Whether you are an HR professional or in talent development, my guess is that you’ve been hearing a lot of banter about the terms metrics, analytics, and big data over the last year or two. However, perhaps the most important “people decision” being made in organizations—employee selection—is late to show up to this data-centric party. A 2014 Aberdeen study, Measurement Strategies for Assessment Success, found that only 14 percent of companies have data to show the business impact of their employee selection assessment strategy. With payroll and benefits representing one of the largest line items on virtually every company’s operating statement, effective selection is one of the top areas where we can have a significant impact on the bottom line by making more scientific, predictive, and evidence-based decisions.
Virtually everyone has acknowledged the fact that getting the right people in the right jobs is critical to business success. But how to get the right people continues to elude many. I have talked with organizations that have tried to incorporate everything from horoscopes to a deck of playing cards into their selection process, all in a vain attempt at systematically identifying which candidates have the best chance of becoming strong employees. I suggest putting the Ouija boards and crystal balls away, and instead focusing on three essential steps to improving the science of selection:
- Clarity. We need to think more strategically about the desired outcomes of our selection systems. “We want to hire better people” is not a clear enough goal. What is it you are actually trying to change—turnover, retention, sales volume, customer satisfaction, morale, productivity, theft, absenteeism, safety incidents, drug use in the workplace? There are different assessment instruments designed specifically to address these and countless other issues or goals. Once your objective is clear, you can determine what constructs you can measure that will predict that outcome.
- Validity. Predictive validity should be a driving factor (if not the driving factor) in creating selection systems. Extensive research has been done on the predictive validity—the overall ability to predict job performance—of different hiring methods and measures. Yet many practitioners continue to rely on some of the least effective predictors, including interviews, reference checks, and personality tests in their selection decisions. There is only one question that matters when deciding to incorporate a selection method: Is the information gleaned from this tool predictive of future job performance? If the answer is no, there is no point in using it, regardless of how cheap, easy, or popular it is.
- Metrics. Selection-system outcomes should be tied to organizational metrics. We should be able to demonstrate that the use of a particular tool has had a direct impact on some organizational outcome of interest. In other words, as test scores go up, turnover goes down, or as test scores go up, sales volume increases. There are several ways to analyze these data, and many are actually very manageable (even for those of us who didn’t choose our profession due to our love of statistics!).
The push for more evidence-based, scientific approaches in people management is here, and you don’t want to be left out of the party! Here are some questions for reflection:
- Are you feeling pressure to incorporate more data-supported or evidence-based methods in your job? If not, could it be coming? Have you been hearing more about metrics, analytics, or big data? Is now your chance to get ahead of the curve?
- Is there anything you can do to increase the predictive validity of your hiring process? Are the steps in your current process yielding measurable results? Are there tools that could help your process be both more effective and more efficient?
- Can you calculate the impact that your hiring processes have on your organization’s bottom line? If pressed, could you tell your C-Suite exactly how accurate your selection system is, and quantify the ROI of your efforts? Is there an opportunity to further solidify your strategic value to the organization by improving in this area?
For more advice on how to improve your organization’s hiring practices in practical and cost-effective ways, attend Hiring the Right People, an ATD virtual event on December 3, 2015. Facilitators will provide practical, hands-on solutions to help you pinpoint the skills and personality attributes that are needed to succeed in a given position or organization.
