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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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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.

  1. Ask your CFO – “How much has been invested in the data capture and analysis system you use to report EBITA?”
  2. Ask your EVP of Sales – “How much has been invested in the data capture and analysis system you use to report daily sales performance?”
  3. Ask your EVP of Manufacturing ; “How much has been invested in the data capture and analysis system you use to calculate process yield?”
  4. 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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September 29, 2010

Intuition or Intelligence: How Do You Hire?

Talent Intelligence was a big theme at TaleoWorld 2010.  Taleo CEO Michael Gregoire, in his opening remarks stated 47% of new placements into management positions fail.  I am not sure where that statistic came from, but it does not speak well about how companies are making decisions to hire or promote individuals.  It makes me ask:  Is the hiring decision based upon intuition or intelligence?

Where else in business would a 47% failure rate be tolerated?  What Mr. Gregoire is referring to here is one form of staffing waste.  This abysmal success rate seems to indicate a strong need for talent intelligence.  Better candidate data for making more accurate hiring decisions.

Getting useful, meaningful data is the central challenge.  Hiring managers and recruiters, while well intended, often place disproportionally high value on candidate data that is either not related to job performance or even worse, negatively related to job performance.  And, one of the more common areas where we see this is the value placed on specific job experiences that while intuitively seemed to make sense, the evidence from HR analytics proved othewise.  Here are a few examples. Previous cash handling experience negatively related to cash drawer accuracy, prior food service and hospitality experience negatively related to success in a food and beverage management position, previous sales experience with a competitor negatively related to sales success.

Thoughtful people in successful companies establish these screening criteria.  However, in the majority of cases these criteria are assumptions.  Assumptions that are never tested or proven.  By not conducting the appropriate HR analytics, decisions get made based upon ego, not evidence.  This is allowed because of the common and accepted assertion from recruiters and hiring managers: “I am a good judge of talent.”  With a 47% failure rate, it would seem prudent to do some analysis.  Just better than a coin toss does not seem like good odds for a critical and expensive business decision.

Employee selection is a process.  The yield of the process can be measured and improved. Candidate evaluation with pre-employment assessments can be conducted in a manner that produces evidence in the form of data. This data can support HR analytics which in turn provides guidance to improve the objectivity and effectiveness of the hiring decision.  If you are a Taleo user and want to make your ACE work better, we can help.

Check out a few of our case studies to see how HR analytics and pre-employment testing validation analysis have made a measurable difference in the yield of a business process called staffing.  We can help you make the transition from ego to evidence, from talent intuition to talent intelligence.

Posted by: Joseph P. Murphy | September 29th, 2010
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August 31, 2010

Staffing Waste: Staffing Process Improvement – Part VII of VII

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.

Part I, Part II, Part III, Part IV, Part V, Part VI

Posted by: Joseph P. Murphy | August 31st, 2010
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August 25, 2010

Staffing Waste: Performance Variation in Employee Selection – Part VI of VII

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.

Part I, Part II, Part III, Part IV, Part V, Part VII

Posted by: Joseph P. Murphy | August 25th, 2010
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August 18, 2010

Staffing Waste: Rework – Part V of VII

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

Posted by: Joseph P. Murphy | August 18th, 2010
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August 3, 2010

Staffing Waste: False Starts – Part IV of 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 turnover 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.

Part I, Part II, Part III,  Part V, Part VI, Part VII

Posted by: Joseph P. Murphy | August 3rd, 2010
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July 27, 2010

You Can’t Handle the Truth: Quality of Not Hired

John Sullivan in his recent post on ERE continues to ask great questions and invite thoughtful consideration of the employee selection process.  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 adds administrative burden where technology should come into play.  Building a scorable application or standardized employee selection evaluation:

  1. Outsources data entry to the candidate,
  2. Collects uniform data from all candidates
  3. Treats all candidates equally
  4. Allows for validation analysis of candidate data and job performance

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, 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-the-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.

Posted by: Joseph P. Murphy | July 27th, 2010
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July 21, 2010

Staffing Waste: No Data Captured – Part III of VII

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.

For more information on our hiring assessment tools, contact us today.

Part I, Part II,  Part IV, Part V, Part VI, Part VII

Posted by: Joseph P. Murphy | July 21st, 2010
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July 15, 2010

Staffing Waste: HR Analtical Tools – Part II of 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.

Part I,  Part III, Part IV, Part V, Part VI, Part VII

Posted by: Joseph P. Murphy | July 15th, 2010
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