Make Informed Hiring Decisions
At a recent business conference, a number of people told me that they are struggling to hire qualified candidates who perform at or above expectations and stay with the organization. Research shows many CEOs and other executives believe that their competitive advantage and, in some cases, survival is based on the quality of the employees in their organizations. That means the organization must be great at hiring and retaining top performing employees to
survive and thrive.
One hiring challenge has been “instinctive” hiring, where the interviewer/ hiring manager makes a gut decision based on instinct. This is usually caused by a lack of reliable, objective information about candidates. This gut feel hiring has an average success rate of 25%, meaning that 75% of the time you will end up with an employee who does not meet your expectations in some fashion.
Our traditional information sources such as applications, resumes, and interviews all provide candidate information with questionable validity. How can we make good hiring decisions with poor information?
One popular approach to gathering objective candidate information is using candidate assessments in your hiring process. This has become a $400 million industry and is growing by 8 to 10% annually. Bersin (a Deloitte company) estimates that 90% of top performing organizations use assessments in some fashion.
A Harvard Business Review study found that a candidate’s reasoning ability, personality traits and interests are key indicators of success and retention in a job. Psychometric research supports the HBR findings. This candidate information is not easily gathered through traditional interviews, applications, etc. Assessments give reliable information on these candidate characteristics.
As an example, high reasoning ability means that the candidate can learn quickly and process large amounts of information effectively. This characteristic is critical to success in information intensive jobs. On the other hand, if the job is repetitive an employee with high reasoning ability will get bored and disengage, leading to poor erformance and/or turnover.
Consider a personality characteristic like People Contact. This is the tendency to be outgoing, people oriented, and to participate with others. A high score in people contact is important to performance in a customer service related job but could be detrimental to an engineer or programmer who needs to work independently for long periods of time.
Our “Workforce” assessment measures Conscientiousness, a measure of one’s willingness to work with honesty and integrity, and to follow rules. Are these characteristics important to your entry level hiring? Do you have any other reliable way to evaluate this candidate characteristic?
Gathering objective information on a candidate’s reasoning ability, behavioral traits and interests is only helpful if you know what you are looking for. Studies show that employees who are well matched to their jobs are 2.5 times more productive. This means you should first define a benchmark of characteristics that make an employee successful in the job. Once you have a benchmark, you can compare a candidate’s assessment results to gain insight into job-fit.
There are a few ways to create a benchmark and it is much easier that most people think. The most objective approach is to assess top performing employees in a job in your organization, then use their results to form the benchmark for that job. You will see top performers cluster together in important characteristics for success.
Often, you won’t have the luxury of having enough top performing employees in a job to use as benchmarking models. Fortunately, there are preliminary benchmarks available for most jobs which can be used as a starting point and adjusted as needed for your specific job responsibilities and organizational culture.
Once you have a benchmark of success characteristics, you are ready to assess candidates. First, decide when, in your hiring process, to assess. Some organizations assess early in the process in order to avoid wasting time on candidates who clearly don’t fit. Others choose to wait until later in the process to control the money spent on assessments. Whatever you do, just be consistent with all candidates within a given hiring requisition.
Most modern assessments can be administered via the internet. This can help make sure you aren’t slowing your process down by adding assessment information. Choose an assessment that is scored immediately and provides reports usable by a typical hiring manager.
Compare your candidate’s results to your benchmark. Some assessments do this for you as part of the report and even suggest interview questions. If not, make sure you consider your benchmark as you review the report. Note that the assessment should not dictate a hiring decision, but will provide great information to assist your decision.
Finally, don’t throw this information away once you make the hire. The information from the assessment can be very helpful during your new employee’s on-boarding and beyond to help understand their strengths, weaknesses and motivations leading to longer term retention.
The author: Phil Devendorf has been helping organizations improve hiring and management decisions by implementing assessments for over 20 years. See the assessment offerings at the PDServices web site. Contact Phil at phild@PDServices.com or 740-326-4494 to discuss how assessments can be valuable for your organization.