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.

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