Good Data Missing When It Comes to Prediciting Hiring Succes

The truth be told, many companies that create sophisticated and rigorous employee screening and selection processes are based on gut, not facts, and the result is often a lot of theoretical and academic bull____. Bottom line: most managers have no clue what it really takes for an employee to be successful on the job and within a company.

Considering that payroll and associated employee costs make up the highest expense in almost all companies, it behooves every employer to track and analyze the data.

According to a recent article in Human Resources Executive Online, improved data analytics by human resources in the area of recruiting could have a tremendous impact on the bottom line.

United States employers collectively spend about $124 billion a year on recruiting, according to Bersin & Associates, and almost $6 trillion on payroll, according to the U.S. Bureau of Labor Statistics. With that level of spending, small improvements in outcomes can easily be worth billions or tens of billions of dollars.

The processes used by companies to screen and select employees are highly questionable. Research shows again and again the fallibility of the interview and yet many organizations still rely in it as the sole screening method.

Research has consistently shown, however, that most interviewers aren’t skilled enough to really assess a candidate’s capabilities. One study found that interviews are substantially less predictive of candidate quality than simply looking at their resume or checking their references. Another study found that the even untrained observers can predict the outcome of most job interviews after watching the first 15 seconds.

The HRE article highlights several additional screening techniques that defy logic when you attempt to quantify results:

Job hoppers and the unemployed: Researchers at Evolv looked at the data and found no predictive value in looking at how many jobs a person recently held. “Candidates with five jobs in five years were no more of an attrition risk than candidates with only one. Candidates who had been unemployed were no more or less likely to quit or be terminated. Screening out job hoppers and the unemployed serves no purpose.”

Criminal background checks: 92 percent of SHRM member companies use criminal background checks as part of their standard hiring process. Despite the widespread usage,

Numerous studies have found that criminal convictions, especially old ones, aren’t predictive of any future bad behavior. One study, titled Predicting the Counterproductive Employee in a Child-to-Adult

Prospective Study, found that crimes committed before a person entered the workforce had no predictive value for any “counterproductive workplace behaviors.” Another study found that people with records who stay arrest-free for four to five years are only as likely as the average person to be arrested again. A third study found that, for people arrested when they’re 18, their risk of re-arrest drops to that of the normal population by around age 25.

Here’s another example. What about requirements to have a high school diploma vs. a 2- or 4-year college degree? How are these requirements determined? I have yet to find a single client who can validate that a 4 year degree is better than a 2 year degree compared to 10 years of experience is more predictive of success on the job. And yet, nearly every job description includes some minimum education or experience requirement. Who sets these limits? Often times, it is set at a notch below the minimum level of the manager. Others just claim rest their hiring decisions on the false sense of security that a 4 year degree is better than a 2 year degree….or none at all.

The quality of the workforce is becoming increasingly important as a differentiator and competitive advantage. The right approach to measuring quality of hire and using good data to guide decisions has a tremendous impact on hiring outcomes. A key objective of all human resource professionals must be to deliver to their employers the best workforce for the money. This is one of the key areas where HR can deliver true strategic value. Yet, for most recruiting organizations, “quality of hire” isn’t measured or tracked against a target.

This article originally appeared in The Total View, a weekly online newsletter that focuses on hiring, management and retention strategies. The Total View is written and published by Ira S. Wolfe, president of Success Performance Solutions and is distributed with permission by The Chrysalis Corporation. Subscribe for FREE to The Total View by typing your e-mail address in the newsletter sign-up box on the right side of this page.

How Safe Are Personality Tests?

Many people still believe personality tests are illegal and that their use exposes an How Safe Are Personality Tests?employer to more risk. But a new research paper titled Legal Risk in Selection: An analysis of processes and tools presented at the Society for Industrial Organizational Psychology conference dispels many of the lingering myths associated with using personality and other employee tests.

The research findings reviewed EEOC and OFCCP cases settled both in and out of court between 1998 and 2010. Two key areas were covered: (1) type of selection test and (2) the hiring process.

Based on the findings, personality and other psychometric tests do carry some risk. But in nearly every case, the challenge did not involve the validity or reliability of the test but how the assessment was used. For example, according to Dr. Charles Handler, one of the most respected authorities on employee selection, “Cases that went to trial around selection devices were decided for the plaintiff only 28% of the time, vs. 68% for those related to the selection process, meaning that process issues are more likely to land an employer in hot water.”

Cases related to inconsistent process accounted for the largest percentage of all process related cases and over half of these were settled prior to court. A whopping 91% of all inconsistent process cases were found to be discriminatory.

Some examples of process related cases that were lost include:

  • In Dennis v Columbia Colleton Medical Center (2002), the U.S. Court of Appeals described the hospital’s selection process as “a peculiarly informal process” because their explanations for not hiring the plaintiff were different from the written job description, giving the decision “a flavor of post-hoc rationalizations.”
  • In Dunlap v Tennessee Valley Authority (2008), the court determined the company’s hiring process was discriminatory because they found 70 counts of manipulating test scores and changing interview and test scores in candidate rankings.
  • In Allen v Tobacco Superstore (2007), the company relied on word of mouth to publicize open positions and had no consistent procedures for advancement; employees simply asked a supervisor to be considered. The court found the word-of-mouth hiring and promotion process – which resulted in a company-wide dearth of Black store managers despite operating in communities with large Black populations – was discriminatory.

