HOW TO ACHIEVE SUCCESS WITH EVIDENCE BASED RECRUITMENT

How insights from data on performance and personality can create business value, save time, and minimize bias in recruitment

Identifying and hiring top talent is not easy

The stakes of wrong hires are high:

  • High employee turnover
  • Low job performance
  • Low productivity
  • Low revenue growth

A recent study from Harvard Business Review concluded that the cost for hiring the wrong employee is over $8000 per day (Menon, T. & Thompson, L. 2016). So how can you reduce volatility in identifying your next best hire, your next high performing team or your next leader? Not an easy question to answer, but HR analytics shows promising results as a mean to create a recruitment strategy closely linked to organizational performance and goals.

Data-driven HR can predict performance

Successful organisations often use data across a variety of areas to empower and optimize their business. Many HR departments are beginning to adopt this approach and use data to predict specific outcomes such as performance, general job satisfaction or turnover already at the recruitment stage.

Evidence shows that personality tests can be powerful predictors of performance, especially when they are carefully matched with KPI’s closely linked to the strategy and success of the company. It opens for the possibility to predict high potential employees early in the recruitment process and quickly select candidates with a good fit to the demands of the job and the needs of the company.

From KPI’s to top drivers of performance

We conducted a study with two leading companies within their line of business to understand how to identify a link between insights about attributes like personality and high performance. One is a leading Nordic supplier in plumbing and electrical tools and equipment, and the other is one of Europe’s leading Hair and Beauty companies.  

Both companies had a goal of improving both the efficiency (e.g. cost per hire), effectiveness (e.g.  accuracy of assessment) and impact of recruitment processes (e.g. increase in productivity).  The study tested the predictive power of existing recruitment practises in relation to identifying a high performer. The Nordic supplier in plumbing and electrical tools and equipment used “percentage of achieved customer meetings” and “profitability based on raw sales and profit margin” as their KPI’s for the study. The Hair and Beauty company used “average income per hour” and “net profit per employee” as their KPI’s for the study. The KPI’s were compared to the employees’ result on OPTO, which is a personality test designed to assess and cover the most important scope of personality for job performance.

Data showed that the chance of identifying and selecting a high performer from a pool of qualified candidates increased from 20% to 60% when based on insights about personality and performance metrics. The graphs show how the use of a set of evidence based personality criteria can qualify strong hiring decisions and improve performance.

Impact of a more evidence based recruitment process at the Nordic supplier in plumbing and electrical tools and equipment

Impact of a more evidence based recruitment process at the Hair and Beauty company

HR analytics and predictive power in recruitment

The study identified which personality traits these high-performing employees had in common, and how using these traits to guide recruitment increases the odds of selecting a high-performer. In other words, identification of the main top drivers of performance related to success. For the Nordic supplier in plumbing and electrical tools and equipment the main top drivers of performance are traits like Efficiency, Resilience, Cooperation and Innovation. Whereas for the Hair and Beauty company it is traits like Resilience, Compliance and Innovation. This knowledge guides the creation of a set of objective job criteria valuable from the early start of the recruitment funnel. The hiring process becomes more efficient all together supporting hiring decisions that meet and even exceed organizational and job requirements.

Hiring decisions made easy

The overall approach to incorporating behavioral insights in recruitment and selection processes enables hiring managers to make more robust hiring decisions, which otherwise can be prone to personal judgement and evaluation bias.

In summary, embracing state-of-the-art assessment technology promises significant results that will impact business outcomes, while saving time and money in the process.

Reference

Menon, T. & Thompson, L. (2016). Putting a Price on People Problems at Work. In HBR, August 23, 2016.

Master International (2016). OPTO Technical Documentation, Criterion-related validity studies.

Louise Bergøe

The journey to improve an organisation through it's employees, starts with recruitment. The more structured and data-driven recruiters can be, the better. Organisational performance depends on hiring right.

Behavioural insights increased the chance of selecting a high performer from 20% to 60%

OPTO case studies - Master International

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