Using Analytics to Improve the Hiring Process. Presented by: Matt Betts, Ph.D.

Transcription

1 Using Analytics to Improve the Hiring Process Presented by: Matt Betts, Ph.D.

2 Submitting Questions Q&A icon Questions may be submitted at any time during the presentation. To submit a question: Click on the Question Mark icon (?) on the floating toolbar (as shown at the right). This will open the Q&A window on your system only. Type your question into the small dialog box and click the Send Button.

3 Learning Objectives Current State of HR and Selection High level overview of typical recruitment and selection process Competencies and Selection Tools Development Understand how to build competency models and different selection tools Introducing Multiple Assessment Types Describe different approaches to assessing candidates Practical recommendations and best practices for hiring Key takeaways to implement into hiring process

4 Work Group Speakers Shane Douthitt, PhD Managing Partner Scott Mondore, PhD Managing Partner Hannah Spell, PhD Director of Research and Analytics Matt Betts, PhD Consultant

5 Presenter To stay up-to-date on all our research and presentations, Join our LinkedIn page: Follow us on Matt Betts, Ph.D. Consultant smdhr.com/leadershipteam.html

6 OUR TECHNOLOGY OUR PROCESS YOUR BOTTOM-LINE SMD OVERVIEW: Driving Business Results Through Surveys & Assessments Analytics Based: 4 Steps: Common Outcomes: Links People to Critical Business Outcomes through: Employee Surveys 360 Feedback On-boarding & Exit Surveys Selection Assessment Competency Modeling Prioritization of Key Business Drivers Selection of Improvement Areas Customized Action Items Business-Focused Action Plans Operations Metrics Financial Metrics Customer Satisfaction Patient Satisfaction Turnover / Retention Whatever is most critical to your bottomline

7 SMD Link Rethink Assessment With a foundation in science, all of our tools and solutions work together through SMD Link and connect to your key business outcomes whatever they may be.

8 CURRENT STATE OF HR AND SELECTION COMPETENCIES DEFINING THE HOW APPROACH TO ASSESSMENT CASE STUDY RECOMMENDATIONS

9 Developing Advanced Talent Analytics: Why It Matters to CFOs More mature companies along the talent analytics spectrum employ analytics to gather insights for effective talent decision-making. At these companies, HR has strong credibility in providing data analysis and recommendations to decisions. On the other hand, business leaders at companies at the lowest maturity level typically make talent decisions based on their own experience or judgment, with little data-driven input. Sophisticated analytics teams can evaluate the effectiveness of different recruiting sources, assess the quality of hires, and use pre-hire assessments to select better candidates. Interview with Karen O Leonard, Vice President, Benchmarking & Analytics Research at Bersin by Deloitte Wall Street Journal, Monday January 13, 2014

10 Why HR Analytics? People Investments Analytics Business Outcomes HR Analytics connect employee data to business outcomes HR Analytics prioritize where and how much to invest HR Analytics calculate impact/roi from people investments Why wouldn t organizations invest in HR Analytics???

11 We Have Lots of Data Although many questions can be answered using one data source, more strategic questions often require data from two or more sources

12 Linking People Assessments to Business Outcomes Identifying Critical Drivers of Business Outcomes The linkage analysis will demonstrate the level of impact that each competency, experience, skill, etc. has on individual performance and business outcomes. This allows leaders to focus on the most important competencies, skills, experiences and determine the appropriate level to invest in developing each area. Salesforce Competencies Leadership Competencies Personality Factors Technical Skills/Abilities Hire, train, & reward based on KNOWN drivers of results! Critical Business Outcome (e.g. Sales) Experience Employee Attitudes

13 Typical Approach to Selection Recruiter: Resume screen and phone interview Background check Candidates interviewed by multiple leaders (unstructured interviews) Review the interviewers feedback Decisions based on liking the candidate

14 The Opportunity To discover the competencies, skills, experiences, etc. that drive business outcomes To build a business case based on ROI To be viewed as a strategic partner that drives business results To make people investments based on drivers of results For HR to take the lead in making HR processes business-focused

