The Recruiting News
Five Critical Things to Know About Employee Assessment Technology
(September 14, 2011) As competition and labor costs increase, companies realize the importance of hiring and retaining a happy, productive workforce. Achieving this without a proven HR solution is almost impossible.
Companies are catching on. According to Bersin & Associates, the employee assessment market, now worth about $2 billion overall, grew by 15 percent last year. Any company with forty-plus employees in the same role that also has its eye on the bottom line should add pre-employment screening technology. Before making a decision, consider these five fundamental components.
Create a Better Organization
First, using employment testing technology should create a better organization with higher employee retention, improved employee performance and better processes.
Cash America, an international financial services company that studied its hire-termination trends over a two-year period, conservatively calculated the direct and indirect costs for replacing a store manager at $10,000 each and around $2,500 for each customer service representative. The study, consisting of data on 3,248 employees, documented 43 percent employee turnover reduction in managerial positions after implementing assessment technology.
Look for assessment technology with proven employee retention improvement. Any company with thousands of employees will save millions of dollars over time with this rate of turnover reduction. As with Cash America, companies will lower direct and indirect turnover costs -- from job posting costs and the time devoted to interviewing candidates to downtime that translates to lost opportunities while positions sit vacant.
Pre-employment testing technology should improve processes to streamline hiring workflow. By integrating HR systems such as applicant tracking, background checks, performance management and payroll, organizations will have a seamless information flow from one system to another creating a smooth, user friendly employee recruiting process that meets people-flow needs.
Proven to Predict Employee Performance
Better performance results from improving incumbents and selecting better people. Statistically reliable and valid assessment software modeled after actual performance data helps select those with the greatest potential to perform well in the role. An assessment's reliability focuses on response consistency, but not accuracy. For example, an assessment test with several similar questions phrased with slight differences yields similar answers. If someone takes an assessment and takes it again later, the results should be similar. Validity is the other vital component to measuring employee performance predictability. Focus evaluation efforts on the volume of studies, types of roles and study sample sizes.
Catalyst for Continuous Workforce Improvement
To remain competitive, companies should see continuous workforce improvement from divisions to individual performers, the building blocks of entire structures. Assessment tools capturing better data helps build a workforce more aligned with desired business performance goals. Eventually, one component improves the other, fueling an ongoing cycle of continuous improvement.
Assessment technology that helps leaders understand individual performance provides a clear picture surrounding a position's objectives and desired outcomes. Companies excel at monitoring and tracking performance at the company, region and group levels, but not at individual levels. Without solid individual job performance, companies are unable to evaluate individuals' effectiveness. Individual performance numbers not only define company culture and success, but also provide the critical link between behaviors and performance when an assessment tool is introduced.
Focuses on Fit: More Isn't Always Best
Only evaluate employee assessments that measure a large group of behavioral characteristics and offer flexibility in specifying the optimal amount of each characteristic an ideal candidate would possess to succeed in the target job. How long would a brilliant person stay in a non-thinking, repetitive job? Assessments typically measure a collection of characteristics. Many people incorrectly assume it's better to base hiring decisions on the higher side of a characteristic furthering the more-is-better method.
More than a Score
An assessment's usefulness goes far beyond a simple candidate rating. While overall scores are helpful when sorting and narrowing down candidates, the real value comes from using rich information gathered to enhance interviewing and onboarding, determine future career paths and drive long-term employee development programs.
A quality assessment can produce targeted interview questions to facilitate discussions around position specifics. Questions also help ensure interview process consistency, maximize time with the candidate and provide a better understanding of candidates' strengths and opportunities in relation to specific positions.
Strategic companies hire not only for the immediate need but also determine each employee's viability for future positions. By scientifically examining the relationship between performance data and assessment characteristic scores, assessment technology helps with planning and solves one of the biggest hindrances to creating a quality coaching and development program.
If an HR solution falls short on one or more of these principals, keep shopping. The effort will ensure maximum improvement across the organization.
Dr. Jason E. Taylor is the Chief Science Officer at PeopleAnswers Inc. Following a successful college football career and coaching stint at Division I and II universities, Taylor refocused his coaching and recruiting passion from the football field to the world of talent assessments in business. Since receiving his Ph.D. from Texas A&M University, Dr. Taylor has pioneered the development of several assessment technologies since the late 1990s. His research on web-based selection systems has been published within the scientific community. His historical perspective, expertise, and track record of delivering bottom-line results to organizations further establishes his credibility as the foremost thought leader in the development, implementation, and validation of behaviorally-based selection and development tools. For more information, visit www.peopleanswers.com.
from HRO Today Staff
by Jason Taylor, Ph.D., Chief Science Officer for PeopleAnswers
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