recruitment

How Data-Driven Recruitment Ensures Business Growth

15/01/2021
11 minutes read

How organizations assess candidates regarding hiring decisions differs greatly. What we see more often than not is the use of a generic checklist of requirements and the reliance on gut feeling.

The problem with intuition

Using superficial assessment methods is understandable at first glance. It is easy and feels right to rely on your own intuition. 

The problem? Research shows that too often, decisions are made on first impressions, confirmation- as well as similarity bias and not actual facts. “Felt” decisions are not supported by proof and have shown to offer little to no assurance or return on investment in the long run. The good news is that hiring decisions do not have to be made like this. By incorporating a reliable, data-proven method of assessment, you will have the assurance that the selected candidate is the right fit. Data-driven recruitment has also been shown to increase the retention rate of a company’s employees and general performance regarding business objectives.

 

Two men in an interview

Why you should use personality and ability tests

Using personality or ability tests can be a complex and even controversial topic. As a company, if you have little knowledge about the benefits of using them, you might even wonder if companies should care about assessing ability or personality at all. Doesn’t a CV, interview and quick reference check already tell you everything you need to know? Unfortunately not. Image the following scenario:

Your new hire, Jon, walks into your office after a few months on the job. Jon says that he doesn’t believe he is the right fit for the company’s working culture, nor the tasks at hand. You are taken completely by surprise when he says that he has decided to seek employment elsewhere. How could this happen? You read his CV thoroughly, prepped relevant and tailored interview questions, and even called all of their references to make sure that this candidate was right for this position. As Jon explains why he is moving on to the new opportunities, you sit and think – what happened?

If you are a hiring manager, this scenario might be all too familiar, and with good reason. Relying solely on CVs, interviews, and reference checks may seem like a thorough recruitment strategy, but the reality is that they are inherently subjective in nature. A CV is written from the candidate’s perspective and might not be an objectively accurate or concrete enough representation of their abilities. Your perception of a candidate in an interview can be overshadowed by bias or first impression likability. Checking with references might give you a testimonial of someone’s experience with a candidate, but again - this testimonial is entirely subjective and the people giving the references are chosen by the candidate.

There is of course always parts of the truth in the information you will gather using these methods. But when it comes to making informed business decisions, we should always strive for the whole picture. Therefore, the objective approach of data-driven recruitment through personality and ability tests is an integral part of assessing the right candidate. Not only for the position you are hiring for, but also your company’s culture. The tests can assess and predict future work performance in an objective way and lead to a more thorough, reliable candidate assessment. This applies to both employees and leaders. But how do these tests and their evaluation work?

In recent years, researchers have used cumulative research findings on the validity of predictors of job performance to create and test theories of job performance. These theories are now shedding light on the psychological processes that underlie observed predictive validity and are advancing basic understanding of human competence in the workplace.

- Schmidt & Hunter 1998

 

AbilityTest

Ability Tests

Many companies express their concerns over declining employee productivity and retention rates. The problem could be that employees are suffering from low morale; but maybe, the problem started much earlier. The truth of the matter is that many organizations spend too little time understanding what competencies they need to drive growth, and even less time on understanding how to measure these competencies. Thankfully, assessing the general mental (c)ability (GMA) of a candidate can provide some clarity around these issues.

GMA is a term used to describe the level at which an individual learns, understands instructions and solves problems. Tests of general mental ability include scales that measure specific constructs such as verbal, numerical and spatial ability. The overall score is considered the most important factor, explaining more variation in individual performance than specific abilities.

General mental ability has been found to be the single best predictor of job performance across all organisations and positions; it accounts for approximately 29% of the variance in job performance. Studies have found that people with higher general mental ability acquire more job knowledge and faster, leading to better employee performance. Not only do objective assessments of general mental ability significantly improve hiring decisions, staff retention and productivity, but they are also straightforward to implement. The GMA tests built by our partner Aon are based on many years of psychological research and have been split into smaller, customised fractions that are relevant for work performance.

Personality Tests

Based on the “Big Five” (also known as the five-factor model), personality tests are an honest representation of the candidate’s personality traits as well as an assessment of the candidate’s compatibility with the company and position. When candidates take a personality test, they are scored along different attributes, such as conscientiousness or creativity. If you are worried that these tests might disqualify candidates who don’t love coffee-break small talk, fear not. There is no right or wrong answer in a personality assessment. Rather, these scores can be used to guide interview questions and uncover the innate characteristics of an individual that cannot be captured on a CV.

 

Happy Employee

Aptitude Tests

You might know aptitude tests as cases or work sample tests. Aptitude tests are based on the premise that the best predictor of future behavior is observed behavior under similar situations. These tests require the candidate to perform tasks similar to those that they would perform on the job. As a recruiter, it is important to clearly define what key attributes and skills you are looking for in candidates. This will help you select an aptitude test that benefits both the organization and the candidate. 

The candidates’ test results are summarized in a report based on the competencies chosen as important for the specific position. This summary contains an interview guide with predefined and follow-up questions, as well as hypotheses on the candidate. The result? A structured, competency-based interview in which all candidates are treated fairly and only measured along the actual personality traits needed for the job. The provided test results and report enable us to predict the candidate’s fit with your company as well as their job performance almost to a T.

