How Automated Online Reference-Checking Is Changing the Hiring Game

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Research from SHRM shows that 96 percent of human resources professionals check references, yet less than 25 percent of those checks are able to produce adequate information beyond employment verification. What happened to reference-checking?

This session will examine where the reference-checking function has come from in the past — when it was a hiring formality that was checked off and completed over the phone — to its evolution now as an opportunity to collect 360-degree feedback that predicts performance and retention.

Learn how technology has introduced a way for talent acquisition professionals to capture behavioral feedback from five references in two days for each job candidate, and how to avoid the 10-15 percent of candidates who score low with references. Also, see an overview of how this technology infuses consistency, reliability and validity into each reference check and obtains scores that identify candidates’ developmental needs.

What will participants learn?

How to improve quality-of-hire by avoiding the 10-15 percent of candidates who score low with references.
How to capture behavioral feedback from five references in two days for each candidate.
How to infuse consistency, reliability and validity into each reference check.
How to identify developmental needs of each candidate.
How to provide information to hiring managers that influences decisions.

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How Automated Online Reference-Checking Is Changing the Hiring Game

  1. 1. You can listen to today’s webinar using your computer’s speakers or you may dial into the teleconference. If you would like to join the teleconference, please dial 1.650.479.3208 and enter access code: 499 942 839 #. You will be on hold until the seminar begins. #TMwebinar
  2. 2. Speaker: Jack Kramer Vice President Field Operations SkillSurvey Moderator: Ladan Nikravan Associate Editor Talent Management Magazine #TMwebinar
  3. 3. • Q&A – Click on the Q&A icon on your floating toolbar on the top of your screen. – Type in your question in the space at the bottom. – Click on “Send.” #TMwebinar
  4. 4.  Polling  Polling question will appear in the “Polling” panel.  Select your response and click on “Submit.” #TMwebinar
  5. 5. 1. Will I receive a copy of the slides after the webinar? YES 2. Will I receive a copy of the webinar recording? YES Please allow up to 2 business days to receive these materials. #TMwebinar
  6. 6. #TMwebinar Ladan Nikravan Associate Editor Talent Management magazine
  7. 7. #TMwebinar Jack Kramer Vice President Field Operations SkillSurvey
  8. 8. Revolutionized Assessments for Business How Automated Online Reference- Checking is Changing the Hiring Game SkillSurvey Pre-Hire 360™
  9. 9. The History of a Reference Check • Historically – One of the most important steps – Hiring managers talked to previous managers • How are they day to day? • Nuances? • What challenges do they have and what can I do to make them A+ players? • Actionable Information – Will it help make a decision? – Will it screen out or have candidate rise to the top? – Will this information help this person succeed? – Will this information predict behavior?
  10. 10. Necessary for making informed hiring decision Historical Phone Checking
  11. 11. History of Reference Checking Effectiveness Actionable Information Reference Checking Past 40 Years 1990’s1970’s 20001980’s 2010 Can we make it relevant again? Should it be?
  12. 12. The Lawyers Get Involved • The 1990’s and the new millennium – Legal issues arise – HR cracks down and bans reference checking • What are the options? – Outsource the process – check the box
  13. 13. Results of Outsourcing • 4 simple answers • Does it really help make a decision? Key Success Traits • Interpersonal Skills • Teamwork • Honesty • Dependability • Integrity
  14. 14. The Lawyers Get Involved • The 1990’s and the new millennium – Legal issues arise – HR cracks down and bans reference checking • What are the options? – Outsource the process – check the box
  15. 15. The Lawyers Get Involved • The 1990’s and the new millennium – Legal issues arise – HR cracks down and bans reference checking • What are the options? – Stop doing it? • If you do try and reference check: • Countless hours of phone mail tag, email tag, phone mail tag • Weeks and weeks of time – All for no actionable information
  16. 16. • Bad Hire has an impact • Various by organization and by job role – Hard dollar cost – base salary, benefits, on board training, exit costs – Internal team turmoil – Customer satisfaction – Compliance (Finance – SOX issues and the Fed’s) • For sales roles – Cost of lost revenue – Asset is time – time is lost forever • For clinical roles – HCAHPS and reimbursements Impact of a Bad Hire
  17. 17. Dependable Employees Absenteeism is a chronic problem among U.S. retail employers • Conservatively costs $3,600 per hourly employee per year and $2,650 per salaried employee per year • A company with 5,000 hourly employees has the potential to reduce costs by over $7.9 million per year (3.2% of total payroll) • Results in lost productivity, high-cost replacement workers, and excess staffing Results in reduced ability to meet demand leading to dissatisfied customers
