9 of the Best Workforce Predictions for 2012

Workforce Predictions for 20121. Skills Gap -We not only face a quantitative shortage of skilled workers but an imbalance between needed and available skills is making hiring difficult. A study by SHRM and others in late 2010 showed that only 32 percent of U.S. college graduates have “excellent” skills as they enter the working world and only 16 percent of high-school graduates have such skills. Young people are less prepared than ever, forcing employers to adopt new online recruiting strategies, new employee screening processes, new hire training including basic reading and math literacy, improved apprenticeships and mentoring programs, and other on-the-job training and development programs to build skills.

2. Résumé Overload (the Resu-mess) – The number of job seekers applying for jobs is greater than ever. Bersin’s Talent Acquisition Factbook® shows that recruiters seeking hourly workers receive an average of 144 résumés per position, and recruiters seeking white-collar workers collect more than 90 résumés per position. It is harder than ever to sort out the best candidates – hence an explosion of interest in assessment tools and prehire simulations. (According to Bersin & Associates, the assessment industry is on fire, growing rapidly as companies realize that they can better screen and preassess people using games, tests and simulations online. If you are not using online pre employment assessments online pre employment assessments and online applicant processing now, you should in 2012.)

3. Employee Retention. Retention issues will increase dramatically. Almost every survey shows that more than a majority of employees are willing to quit their current job as soon as a better opportunity comes along. Dr. John Sullivan predicts that turnover rates in high-demand occupations will increase by 25% during the next year and because most corporate retention programs have been so severely degraded, retention could turn out to be the highest-economic-impact area in all of talent management. Another startling set of statistics was just released by Mercer. In late 2011, its global research (more than 10,000 employees responding) found that 32 percent of employees are “planning on leaving” their employers, versus only 19 percent two years ago. Low engagement and employee performance is now the second most common business challenge cited in Bersin’s TalentWatch® research.

4. Social Media. For the last few years, most firms jumped on the social media bandwagon, but unfortunately the trial-and-error approach used by most has produced only mediocre results. In 2012 social media will increase its impact by becoming more data-driven.Talent leaders will increasingly see the value of a combination of internal and external social media approaches for managing and developing talent. Thanks to tools such as Twitter, Facebook, Glassdoor and many others, your employment brand is now “out there” whether you like it or not and whether you put it out there or not. To attract the best candidates from the large pool of workers you need to create a magnet – a clear articulation of your company’s strategy, a clear definition of the types of people you are hiring and lots of good will coming from employees in the marketplace.

5. Telework. Telecommuting and virtual work changes everything in talent management. The continued growth of technology, social media, and easy communications now makes it possible for most knowledge work and team activities to occur remotely. Allowing top talent to work “wherever they want to work” improves retention and makes recruiting dramatically easier. as aging baby boomers stay in the workforce longer than planned, but demand more flexibility in where, when and how they work. Telework and telecommuting also continues to destroy the concept of permanent, full-time employment. (Keep reading!)

6. Contingency/Part-time Workforce. It is easier than ever to pick up your newly found skills and take them elsewhere. Upward of 40 percent of the U.S. workforce now works parttime or on a contract basis. Data from the last quarter of 2010 showed that contingent workers accounted for nearly 68 percent of new private sector jobs. Young people (particularly the under-30 age group) have rewritten the definition of work. That’s bad news for organizations that still hang on to work as a place you go to for 30 or 40 years. It turns out that the workforce is becoming much younger very quickly. By 2013, 47 percent of all employees will be those born after 1977. So, in 2012 and going forward, organizations must focus heavily on building programs to drive engagement among workers under the age of 30. (Re-read trend on Retention.)