15 Comprehensive Selection Process Resume/Phone Screen Personality Assessment Behaviorally-based Structured Interview Incorporating these tools can make your hiring process 5 times more effective. Role Play/Simulation 15

16 CURRENT STATE OF HR AND SELECTION COMPETENCIES DEFINING THE HOW APPROACH TO ASSESSMENT CASE STUDY RECOMMENDATIONS

17 Competencies vs. Standards vs. Technical Skills Many Organizations Create Two Distinct Competency Models Competencies: The knowledge, skills, & behaviors required to successfully perform a role Often times specific knowledge and skills are identified for specific jobs or job families Standards of Performance: A set of behavioral expectations for all employees (e.g., Customer Service) Leadership Competencies: A set of behavioral expectations for leaders (e.g., People Developer) Customer Service Competencies Accounting Competencies Managing Accounting Competencies

18 Don t Over-Build Competencies Often times two core competency models will suffice Overall Model for Staff often called Standards of Performance or Behavioral Standards Leadership Model Build specific job or job family competency models for: Positions with many employees in same role or similar role (e.g., customer service rep.) Critical positions (e.g., nurses, sales) Roles with significant turnover

19 Behavioral Standards - Example Accountability Living the Values Professionalism Communication Teamwork Customer Focus Problem Solving Innovation

20 Customer Focus - Example Defined, observable behavior: Uses active listening skills when engaging customers Gains understanding of the customer s expectations and needs Fulfills customer/stakeholder requests in a timely manner Meets or exceeds customer s expectations Confirms satisfaction and invites further interaction Solves the customer s problems

21 Competencies are the Foundation Utilize in selecting new employees Reinforce through communications Tie to reward and recognition opportunities Evaluate competencies as the How or behavioral component of performance management Tie pay to performance through the How assessment in performance management Train to the competencies

22 Defining Competencies Competency Library Behavioral Standards Team Gather input from Subject Matter Experts, staff, leaders, high performers Interviews Focus groups Competency surveys

23 CURRENT STATE OF HR AND SELECTION COMPETENCIES DEFINING THE HOW APPROACH TO ASSESSMENT CASE STUDY RECOMMENDATIONS

24 Predictors of Performance Personality Characteristics Motivational Characteristics Past Experiences Strengths Challenges Potential Derailing Leadership Behaviors Top Drivers Values Environment Preferences Types of Experiences Depth of Experiences Cognitive Ability Competencies Problem Solving Aptitude/Knowledge Functional (e.g., Solution Selling) General (e.g., Teamwork) Technical (e.g., CRM)

25 Behavioral-Based Interviews Proven track record for predicting future performance validity is high Legally defensible Reliability is high Consistency among different interviewers and over time Uses interview questions that elicit descriptions of the candidate s behavior in specific situations: Tell me about a time when you Tell me how you would handle the following situation These questions elicit more descriptions of specific behavior in situations like those on the job

26 Personality Assessment Highly valid assessment of personality fit for key roles in your organization Cost-effective Can be customized to the any role by the organization s leadership Focuses on numerous aspects, including: Adjustment- Stress tolerance; optimism/pessimism Ambition- Expectations for self/others; leader-like tendencies Prudence- Attention to detail and following rules Inquisitive- Visionary vs. implementation-focused approach

27 Hogan Basis Report

28 Assessment Center Candidates participate in Role Plays Role Plays based on competencies relevant to performance on the job One of the most valid approaches to selection Example: Nurse candidate asked to interact with a patient Raters observe nurse candidate react to different patient situations Can also be used to make promotion decisions

29 Simulation Overview Staff Responsiveness to Patient Diet Concern Today you are a Nurse at XYZ Hospital. You have just started your afternoon shift, and have been informed by one of your patients, Mr. Brad Pitt, that his diet is incorrect and has been incorrect through two meals. You are concerned with correcting the problem and reassuring the patient. Your goals: To address the problem with the kitchen. To recover the patient. Be prepared to discuss your long-term plan for correcting the issue with your Nurse Leader.