  18. 18. Employee Retention in Retail Is Turnover Really a Fixed Cost?
  19. 19. Can we make an impact by identifying behaviors before they are hired? Can HR Make An Impact?
  20. 20. The Results are in……. 0 10 20 30 40 50 60 70 80 Minimal Moderate Great Percent DevelopmentalNeed 10 + years of statistics prove out - SkillSurvey References Perceive Candidates in the following categories 5-10 % High Risk Candidates 10-15 % Moderate Risk for Success Candidates 80-85 %Validated Low Risk
  21. 21. Should be a Poll Question: Can We Identify Them? D’s and F’s are a must to avoid
  22. 22. Categorize the Candidates 0 10 20 30 40 50 60 70 80 Minimal Moderate Great Percent DevelopmentalNeed The A’s, the B’s, the C’s, the D’s, the F’s 5 % D and F’s
  23. 23. The D’s and F’s We all know this person. - Asking the question: - Who hired him? - Why is he still here?
  24. 24. The Hard Cost of Bad Hire – Real ROI The U.S. Department of Labor currently estimates that the average cost of a bad hiring decision can equal 30% of the individual’s first-year potential earnings. That means a single bad hire with an annual income of $50,000 can equal a potential $15,000 loss for the employer. Question for the attendees: Can you think of one person your team hired recently where you made a mistake? Hiring manager override gone bad? Example – RN $60,000 x .3 = $18,000
  25. 25. • Finding the B’s and C’s • Seems to be many in pool • The interview: – Seemed ok, better than most – Something nagging – ….3 months later – C – player – I knew it The B’s and C’s "I noticed that the dynamic range between what an average person could accomplish and what the best person could accomplish was 50 or 100 to 1. Given that, you're well advised to go after the cream of the cream. ...A small team of A+ players can run circles around a giant team of B and C players.“ --- Steve Jobs
  26. 26. The B’s and C’s are Hard to Identify A players B and C players
  27. 27. Large Percent of Candidate Pool 0 10 20 30 40 50 60 70 80 Minimal Moderate Great Percent DevelopmentalNeed The A’s, the B’s, the C’s, the D’s, the F’s 15 % B & C’s 80 % A’s
  28. 28. B Player is Singled Out and Hired B Player is Chosen • Some gaps • No show stopper issues • Onboarding plan • Know the issues before day 1
  29. 29. Less than one minute 85% Response Rate Confidential Reference Feedback Two Days or Less Identify Avoid Validate Skeptical?
  30. 30. The Real Cost of Bad Hire – Cream of the Cream • Hiring for Mediocrity • Driving to the A player on every candidate • Cost of B’s and C’s – HCAHPS – Customer Satisfaction – Sales – Avis – we try hard to be the best (#1) • Must focus on the A’s • Identify those who can be B+ players
  31. 31. What is the Problem? • Most candidates do a nice job presenting themselves during interviews – All are team players – All show up for work and don’t text, sit on Facebook all day – Most are ethical and always do the right thing • Most candidates are well rehearsed in the question/response mode – Books, job seeker sites – Experience interviewing all the time • Your only view today is from the candidate’s perspective – Really need a true 360 review from those who saw the behavior in the past
  32. 32. Phone interview Face to Face Personality / Behavior Assessments Resume From Candidate Perspective – Today’s Approach I’m terrific I work really hard, weekends too! I interview well I’m a Team Player Recruiter Candidate
  33. 33. Phone interview Face to Face Personality / Behavior Assessments Resume From Reference Perspective – Today’s Approach She’s terrific I would hire her again, yes! She works hard She’ a Team Player Recruiter Reference
  34. 34. Phone interview Face to Face Personality / Behavior Assessments Resume A New Perspective – The New Paradigm Dependability Interpersonal Skills Personality Work Ethic Teamwork Integrity References Recruiter
  35. 35. Comparison Online Solution Typical Phone Check More references 5+ business references 50% of which are former or current Supervisors 2 to 3 Faster 1 to 2 days 5 to 10 days Guide Hiring Managers Previous managers assisting in leading interview No Pauses a hiring decision 5% - 10% of candidates < 1% of candidates? Passive sourcing tools 5 references per candidate – warm leads Not Applicable Compliant/Legal Risk Supports compliance with EEOC and OFCCP Uncertain/Inconsistent
  36. 36. Why You and a Better Process? • Improve – Quality of Hire – Hiring Manager’s Interview Effectiveness – Efficiency – Passive Sourcing • Drive – Compliance and Consistency • Elevate Recruitment’s Role
  37. 37. Improve Hiring Manager’s Interview Effectiveness • Lack of consistency for hiring managers • Managers looking for differences in candidates • Probing questions driven by previous managers’ comments
  38. 38. Patient Satisfaction - HCAHPS
  39. 39. Behavioral Interview Questions
  40. 40. Improve Efficiency – Time and Money RecruitersSourceCandidates Screen to top 3 candidates
  41. 41. • Improve efficiency – time and money • Six Sigma  From 60 work weeks to 4.8 0 10 20 30 40 50 60 Telephone SkillSurvey Work weeks to reference check 2,272 job candidates Solution resulted in a 92% Reduction in Time Spent reference checking Exclusive Case Study: Improved Efficiency – Time and Money