Here’s a checklist of things HR and hiring managers must do to lower the risk of discrimination and improve the success of their hiring process.

1. Use a structured interview. According to Dr. Handler, “if you are not using a structured interview process, you have a problem.” I couldn’t agree more. The casual, off-the-cuff interview is not only poor risk management but not very predictable when selecting employees.

2. Be consistent. Interview questions must be consistent with job relatedness. Even if the interview questions are structured and managers trained in behavioral interviewing, it doesn’t mean the questions are job related (Dennis v Columbia Colleton Medical Center (2002). The same goes for the job board ad or word of mouth referral programs you use. If you write an ad or ask a question related to a responsibility or skill that is not required for the job, you open the door wider for adverse impact claims to step in.

3. Remain objective. Pre-employment testing  IS legal. It’s also a best practice with positive results reported time and time again. Testing is not an astrology or voodoo-like experience but a scientifically proven practice that leads to better hiring results without increasing the risk of adverse discrimination.

Using pre-employment tests for the right reasons (job-relatedness) is the equivalent of having a skilled, unbiased, third party manager interview candidates. Many pre-employment assessments also include job-related interview questions, based on candidate results. These questions structure the interview and keep the focus on job-relatedness.

This article originally appeared in The Total View, a weekly online newsletter that focuses on hiring, management and retention strategies. The Total View is written and published by Ira S. Wolfe, president of Success Performance Solutions and is distributed with permission by The Chrysalis Corporation. Subscribe for FREE to The Total View by typing your e-mail address in the newsletter sign-up box on the right side of this page.

 

Managers Don’t Trust Pre-Employment Tests: Why?

Would you hire a candidate if he agreed with the following statements during the interview?

  • I am usually satisfied with work that is “good enough.”
  • It is not necessary to do more than enough work to get by.
  • My anger frightens other people.
  • Sometime you have to lie a little to protect yourself.

Would it surprise you to find out that many managers do say yes. If so, you wouldn’t be alone. Thousands of managers make that decision every day; ignoring the results of pre-employment tests and allowing their egos and gut instinct to rationalize very clear signs of employee behavior danger.

Pre-employment tests enjoy a love-hate relationship with managers. Some managers live and die by the results of a pre-employment assessment test in screening out candidates. Others despise the notion that a simple questionnaire might second guess a hiring manager’s gut feeling about how well a candidate might fit into a job. The fact is that both approaches are flawed.

Hiring ManagerFirst of all, both parties must consider moderation when using pre-employment tests. The die-hard advocates must put the results of these tests in context. No test should be used as the sole determinant in screening out or selecting a candidate. The best formula for hiring is one-third interview and experience, one -third reference and background checks, and one-third pre employment assessment tests.

Alternatively, ignoring employment tests as part of the employee selection process ignores a powerful ally in the search for the right fit candidate. A validated assessment offers an objective third party view of a candidate, often exposing character flaws as well as unidentified potential.

Then we have situations where the assessment results paint a clear picture of a risky hire and the manager’s opinion is called into question.

For instance, I received a phone call just the other day from a manager questioning the results of candidate’s honesty and integrity report. A candidate revealed during the interview that he had been picked up twice during the last year for driving without a valid license. The candidate explained this away by saying he had a mortgage to pay and a family to support. “I couldn’t afford to lose my job,” he said.

The employer interpreted that commitment to his family as a positive value. He questioned why the pre employment test would raise red flags about this individual’s character when he was such a good father and husband. He rationalized away that driving despite a suspended license was still illegal no matter what the reason. He ignored how this candidate might respond again if he lacked the money to pay his mortgage, to put food on his family’s table, or to purchase medications for his children. Would he resort to “borrowing” money from his employer without the employer knowing it? That’s exactly what many employees caught embezzling fund say when caught – “I wasn’t stealing because I meant to pay it back.” What lies would he be willing to tell to protect his family?

If you think I’m exaggerating, consider what lengths one employee working for a Wisconsin business went to “keep her husband happy.” (Hint: she had systematically stolen more than $600,000 from the business over five years.)

While not absolute, the pre-employment test prompts red flags in areas of conscientiousness, hostility, and honesty. The responses on a validated assessment clearly indicate how a potential candidate like the one described above might react if given a choice between family and the law. And yet employers choose to doubt what they read in the candidate’s report despite numerous confirming statements about questionable integrity.

Pre-employment tests can offer valuable insight into a candidate’s integrity, work attitude, and job fit. They are effective and reliable indicators of job fit and future performance. Ignorance is not bliss when hiring employees and pre employment assessment tests can help managers hire smarter.

Learn more about how to hire employees with a positive attitude.

This article originally appeared in The Total View, a weekly online newsletter that focuses on hiring, management and retention strategies. The Total View is written and published by Ira S. Wolfe, president of Success Performance Solutions and is distributed with permission by The Chrysalis Corporation. Subscribe for FREE to The Total View by typing your e-mail address in the newsletter sign-up box on the right side of this page.