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Maximize Quality of Hire through Recruiting
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Maximize Quality of Hire through Recruiting

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Human resource executives have a clear and growing interest in how pre-employment assessments can be helpful to their business. A recent study from Aberdeen Group included a survey of HR executives ...

Human resource executives have a clear and growing interest in how pre-employment assessments can be helpful to their business. A recent study from Aberdeen Group included a survey of HR executives in which 61% rate talent acquisition as their top priority in 2012. Since assessments play a critical role in determining the “talent” available in talent acquisition, this means that assessments are an important part of
the talent acquisition priority.

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    Maximize Quality of Hire through Recruiting Maximize Quality of Hire through Recruiting Document Transcript

    •   MAXIMIZE QUALITY OF HIRE THROUGH YOUR RECRUITING PROCESS February 2012   1
    •  IntroductionHuman resource executives have a clear and growing interest in how pre-employmentassessments can be helpful to their business. A recent study from Aberdeen Groupincluded a survey of HR executives in which 61% rate talent acquisition as their toppriority in 2012. Since assessments play a critical role in determining the “talent”available in talent acquisition, this means that assessments are an important part ofthe talent acquisition priority.The growing use of assessments is also being driven by several factors ranging fromtechnological innovation to the ability to standardize a process that is often ad hoc andopen to variance.The growth of cloud-based applications is one technology factor driving the adoptionof assessments. The technology benefits from cloud deployments allows assessmentcontent providers to easily deploy assessment content, connect platforms to createinteroperability, and customize client solutions while maintaining scalable economicswhich reinforces a strong value proposition.Big data, business intelligence, and analytics are also driving the use of assessmentswithin talent acquisition solutions. The same factors being realized elsewhere in theenterprise apply equally well within talent management and acquisition. HistoricallyHuman Resource departments have not been able to quantify the investment returnlike operations or information technology has historically been able to show.Now, though, recruiting leaders can demonstrate a clear linkage between assessmentcontent and business outcomes through analytics that link the hiring process to newhire performance over the employee lifecycle. In a January 25th article on ERE.NET byJohn Zappe, Aberdeen Group Analysts, Madeline Laurano and Mollie Lombardodiscussed findings from their research report, “Organizations that integrate talent datawith business data are three-and-a-half times as likely to achieve Best-in-Class as thosethat do not integrate data.”Finally, the process to implement assessments, when done correctly, enables theorganization to drive objectivity and alignment. This process allows for:  A job analysis which enables the hiring team to determine the competencies that drive job success, gain alignment on these competencies, and use them in future discussion on training, coaching, and ongoing development.  Standard evaluation of candidates using objective tools that measure these key competencies.  A validated process that has been calibrated to job performance. When communicated to the hiring managers, this enables everyone to understand how the hiring process is related to business outcomes.  A closed loop analysis process. As discussed earlier, the economics, availability, and integration of data enable recruiting leaders to deeply understand their     2
    •   hiring funnel, if a candidate meets quality of hire baselines, and ongoing performance improvement opportunities.How does this relate to recruiting?With the growing interest and application of assessments as part of a data-driven talentacquisition process, understanding factors that may limit your organization’s use ofassessments is important. Your recruiting process is potentially one of those factors.The recruiting and sourcing process potentially creates a bottleneck that reduces theeffectiveness of your assessment tools and ultimately your talent acquisition process.In a well-designed hiring process, you start by creating key foundations. A job analysisdefines the competencies that are important to job performance. Understanding thecompetencies also enables you to select the right assessment content. For example, tomeasure multi-tasking, you are better to use a simulation than a structured interview.To measure integrity, you are better to use a personality assessment than a problemsolving test.Once you have selected the assessments, you must demonstrate how a candidateassessment score links to job performance. This validation process provides you thefoundation to identify an appropriate pre-hire assessment profile. The strength andbreadth of your labor pool is an important consideration in determining how stringentyou can be in designing that profile. If you design the pre-hire assessment profile tobe very stringent or selective, fewer candidates will “pass” the assessment process,potentially making it more difficult to fill job openings, but those candidates should bebetter qualified to perform well on the job.To illustrate this, consider the following example taken from a contact centerorganization. In this example, two assessment hiring profiles were created based onvalidity evidence and analysis of the candidate population. In Profile 1, a 75% pass ratewas modeled. This means that out of every 100 candidates, 75 will “pass” theassessments and be eligible for hire. In Profile 2, a 50% pass is modeled. This meansthat only 50 out of every 100 candidates will pass the assessments and be eligible forhire. The premise is that the more selective the hiring team can be, the greater theprobability that they will be able to hire an individual who will perform better.For simplicity purposes, we will assume that all candidates who pass the assessmentprocess are hired. We will also examine $$ collected per hour as the performancemetric used to determine quality of hire.Being selective enough to hire the top 50% of candidates rather thanthe top 75% results in average new hire performance of $25.85 moredollars collected per hour, or a 30% performance improvement.     3