30 Observation Checklist COMPETENCY & BEHAVIOR CONFLICT MANAGEMENT: Did the candidate take corrective action immediately (i.e., remove the incorrect food)? Was the candidate able to seamlessly handle the heated situation without creating more of a disturbance? PROBLEM SOLVING: Did the candidate ask appropriate questions to identify the cause of the error? Did the candidate work with the kitchen to develop a solution that was acceptable for both parties? SERVICE RECOVERY: Did the candidate inform the patient of the steps taken to address the issue? Did the candidate indicate that he/she would follow-up with the patient at the next meal? Did the candidate manage up the kitchen (i.e., reinforce the kitchen s commitment to excellence)? HOURLY ROUNDING: Did the candidate s follow-up plan include hourly rounding? RELATIONSHIP BUILDING/FLEXIBILITY: Did the candidate demonstrate compassion, patience, and respect in communications? Y/N

31 Sample Structured Selection Process Initial Screen (Hurdle 1) Personality Inventory (Hurdle 2) Structured Interview (Hurdle 3) Assessment Center with Structured Role Play (Final Hurdle) Delivered to Hiring Manager/HR 30 minute screen to discuss fit, the roll, job expectations & provide a realistic job preview Completed online by job candidate Provides assessment of several personality dimensions; results indicate candidate level of fit with the job 1-hour interview conducted by Hiring Manager Focuses on specific behaviors and competencies required for the role 1-hour role play of 4 different sales meetings Rating guide provided to assess performance

32 Selection Options Importance of Multi-Assessment Approach Validity Coefficient Potential Number of Poor Hires Unstructured Interviews.10 32/70 Behavior-based Structured Interviews Multiple Hurdle Approach (e.g., Personality testing followed by a Structured Interview).40 21/ /70 Assessment Center.70 11/70 Assessment Center psychologists assessing candidates.85 5/70 *Validity coefficients are estimated based on client and meta-analysis research.

33 Expected ROI $50,000 turnover cost per nurse Assumptions: not including any safety risks of poor nurse performance Approach Potential Number of Poor Hires Unstructured Interviews 32/70 Behavior-based Structured Interviews Expected Savings 21/70 $550K BBI and Personality Assessment 16/70 $800K Assessment Center 11/70 $1.05 million Assessment Center psychologists assessing candidates 5/70 $1.35 million

34 Selection Approaches Behavior-based Structured Interviews Approach Pro s Con s Multiple Hurdle Approach (e.g., Personality testing followed by a Structured Interview) Assessment Center Cost effective Speed to develop and implement Incremental effectiveness over interview only approach Hurdle reduces number of interviews required Most effective Senior leader participation and buy-in Strong development component for participants Requires interviewing all minimum requirement applicants Face validity of testing hurdle Most expensive option Time required to develop and implement

35 Obstacles on the Front-line Pushback against adding structure in the hiring process is not new Key opportunities to overcome pushback: Training on conducting structured interviews Easy, practical tools that help hiring managers: Build out customized interviews based on relevant competencies Manage multiple candidates Simple reporting to make valid, data-based hiring decisions

36 CURRENT STATE OF HR AND SELECTION COMPETENCIES DEFINING THE HOW APPROACH TO ASSESSMENT CASE STUDY RECOMMENDATIONS

37 CASE STUDY: Small Pharmaceutical Company OVERVIEW THE PROBLEM: The company needed to understand which of the knowledge, attitudes, behaviors, and personality traits of their sales force drive new business revenue. THE GOAL: Determine what competencies, motives, and skills drive business outcomes. Use this to make data-driven decisions on future hiring and development.

38 Prioritizing Based on Need and Impact on New Business Revenue

39 Prioritizing at the Behavior-Level New Business Revenue Priority* Competency Planning Sales Process Tools Value Creation Behavior Identifies the partner's known (or potential) strategic business initiatives. Pursues and qualifies potential opportunities identified in the customer / partner account plan. Uses CRM (similar technology) to capture and communicate opportunity status within the sales process. Uses XXX technology (SFDC etc.) effectively to facilitate every phase of the sales process. Identifies the value of solving a business issue in financial terms that are most important to the customer / partner. *Priorities determined based on the magnitude of the relationship with New Business Revenue. Sales Reps that score at an Advanced or Expert Level on these 5 behaviors generate 47% more New Business Revenue than their peers at XXX.

