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We Sacrifice Performance to Keep Terrible Recruiting Practices

The average cost of a bad hiring decision can equal 30% of the first year’s compensation, says the US Dept of Labor.

Whenever I talk to my clients about how they plan to achieve the performance and results they want, they typically mentioned that finding, motivating, developing and retaining the best talent available is critical for their vision, culture and execution.  

This is interesting to me, because upon closer inspection of the hiring practices of these same clients, the amount of rigor invested in screening and selecting candidates doesn’t match how important many of them claimed it should be.  And honestly this is not surprising.  As the head of human resources for several companies I often witnessed recruiters and hiring managers who were under so much pressure to fill vacant positions right away, any true rigor in hiring was compromised for expediency and a best guess of who will fit.  I’ve even heard managers joke that “right now I’d take a warm body.”  They are not alone either.  In 2012 released research showing that recruiters only spend an average of 6.25 seconds looking at a candidate's résumé before deciding whether he or she is a fit for a job.  This is just before walking into your office to tell you “I’ve found the perfect candidate for you!”

Before you recoil in shock and indignation, think back and ask yourself if you ever had a candidate show up for an interview that you either forgot about or were too busy to prepare for?  Even if you prepared for days, the likelihood that the typical unstructured interview (screening approach used by most managers) predicts future job success is around 6 - 14%.  However, a study conducted by Yale Management School suggests unstructured interviews aren’t just a waste of time—they may actually harm companies’ and schools’ ability to select the right people (predictability of less than 0%). Given other criteria to judge by, like sales numbers, references, or behavioral test scores, the data say that an unstructured interview—a changeable series of questions that elicits a somewhat random set of information—can cloud our judgment. Whatever our gut tells us about that job candidate we interviewed, the researchers say, we shouldn’t listen.  Though employers have been slow to catch on, studies since the early 1980s have shown that, when compared with other types of tests, unstructured interviews are one of the worst choices for accurately judging how well a particular person will do at a particular job.  Structured interviews aren’t much better.

The Stakes Are High

The average cost of a bad hiring decision can equal 30% of the first year’s compensation, says the US Department of labor.  For executive level jobs this cost can be over 200%.  As much as 80% of turnover can be attributed to hiring mistakes.  

Additionally, there are costs associated with low productivity and engagement from employees working in roles they are not suited for. These are the hidden cost of friction, sub-optimization and lost opportunity.

Why Do We Waste Time on Resumes?

When we screen candidates, we tend to over-emphasize the resume items - their education, experience, technical skills and references.  An influential review of 85 years’ worth of research, conducted by Dr. Frank Schmidt and Dr. John Hunter, showed that the information included in a resume accounts for only 4% of candidate’s future job performance at best.  Other traditional methods, like reference checks, were found to account for about 6% of performance.  It's also estimated that 46% of resumes include at least one discrepancy between the information provided by the applicant and what the employer turns up during a background check.  A shocking 95% of college students say they would lie if it meant gaining employment. Even worse, 41% admitted to having done so in the past.

Assessments to the Rescue!  What if You Could Determine Ideal Candidate Fit Prior to Hiring Them?

The research on the power of other assessment methods and approaches has been more promising. For example, these studies demonstrated that well-designed behavioral and cognitive ability tests can be up to 900% more powerful than a resume or interview for helping you predict job performance. This makes sense if you consider that education and experience (i.e., the information in a resume) has far less of an impact on performance than an employee’s ability to learn from that experience, solve work-related problems, and be a natural behavioral fit for the job (i.e., behavioral and cognitive ability).  What if you were able to determine the ideal behavioral and cognitive target profile for any particular job?  And what if there was a built-in algorithm that determines degree of fit when matching the behavioral and cognitive profiles of candidates and employees against those ideal target job profiles?

Fortunately, there is such a tool. The Predictive Index leverages the power of science, tested and validated over the past 60 years, with cutting edge technology to help employers make accurate selections for open jobs, ensure the right people are in the right existing jobs, and in the process improve company performance and employee engagement.  To top it off, the assessment takes 6 minutes to complete.  

If you could accurately measure a person’s natural behavioral and cognitive fit for a job why wouldn’t you?  

Try it here: Behavioral Assessment

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