If hiring is broken, how do we fix it?

According to research by SHRM and others, most organizations have difficulty keeping up with the changing pace of HR, and most are in fact using outdated, or invalid measures.

For example, in one off-quoted study:

82% of responding SHRM HR practitioners believed incorrectly that Conscientiousness was a better predictor of job performance than Cognitive Ability
84% believed incorrectly that companies that screen for ‘values’ had higher performance than those screening for intelligence
69% believed incorrectly that integrity tests had racial bias and adverse impact
68% believed that integrity tests had little to no value because people would simply lie on them.

Yet, research has shown that all of these beliefs are ‘false.’ (Source 1). In fact, there is a huge issue around knowledge transfer from what is known to be best practice, and what most companies currently do. The hiring process for most companies is like that illustrated below:

So, what is the most effective way to hire?

According to Frank L. Schimdt and other leading academics who have recently updated past work and looked at the results of over 100 years of testing and assessments, the best way to hire is by combining muti-measure methods — with Cognitive Assessment, interviews and integrity tests as the foundation. (Source 2).

Source 2

Cognitive testing is the most robust, ‘gold standard’ of hiring — by far.

While it is most effective for jobs that require more cognitive complexity, it is still a significant predictor for more manual or hourly worker type positions.

Yet, according to a 2014 article in the Harvard Business Review and the work of the Aberdeen Consulting Group, only 14% of all companies currently have any data that links their assessments to actual company outcomes.

Compounding this problem is the fact that a large majority of companies are now relying solely, or almost solely on personality tests. (Source 3).

Why does it even matter? There are a few simple reasons:

Why does this happen?

  • The stand alone ‘generic’ personality tests now being most widely used are not likely to be very predictive, if at all, in producing real business results. This means that most companies are incurring large, but avoidable costs, and losing huge amounts of earnings in lost productivity by hiring the wrong people.
  • The ‘generic’ tests being used have not been shown to work for a given company, in a given role, and may open companies up to litigation risks. For example, Target agreed to pay $2.8 Million to settle a lawsuit in 2015 over allegations that its assessments were discriminatory against certain demographic groups (Source: “http://fortune.com/2015/08/24/target-discriminatory-hiring/”).
  • The people being hired are having poor work experiences, poor job-person fit and less than ideal careers — meaning that they will likely speak ill of your brand or company as a result.

Why does this happen?

A big part of the reason is that a smaller percentage of assessment providers offer truly multi-measure tests. Most focus on one dimension — personality tests or reference checks or automated interviewing or cognitive testing, and nearly all claim that their method is best.

But, that’s not what the either the research or common sense shows.

The best way to build high-quality hiring models is to take into account multiple forms of candidate evaluation.

The best way is to combine more ‘impersonal, but repeatable’ methods with your company’s own actual historical data AND the expertise of your people in charge of hiring — and to make sure that the results are job, company and if necessary location specific — so that any models that result are linked to real workplace outcomes, and fair.

Talytica is dedicated to leading a ‘talent analytics’ revolution — making it much easier and more practical to use custom talent analytics at scale.

We don’t just do hiring, we also help companies figure out who to promote or transfer internally based on fit.

Contact us to learn more, or try us out for 30 days.

SOURCES:

  1. A 2002 study of over 1,000 SHRM professionals: “HR PROFESSIONALS’ BELIEFS ABOUT EFFECTIVE HUMAN RESOURCE PRACTICES: CORRESPONDENCE BETWEEN RESEARCH AND PRACTICE.” By Sara L. Rynes, Amy E. Colbert, and Kenneth G. Brown).
  2. A meta-study on over 100 years of research: “The Validity and Utility of Selection Methods in Personnel Psychology: Practical and Theoretical Implications of 100 Years of Research Findings.” By Frank L. Schmidt, In-Sue Oh, and Jonathan A. Shaffer.
  3. “The Problem with using Personality tests for Hiring”, by Whitney Martin.

Originally published at www.talytica.com.