    •  Under Profile 1 more candidates pass the assessment process. This means that morecandidates who are potentially low performers are allowed into the talent pool forconsideration; however, the trade-off is that recruiting can recruit fewer candidates perjob opening because more will pass the process (making openings easier to fill).However, under Profile 2, the average performance increases because those lowerperformers are eliminated by the assessment process. The trade-off is that therecruiting team needs to source 66 more candidates to reach 100 hires. Profile 1 Profile 2Assessment Process Pass Rate 75% 50%Number of Candidates Needed to 134 200Reach 100 HiresPerformance Results $84.85 $110.70 Increase in $ Collected / Hour compared to baseline*% Improvement Profile 2 over Profile 1 N/A 30%* Baseline = $ Collected/Hour by employees hired without the use of pre-hire assessments.In this example, the hiring team has two options to consider. Both options provide themwith a substantial improvement over the baseline performance of employees hiredwithout the use of assessments. However, if recruiting can maintain enough candidatesat a 50% rate to meet their fill rates, then they have positioned the business to benefitfrom a potential 30% performance improvement in $ collected per hour.Ways to improve recruitingIn the previous section, we demonstrated the impact of being more selective in therecruiting process. With a lower pass rate, more low performing candidates areeliminated from consideration. In order to be able to be more selective, though, weneed to be able to recruit as many candidates into the top of the funnel as possible.In this section, we will highlight strategies and tactics that have enabled organizations toimprove their ability to recruit more candidates into their hiring funnel.     4
    •  Strategy / Tactic DescriptionRight Sized Recruiting Team  Many recruiting teams have headcount reduced and administrative tasks added to their workload making them ineffective at sourcing candidates.  Consider using number of hires per recruiter as a metric to maintain the right sized recruiting team.  FurstPerson data indicates that between 150 hires and 200 hires per recruiter is a target zone.Create an incentive plan for  Tie recruiter compensation to performance. Metrics to considerthe recruiting team include attrition and fill rate. Examples include credits for employees that stay for 90 days and deductions for those that term within 90 days. Another example is to establish a bonus amount. For each new hire that terms, a debit is applied against the bonus.  Make sure to have individual and team components.  The goal is to create a performance based compensation model that is similar to third party recruiting firms.Hire the right recruiting  Carefully determine each role on the recruiting team and hireteam talent specifically to that role. Each recruiting team should have roles for individuals that are masters in sourcing candidates. Making sure the recruiting team is staffed for each role is critical for success.Centralize Common  Assuming you conduct hiring in multiple locations, determine whatRecruiting Processes for processes can be centralized to reduce costs and allow for localBetter Utilization resources to be more flexible.Move the Recruiting Process  Web-based tools make online hiring accessible and cost effective.Online  FurstPerson data shows that organizations can increase applicant flow 1.5 to 2.5 times in-office applicant volume by moving the process online.  Be prepared for “window” shoppers that start the process but do not finish.Allow for adequate time to  Make sure to provide adequate notice to the recruiting team sofill they have the appropriate time to fill each class. This is critical to enabling recruiting teams to meet the sourcing requirements of hiring profiles like profile 2 in the example above.Focus on internet based  Internet based recruiting has proven to drive both candidaterecruiting and employee volume and quality. Consider shifting efforts away from job fairsreferral programs and newspaper ads towards internet based sourcing.  Rethink your employee referral program to run it more like a sales process (Leads / Qualified / Opportunity / Close). Ditch the generic referral program where you offer the referral reward at the end of the year if a referral stays. Instead, break-down the program into milestones at point of referral, date of hire, first day on job, 30 days, 60 days, and 90 days. Use each referral to reinforce the program to the organization.     5
    •  Strategy / Tactic DescriptionRecruitment Sourcing  Hiring teams that maximize their quality of hire relentlessly focusAnalysis on linking recruiting sources to new hire performance data so that they can optimize their recruitment spend.  Consider analyzing each recruiting source on the basis of number of candidates generated, retention results at 30, 60, 90, and 180 days and overall performance based on scorecard, rating, and review. Each source can then be assigned a ranking which can be used to shift investment away from poor recruitment strategies to better performing ones.SummaryTalent acquisition is a key priority for human resource executives. Pre-employmentassessment tools enable hiring leaders to evaluate job candidates to determine how theypotentially fit a hiring profile for specific jobs. Being able to hire individuals that meet orexceed these profiles enables the organization to improve quality of hire.The ability to be selective based on job performance during the recruiting process allowsthe organization to hire new employees that are potentially more capable. When wecompared profile 1 and profile 2, we saw that hiring at a 50% pass rate enabled theorganization to drive 30% higher performance compared to hiring at a 70% pass rate.However, recruiting and sourcing can impact the ability of organizations to hire at aprofile 2 level compared to a profile 1 level. Organizations must rethink how theirrecruiting teams are hired, structured, and compensated. In addition, using differenttactics to drive sourcing and analyzing the effectiveness and efficiency of the sourcingtactics will remove the guesswork out of the recruiting process so that your recruitingteam is driving performance improvement.Notes1. Infusing a “Talent First” Culture Through Integrated Talent Management by Madeline Laurano, Aberdeen Group, January 1, 2012; http://www.aberdeen.com/Aberdeen-Library/7474/RA-integrated-talent- management.aspx .2. “HR Still Struggling to be Strategic,” by John Zappe, ERE.Net, January 25, 2012; http://www.ere.net/2012/01/25/hr-still-struggling-to-be-strategic/     6
    •  About FurstPerson.FurstPerson, based in Chicago, has been helping organizations solve hiring problemsthrough a consultative, technology enabled approach since 1997. FurstPerson focuseson customer contact organizations that hire for contact center jobs, retail jobs, fieldservice jobs, and other customer facing jobs.FurstPerson’s solutions incorporate pre-employment assessment tools with professionalservices and expertise that help organizations discover hiring challenges, solve thesechallenges, and advance the solution forward resulting in sustainable return oninvestment. FurstPerson has been an innovator for customer contact hiring including theuse of simulation technology (CC Audition® call center simulator), contact center homeagent hiring models, and configurable technology to match your hiring workflows. Youcan learn more at furstperson.com or call us at 888-626-3412.     7