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Intuition or Intelligence: How Do You Hire?

by Joseph Murphy

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.