  42. 42. Passive Sourcing by the Numbers Job opening 100 Candidate s 300 Reference s 1,500 An organization has 100 job openings 3 candidates apply on average for each job = 300 candidates 3 candidates SkillSurveyed and provide 5 references each = 1,500 potential contacts 65% of the 1,500 contacts opt in to learn about future career opportunities. 1,500 x .35 = 525 + passive candidates 1 2 3 4 Talent Pipeline and Funnel • Multiplier Effect Based on Number of Candidates Screened • Builds Automatically Industry Professionals with Whom To Network and Source • “Great People Know Great People” • “Warm Lead” vs. “Cold Lead”
  43. 43. Science Compliance Risk Risk and Compliance Management
  44. 44. Increase Compliance and Consistency • It is all about the science - Validity of survey questions – Do the questions validate what you are actually asking? – Do the questions help predict future behavior? – Are the questions being asked in a way that reduces risk? • Sample question – What high school did you go to? • SkillSurvey reference feedback shows no differences between sub-groups – Helps support your efforts to remain EEOC and OFCCP compliant • Standardized process
  45. 45. • Clear ROI for Finance and Budgets – Quality of Hire – Turnover – Efficiency – Passive Sourcing • Elevate Recruitment’s Role Why You and a Better Process?
  46. 46. 1 minute 5 minutes 10 minutes 2 seconds
  47. 47. Survey Availability Job Level ► ▼Job Family Entry- Level Hourly Clerical Professional Supervisor Manager Executive General        Production      Sales        Marketing      IT        Operations      Customer Service       R&D     Admin       Finance       Legal       HR       Engineering      Education     Healthcare       
  48. 48. Step 1: Enter Candidate Data
  49. 49. Step 1a: Select Survey Send email to candidate
  50. 50. Sample Libraries: Finance
  51. 51. Other Libraries: IT
  52. 52. Other Libraries: Customer Service
  53. 53. Other Libraries: Healthcare
  54. 54. Step 1a: Select Survey Send email to candidate
  55. 55. From: org name Recruiting Sent: Thursday, November 06, 2008 12:57 PM To: Patrick T Subject: org name Selection Process Information Dear Patrick T, Thank you for your continued interest in the Major Account Sales position with org name. As already explained to you, a critical step in the selection process is reference checking. org name uses web-based reference checking for this purpose. Please click on the link below. It will open a web page where you will input your reference. You will also be able to review a sample of the questions being asked and the email that will be sent to your references. Your references will be emailed a reference survey and their responses will be submitted directly back to SkillSurvey. No one will see your references' individual responses because all responses are electronically aggregated together to produce one summary report. Note that all references will be responding as individuals, not as representatives of any company or organization. Please click on the following link (URL) to begin: http://eref.skillsurvey.com//CandidateUtilities/EOC.aspx? Step 2: Candidate Enters References Automated Email From Recruiter to Candidate Explaining the Process
  56. 56. Step 2c: Candidate Confirms References and Signs Legal Waiver Proof of Consent “…I hereby release any such person, their company, and any affiliated officers, directors, agents, and employees from any and all claims I may have arising out of the disclosure of such information…”
  57. 57. The Surveys: Job-Specific, Behaviorally-Based Questions
  58. 58. Job-Specific, Behaviorally-Based Would you like to learn more about job openings at Your Co name?
  59. 59. Drive Warm Candidates to Career Page
  60. 60. Step 4: Aggregate Reference Responses into Actionable Intel
  61. 61. Validated Candidate – Good Fit
  62. 62. Validated Candidate – Good Fit
  63. 63. Pause or Avoid this Candidate – Low Scoring
  64. 64. Professionalism
  65. 65. Interpersonal Skills
  66. 66. Patient Satisfaction - HCAHPS
  67. 67. Verbatim Comments
  68. 68. Verbatim Comments
  69. 69. Passive Candidate Database
  70. 70. • Clear ROI for Finance and Budgets – Quality of Hire – Turnover – Efficiency – Passive Sourcing • Quickly Implement and Easy “Win” for HR • Elevate Recruitment’s Role in the Organization Why You and a Better Process?
  71. 71. Sample Clients Sample Clients
  72. 72. SkillSurvey Usage and Growth
  73. 73. About Us: SkillSurvey • Providing Reference Solutions since 2002 • Inventor of web-based reference checking – Patent pending • 37,611 Candidates in June 2013 – June 2012 – 30,621 – Over 1,000,000 candidates entered since 2008 – Over 5,000,000 people experienced the SkillSurvey process • 750+ customers • 319 surveys in current inventory – 23 different job families – Cynthia Hedricks, PhD, Chief Analytics Officer – 92 Surveys for Healthcare roles, 22 Surveys for IT roles, 12 for Sales roles, 10 for Customer Service roles, 22 for Finance roles, 15 for Retail roles, 13 for Education
  74. 74. Contact SkillSurvey www.skillsurvey.com Jack Kramer, Executive Vice President Field Operations jkramer@skillsurvey.com 610-947-6300 x 1203
  75. 75. Join Our Next Webinar “Why the Future of Learning Is Blended” Tuesday, August 13, 2013 Webinars start at 2 p.m. Eastern / 11 a.m. Pacific Register for upcoming TM Webinars at www.talentmgt.com/webinars Join the Talent Management magazine Network http://network.talentmgt.com/ #TMwebinar

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