Hiring Process Improvement
A previous newsletter discussed the value of talent and how good selection systems can lead to big improvements in a company's bottom line. The question is: When do selection systems need to be redesigned? Obvious reasons include a change in job duties or when measures of performance change. A less obvious one is when a client just wants a better (more valid) system.
It is odd that HR systems are rarely subjected to the same process improvement scrutiny as other business operations. You would never walk into a manufacturing plant and hear someone say, "We just haven't looked at any ways to do things better in the last 5 years." But, many organizations have hiring systems that are more than 5 years old.
Last year, a telephone contact center client that is very much into process improvement asked about improving their selection system. They were already using valid tests and were looking for even more accuracy in their selections. While implicitly acknowledging that some tests are better (more valid) than others, most test users want to be sure that the test they are using is valid instead of asking, "How can we make the system more effective?" This client was asking that question.
In re-examining the selection system, it was determined that the skills and personality characteristics were pretty well covered. However, line managers felt that there were some background issues (e.g., job history and experience in a variable pay environment) that might be good predictors. Their input was used to create a short Life Experience Questionnaire (LEQ). After the questions were vetted by the attorneys, the LEQ was administered and validated with job incumbents. The validation study showed that the addition of the LEQ made the selection system more accurate. It was then implemented and used for all news hires.
But, did all this effort lead to better hires? In order to determine whether or not this effort resulted in better hires, performance data was gathered to compare those hired with the new system to those hired by the old system. The new hires, as a group, outperformed the incumbents by 15% over a 12 week period. This translates to a sales increase of $35,000 per hire.
The moral of this story? Even valid selection systems can be significantly improved. These improvements can help HR add to a company's bottom-line performance.
If you would like to discuss implementing or improving your selection systems, please contact Warren Bobrow.
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