40 Predictors of New Business Revenue 5 Adjustment Prudence Commerce Problem Identification Inquisitive Planning Sales Process Value Creation Consultative Sales Conver New Business Revenue Legend Personality Motivation Competency Aptitude/Knowledge *Higher path values indicate a stronger impact based on a 0.0 to 1.0 scale. Circled numbers indicate the development priority based on the magnitude of the relationship with script writing & market share.

41 Aligning Hiring & Development through Analytics Hiring Profile Development Profile Behavior-Based Interview Personality Assessment Knowledge Assessment Motivation/Values Assessment Planning Sales Process Value Creation Prudence Adjustment Inquisitive Consultative Sales Conver. Problem Identification Commerce Planning Workshop Process & Tool Launch On-Demand Courses Solution Selling Workshop Solution Selling Workshop Planning Sales Process Sales Tools Value Creation Consultative Sales Conversation Problem Identification Sales Reps that score at the 75%tile or better on these behaviors/traits generate 33% more New Business Revenue than their peers.

42 Summary Step 1 Goal Gain a complete picture of what high performance looks like in the given job type and within the context of your organization Step 2 Goal Links competencies to organizational outcomes, prioritizing competencies for development and selection Step 3 Goal Development: Create individual development plans for your team, based on the critical competencies Step 4 Goal Selection: Develop a selection system that hires candidates that have the competencies to succeed on the job and contribute to organizational success

43 CURRENT STATE OF HR AND SELECTION COMPETENCIES DEFINING THE HOW APPROACH TO ASSESSMENT CASE STUDY RECOMMENDATIONS

44 Ask Good Business Questions Recruiting: Which sources produce best future employees? Which labor pools should I focus more time? Did I make a true business case for change/investment? Hiring: Which assessed competencies yield the best hires? Which assessments yield the best hires? Which assessments keep employees here longer? Did I make a true business case to convince front-line managers to follow the structured hiring approach?

45 Recommendation At a minimum, use structured interviews in your process easiest to implement with the biggest ROI Managers may resist convince them with a business case focused on ROI and connection to what matters to them results! Make the process simple and easy to use Once you have a manager on-board, they will be advocates forever Calibrate your pull-through rates don t make the hurdles so difficult that you lose all your candidates

46 Practical Tips The selection process isn t complete when all of the positions have been filled Revalidate the knowledge, skills, abilities, and competencies used in the selection process as well as the components of the selection process itself Determine how well the assessments are predicting performance and/or retention

47 Practical Tips Determine Critical Outcomes: What are the key outcomes/metrics for which the employees who went through the hiring process are now held accountable? Create a Cross-functional data team: Who owns the specific outcomes/metrics for these employees? Assess Outcome Measures: Are the important business data/metrics collected at the appropriate level in this case, at the individual level? Analyze the Data: Are the pre-employment tests and assessment center exercises predicting job performance (i.e., did higher scores during the hiring process lead to better job performance now?) and/or turnover? Build the Program and Execute: Based on the analysis, which hiring process components are more/less important than others? Is there a specific component that is underperforming? Should we enhance, eliminate, or change that component? Measure and Adjust: How do we ensure that the quality of our future hires remains high?

48 Summary 1. Utilize current employee data to determine which assessments, and which factors of those assessments, are the most strongly related to actual performance and turnover. 2. Assess candidates on those factors found to be most critical in successful performance and base hiring decisions on candidate strength in those areas. 3. Apply predictive analytics to validate and adjust the selection program once it has been used to make hiring decisions.

49 Questions and Comments Please use the chat function to submit a question Recorded meeting and PPT deck will be posted to the HR Analytics Work Group website On HR Analytics Work Group LinkedIn page you can ask the group and speakers additional questions after the meeting

50 Next Meeting Making it Practical for Every Leader (Case Study) Presented by Hannah Spell, PhD August 9 th at 1:00pm EST Add to your calendar click here

51 Let s get in touch: Matt Betts, Ph.D. Consultant mbetts@smdhr.com smdhr.com

52 Sources Interview with Karen O Leonard, Vice President, Benchmarking & Analytics Research at Bersin by Deloitte Wall Street Journal, Monday January 13, 2014