7. Recruitment. 2012 will see a dramatic increase in workforce “poaching.” Yes, poaching employees is a rather harsh term for such an honorable profession as human resources. But let’s be honest, many of the employees a business wants to hire are already working. And many companies (although I don’t agree with this tactic, advertise “only employed workers need apply.”) Well, thanks to social media and a war for talent, many of the most desirable skilled workers can easily find job opportunities with competitors without working through head-hunters. For companies trying to ramp up production quickly or find highly skilled talent, the only way to get the talent they need quickly will be to “poach” or steal them from away from competitors. As the speed of change in business continues to increase, talent managers will also need to rethink the “develop internally first” approach. In many cases, recruiting becomes a more viable option because there simply isn’t time for current employees to develop completely new skills. As a result, the trend will be to continually shift the balance toward recruiting for immediate needs and the use of contingent labor for short-duration opportunities and problems. (For more on the likelihood of poaching employees happening, read about retention trends in 2012.)

8. Employer branding. Years of layoffs, cuts in compensation, and generally bad press for business in general will force firms to invest in branding themselves as a good, if not best place to work. The increased use of social media and frequent visits to employee criticism sites (like Glassdoor.com), make not managing employer brand perception a risky proposition. While corporations will never control their employer brand, they can monitor and influence in a direction that isn’t catastrophic to recruiting and retention. Some of the best organizations spend little on marketing, yet put time, energy and resources into making sure they have a sustainable culture. When a company is perceived to be one that really cares about its employees, it can prove to be a great PR or branding opportunity. Customers patronize businesses that care about their employees, and will even pay more if they believe their values are shared by the company.

9. E-Learning. Training and development is being transformed. Time is valuable and every minute away from a job means a loss in productivity especially when organizations are running so lean. But it’s also quite obvious that employees need to keep developing and learning new job skills. Thanks to tools like YouTube, Google and Facebook, we have all become accustomed to “instant gratification” – so online courseware that takes 30 minutes to complete is out. New video based online training now takes no longer than 10 minutes at a time and has been proven to more effective than longer videos and workshops. Short e-earning videos engaging workers better, especially using mobile devices, will proliferate.

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.

 

New Research: Pre Employment Tests Drive Business Results in 4 Key Areas

If your company is like most businesses, your operations, marketing, and sales efforts could be improved. That is where personality and other pre-employment testing come in.

Improvement and high performance requires employees who can increase revenues, reduce costs, improve efficiency, and lead effectively. The process for achieving these goals begins with hiring and promoting the right people. This is accomplished only when your employees have the skills your company needs, the ability to use them, and traits to perform consistently at a high level.

A recent white paper highlights this direct linkage between hiring the right Management and Executive Pre-Employment Assessments people and four critical outcomes: revenues, costs, efficiency, and leadership. According to the report released by SHL Previsor, “it is mission-critical to ensure that new hires and current staff members have the right mix of skills and abilities to be successful.”

That is where personality and other pre-employment testing comes in. Employee assessments helps managers understand whether a potential hire will deliver value to the organization, exposing if an employee would benefit from skills training or personal development opportunities prior to a promotion into a new role. As strategies and market conditions change, expectations and therefore employee capabilities must be adjusted accordingly. It is essential to know whether employees have the skills and competencies necessary to help the organization achieve these new objectives today and in the future.

The SHL Previsor 2011 Business Outcomes Study provided dozens of verified examples of how employee assessment tools provide the clues to make intelligent hiring decisions that deliver bottom line business results. (Admittedly SHL assessments are not part of our assessment portfolio. But their research and case studies write a compelling story for businesses to use employee assessments in their hiring and promotion process.)

For example, they cite one study where managers, who earned high scores on a front-line manager assessment, at a retail organization provided 15% more sales and added $1.9 million to the bottom line in only 6 months. Another study showed that high-scoring contact center agents at a cable and communications provider handled more than 500,000 additional calls than low-scoring agents over the course of a year. On average, these high-scoring agents also sold $269 in additional revenue per month. Across the entire workforce, this translates into an additional $1.3 million sales annually.

More sales isn’t the only bottom line benefit derived from using pre employment tests. A telecommunications company reduced turnover by 18%, saving the company $1.1 million. Agents who earned higher scores on a custom-designed job fit scale were 18% less likely to turn over in the first six months.

Employee assessments also predict better managers. At a food retailer, stores directed by high-scoring managers were nearly three times as likely to be top performers on a set of key performance indicators that included sales, growth, operating profit, and shrinkage.

