Replacing an employee costs you 9 months of their salary
How Hiring Using Predictive Analytics Saves Time and Money
According to Zane Benefits, every time a business replaces a salaried employee, it costs 6 to 9 months of that person’s salary in recruiting and training costs. One way to lessen turnover (as well as save time and money!) is to use predictive analytics in assessing candidates during the hiring process.
Predictive analytics uses data to forecast future results. Forbes explains that companies have used predictive analytics to “predict trends, understand customers, improve business performance, drive strategic decision-making and predict (consumer) behavior”. Companies use this data to increase sales and decide on new products to develop, but they can also use predictive analytics in the hiring process. This type of data is key to understanding the personality traits and behavior profile of a potential employee, ensuring the candidate will be a long-term match for the company.
A study by Cornell University identified what traits should be reviewed using predictive analytics for recruiting executives in particular. They looked at two types of behavior orientations: resource-problem solving oriented and people-oriented. “The research found that the former group was key in predicting initial performance while the latter group was a more accurate predictor of future performance trends.”
In 2012, Wells Fargo started implementing predictive analytics for screening employees prior to hiring. By 2015, they screened over two million people and reported to Predictive Analytics Times that after studying retention rates, “teller retention improved by 15% and personal banker retention improved by 12%”.
While the need for predictive candidate assessments is critical, setting one up from scratch can cost up to $10,000 and take hours to administer! The good news for businesses of all sizes is that technology has evolved so that recruiters and Human Resource Managers can test thousands of people in only fifteen minutes for a small price per month by using a service like Talentoday Manager.
Talentoday can predict an individual’s behavior in the following categories: teamwork, ability to take initiative, management style, ability to handle pressure, reasoning style, communication style, and flexibility. Below is an example of a marketing specialist named Alex. Alex’s assessment shows that stressful situations energize her, and that under pressure, she’ll be motivated rather than put off by challenges.
An employer is never going to change an employee’s personality traits, but behaviors can be taught. Tools like Talentoday’s use objective, psychology-based screenings to provide employers critical information on candidates’ personalities and motivations. In this way recruiters and talent managers can best predict a candidate who will thrive in a particular role, and what training a great candidate might need to fill the gap to ensure long-term success.
Curious about how analytics can save you time? Start your free trial today and use predictive analytics to make smart hiring decisions. And if you like this post, please hit the ❤️ button below or give me a shout on Twitter.