“All of us are biased in one way or another, and this is natural as we have different experiences, backgrounds and point-of-views. However, this can be costly when hiring, as a wrong hire can require a lot of resources and time from your team and you. So when we know that we are biased, and that this can be costly and unfortunate for the team, why not use one or two methods that are scientifically proven to be more predictive looking at future job performance?  Doing a thorough job analysis as well as utilising a scientifically proven method such as ability tests and/or work sample cases will help you be more objective, unbiased and make data-driven decisions that can save your company a lot of money and put less strain on your current employees.”

- Tina, Head of Assessment

Avoid bias and ensure a fair recruitment process through data

Besides the clear picture these tests paint regarding candidate and company compatibility, data-driven recruitment ensures a fair and objective process for candidates. To lead a fair selection process, it is best to use data as it is objective, unbiased and does not discriminate. This is incredibly important if you want to avoid the latter. Discrimination - both conscious and unconscious - is shockingly common in hiring processes. If you want to be unbiased and actually make a reliable and informed decision instead of "guessing" who to hire, data-driven recruitment is the (only) way to go.

Relying on feelings instead of data can also lead to missing out on a great hire. Studies have shown that people are very likely to give out second chances to candidates they like or that are conventionally attractive, overlooking their flaws, or even attributing positive traits to them that they do not actually possess. This means you might decide on someone simply because you like them, not because they are the right one for the position. Your company's employee retention rate will ultimately suffer and so will its finances, culture, etc. Meanwhile, the candidate that was actually the ideal hire was overlooked because he or she may have seemed less likable in your first impressions of them.

 

Group Meeting

A data-driven methodology is a structured recruitment process

Additionally, being data-driven is advantageous for your structure. Having a clear idea what you are looking for, assessing sourced candidates, and leading an informative interview is the key to saving you and the candidates time and resources. Without a structure, you might spend three times the amount of time you actually need to hire for one position. With a structure, however, you are able to have multiple recruitment processes running at the same time, decreasing the time needed to hire a single candidate. Even if you do not outsource your recruitment efforts, bringing structure into your recruitment process is the first thing you should do.

If you opt for in-house recruiting, we have collected 4 improvement tips that you will be able to implement in just a few days, or even right away:

1. Conduct a proper job analysis. Conduct a proper analysis of what competency gap needs to be filled within your company, which skills you need now and in the near future, what the role is supposed to accomplish and which skills are needed to do this job. If you have a clear definition of the ideal candidate, it will be so much easier for you to tailor the job ad , as well as your interview questions later. The next step is creating your candidate persona from that job analysis. This will help you attract the right candidates for the position and sort out potential mis-hires.

2. Choose the right method. Even if you decide not to outsource your recruitment efforts and go with a data-driven process led by specialists, using scientifically proven methods is still the best way to reduce the risk of mis-hires. In the end, having a method means nothing unless you decide on a procedure for accomplishing something, preferably in a systematic or established way. For us, this is data-driven recruitment using personality and ability tests, a scorebox as well as (technical) cases and structured interviews. If you are going to invest in only one method, ability tests have the biggest predictive validity. So, we would always go for that as the safest bet. However, if you do not want to use tests, structured interviews and a good case for candidates to work on can take you a long way. As elaborated above, this might not be particularly effective or reliable. However, having any kind of method in recruitment is better than having none at all. 

3. Structure your process. This goes hand in hand with having a method, but recruiting for one or multiple positions is a project, and like any project, recruitment needs to be managed. Make sure you measure the same aspects throughout the process, set the number of touchpoints with the candidates and establish when and where you are going to do the tests and/or case. Additionally, identify those involved and set milestones and deadlines.

4. Treat your candidates right. This should go without saying, but unfortunately, we see mismanaged candidate experiences too often. Valuing the candidates' time and effort is essential when it comes to  maintaining professionalism, structure and fairness in your recruitment process. This means being transparent, following up with them in a timely fashion, and giving them feedback. This not only applies to the candidates that make it to the final round or the candidate that ultimately gets selected - it applies to everyone. If someone took the time to read your job description, update their CV, and fill out your application form, you can take the time to send them a quick rejection email should they not fit your criteria. Brownie points if down the line you do it with a quick phone call; standing ovation if you take the time to explain your decision by giving them constructive feedback. This shows respect and professionalism, will encourage rejected candidates to apply again in the future (maybe even spreading words of positivity about your company in their network), and immensely strengthen your employer brand.

 

Reviewing Data

Rely on data, save resources and scale your business

The validity of the personnel measure (or combination of measures) used in hiring is directly proportional to the practical value of the method--whether measured in dollar value of increased output or percentage of increase in output. In economic terms, the gains from increasing the validity of hiring methods can amount over time to literally millions of dollars. However, this can be viewed from the opposite point of view: By using selection methods with low validity, an organization can lose millions of dollars in reduced production.

- (Schmidt & Hunter 1998)

Data-driven recruitment might feel counterintuitive at first. But having a data-driven recruitment process enables you to make informed decisions based on reliable data, reducing the chance of a mis-hire to a very low percentage. Your hiring process will be objective and fair, eliminating bias and unnecessary subjectivity. You will have a clear structure in sourcing, assessing and choosing candidates, making the process more effective (and enjoyable) for you and the candidates. All these aspects ensure a high retention rate within your company, a great reputation as an employer and the right employees to build your company's success. In turn, you will save an immense amount of time and resources by ultimately lowering the cost of a mis-hire and scale your business through the right fit.

If you need further help in assessing how data-driven recruitment can help you and your business scale, or if you would like to have a conversation with one of our consultants, feel free to go ahead and fill out this form.

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