investment from their use of corporate resources – people and dollars.

Active recruiters:
Perform a Pareto Analysis of their current and future hiring requirements to appropriately allocate resources to the demand
Develop Realistic Job Previews for their highest volume jobs
Implement the weighted-scoring candidate screening questions in their ATS
Use objective candidate evaluation methods such as simulations and assessments to get better candidate data and quantify applicant qualifications
Deployed some form of objective pre-employment assessment for jobs with over 100 incumbents
Conducted in-house validation analysis for all jobs with more than 100 incumbents
Calculated (not estimated) the cost of on-boarding, or investment in time to proficiency for the one to three jobs with the highest volume of hiring in their company
Documented the cost of staffing waste and re-work from 90 day turnover for key positions with early retention challenges
Conducted a new hire performance variation analysis to document trends and outcomes in quality of hire measures
Developed written interview questions for each competency they evaluate
Deployed behaviorally anchored rating scales for evaluating candidate interview responses
Document quality of hire and yield by source from social media

The list goes on.

Each of these items represents a effective practice for staffing process improvement, supported with research. Active recruiters go beyond opinion and anecdote, they want evidence, documentation of impact and favorable trends on their metrics dashboards.

And remember the words of Henry David Thoreau :
“It is not enough to be busy, so are the ants. The question is, what are we busy about?”

If you would like to learn more about optimizing your level of active recruiting, give us a call.

Posted by: Joseph P. Murphy | December 2nd, 2010
Permalink, 1 Comment »
, Tags: assessment Quality of Hire ROI Simulations staffing process improvement | Posted in HR Analytics, Recruiter Experience

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