And with the rapid increase in teleworkers and virtual work, assessing candidates and employees who can work remotely is critical. Off-site employees at a health insurance company who earned high scores were twice as likely to receive “superior” performance ratings. Additionally, they were twice as likely to be viewed as independent and responsible, and 89% more likely to be a good fit for the role.

The report also provides a business outcomes table with many more samples of key business results that have been achieved in four key areas: increasing revenue, reducing costs, improving efficiency, and leadership effectiveness. You can download the report here.

 

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.
 

Interviews Can’t Pass The Pre-Employment Test

For some reason, many managers and human resources professionals feel employee interview screening is safe and personality tests are risky. Little do they know that the EEOC (Equal Employment Opportunity Commission) and other laws protecting employees require that the interview questions you ask candidates must meet the same testing criteria as other employee assessments, including personality tests. But as you will read shortly, it’s nearly impossible for the interview to be a reliable assessment of a candidate’s job fit.

Generally, the first thing that comes to mind when someone hears that an interview went bad was that the interviewer asked an illegal question. For instance, when a manager asks a female candidate, “do you plan to have children?” all sorts of alarms go off. Or when the boss asks the applicant, “what church do you attend?,” it’s game over.

Unfortunately the mere avoidance of illegal interview questions doesn’t make the interview itself compliant. It just means you removed the most obvious danger.

According to the guidelines provided by EEOC and the U.S. Department of Labor Employer’s Guide to Good Practices, the interview is an employee assessment. To be perfectly clear, the term test or assessment is just another form for measurement and every method used to evaluate an applicant is an assessment. The agencies broad sweeping category includes application blanks, recruiting sources, photographs, interviews, pre-employment tests, training workshops, video interviews, and so forth. And, unless you hire everyone who applies, the interview like all the other assessments, are subject to the same criteria.

Legal Interview Questions

Now consider the employee interview. Despite little acknowledgement by business, the interview is notoriously inaccurate and unreliable. That means that the interview nearly always fails one of the two biggest factors (validity and reliability) used by psychometricians and academics to determine the compliance and accuracy of an assessment.

For example, a panel of three managers questions the candidate. Each walks away from the experience with a different perception of the abilities of the candidate. Or a candidate is interviewed over a period of a few weeks: the manager was impressed at the first interview and completely turned off at the second. The change could be the result of the candidate’s behavior, the interviewer’s attitude, or the environmental setting. It really doesn’t matter what changed. What matters is that many interviews fail test-retest reliability. If a candidate isn’t perceived the same way, especially over time, the results are not reliable. Low test reliability does not comply with EEOC guidelines or meet best practices.

But despite this obvious gap in reliability, many organizations continue to rely on the interview as their primary tool for hiring employees and doggedly scrutinize pre-employment tests to find reasons not to use them.

Would your interview process withstand a challenge if it was ever tested for validity and reliability? Why do you feel organizations continue to rely on an employee screening technique that has been proven time and again to be so unreliable?

Comments? Click on the title of this post and share them!

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.

 

Case Study: Mike’s Carwash Named one of the Top Small Workplaces of 2009!

I am very excited to present this case study. Mike’s Carwash has been a client since 2004. In late September, the Wall Street Journal honored and recognized Mike’s as one of the Top Small Workplaces 2009! You can read the full article here.

One of the many factors that contributed to Mike’s Carwash receiving this designation is their rigorous employee selection process that all applicants must go through. They hire approximately 1 out of every 100 people who apply! Needless to say, they are very selective. Mike’s is only interested in hiring top-performing, customer service oriented individuals and has been using two assessments that we offer; CandidClues and JobClues. These entry-level screening tools enable them to go much deeper than a traditional job interview and predict how well a person is suited for their unique work environment.

In this case study, I interviewed Tom Wiederin, HR and recruiting manager for Mike’s Carwash. He holds nothing back, and describes in detail the process they use, along with key factors they track to ensure the employee turnover is kept at a minimum.

Be sure to listen at 6:20 into the interview. Tom talks about a key factor that is directly linked to identifying top applicants.

Congratulations to Mike’s Carwash for being recognized as one of the Wall Street Journal’s Top Small Workplace of 2009!

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