You are on page 1of 8

Best Practices in Recruitment

How Science Has Changed the Way Businesses Hire


The ability to accurately predict how well applicants will perform on the job before actually hiring them has long been considered the Holy Grail of hiring.

Kronos Inc. . . . . . . . . . . . . . .S2

2009 Business Outcomes Study Report


Leading companies across the globe have recognized a dramatic impact to their bottom line through the use of talent measurement. In some cases, the result can be in excess of one hundred million dollars, as documented in this report. How did they realize these incredible results?

PreVisor . . . . . . . . . . . . . . . .S3

Death of the Big Board: The Next Generation of Recruiting


As the economy continues to shrink, increased pressure for companies to maximize their resources, time and money has come to the forefront. Recruiting 2.0 has emerged and with it, a whole new generation of best practices.

The RightThing . . . . . . . . . . .S4

Focus on Process to Reduce Your Recruiting Costs


In good times, trimming operational costs is an ongoing goal. In tough times, its a necessity. In both good times and bad, recruiting occurs. Growth increases headcount in good times and opportunistic or replacement hiring happens in a slow business cycle.

Taleo . . . . . . . . . . . . . . . . . . .S5

Learning For the Sustainable Enterprise


Sustainability is now a hot trend, and often it is associated with environmental responsibility. However, the environmental benefit is just one of the positive outcomes of a sustainable approach.

SkillSoft . . . . . . . . . . . . . . . . .S7

PREMIUM SPONSORS

Special Advertising Supplement to Workorce MANAGEMENT

S1

Best Practices in Recruitment

How Science Has Changed the Way Businesses Hire


K RO N O S I N C .

he ability to accurately predict how well applicants will perform on the job before actually hiring them has long been considered the Holy Grail of hiring. And, considering that the most important decision a company makes about an employee is the first onethe decision to hiremanagers have every incentive to select the right candidate each and every time. But predicting performance is just plain hard. In a recent study conducted by the Recruiting Roundtable, companies reported that 50 percent of their hiring decisions turned out to be mistakes.1 Which puts the odds of making a good hire on par with a flip of a coin. The first challenge recruiters face is that, in order to even begin to predict performance, they need to be able to evaluate past performance. But reliable performance data has been typically hard to come by. Or, at least, difficult to interpret. And, because hiring managers dont, as a rule, possess crystal balls, consistent predictions about job performance have remained elusive. Until recently. Enter Selection Science Advances in selection science over the last decade have sparked an evolution in technologies that are proving themselves increasingly effective in helping organizations improve the quality of hireespecially with hourly or frontline employees. So, what is selection science? In brief, selection science is the systematic analysis of key factors that influence job performance. It places a particular emphasis on the development and use of specific metrics that have been shown to accurately predict job-relevant behaviors. The fundamental theory behind this approach is that an applicants underlying personality drives behaviors that result in specific performance outcomes. Psychological research undergirding modern selection science shows that future workplace performance is largely determined by three distinct sets of behavioral and attitudinal criteria: What the candidate has done What the candidate can do What the candidate wants to do

When is Section Science the Right Choice? The application of selection science to pre-employment assessments has proven to be most effective in hiring scenarios where the knowledge or skills associated with a position can often be obtained in a few weeks. And in situations where hiring success is measured in such quantifiable terms as sales per hour, customer service scores, length of employment, and involuntary termination. Jobs of this type are commonly referred to as frontline or hourly workers. Given the sheer size of the frontline workforce (nearly 70 percent of all U.S. workers)and the high churn associated with these positionseven a modest improvement in hiring, retention, and performance could drive hundreds of thousands, even millions of dollars, to an organizations bottom line. An Integrated Approach to Hiring Using standardized web, database, and computing technology, candidate responses from pre-employment assessments can be captured in the form of electronic records that forms the starting point for detailed analysis. After the employee has been on the job for a while (or when theyve left the organization), their initial assessment and application data can be matched to their work history to create a closedloop recordi.e. how current and past employees answered the pre-employment assessments and how they then performed on the job. Well designed hiring software can then compare a new applicants responses with those of current and past employeesenabling it to make predictions about the new candidates future job success. Predictions that rely on statistical probabilities, rather than a hiring managers best guess alone. A Workforce That Improves Over Time Increasing the accuracy of hiring decisions can be accomplished with an integrated approach that brings together the advances in selection science, data analysis techniques and automation. When applied to high-volume hiring environments, the impact to an organization can be significant. Your hiring strategy evolves from being focused simply on minimizing the cost-of-hire to truly improving the overall quality-of-hire. The result? As the quality of hiring improves, important benefits accrue to the organization: hiring managers begin to have more time to coach and develop their workers, instead of managing employee churn, leading to greater employee satisfaction and productivity, cost savings, and, ultimately, profitability.

Although selection science now recognizes all three areas to be important predictors, traditional recruitment has tended to focus on what job applicants have donepast duties and previously acquired skillsto the near exclusion of the other two criteria. Advances in the last 10 to 15 years, however, particularly in the development of effective volitional or want-todo metrics, suggest that future job performance is determined as much by what people want to do as by what they can do or have done.

Half of appointments a mistake, study finds, Institute of Leadership & Management (October 2008)

S2

Special Advertising Supplement to Workorce MANAGEMENT

Best Practices in Recruitment

2009 Business Outcomes Study Report


Talent Measurement ROI: The Documented Impact of Employment Testing
PREVISOR

eading companies across the globe have recognized a dramatic impact to their bottom line through the use of talent measurement. In some cases, the result can be in excess of one hundred million dollars, as documented in this report. How did they realize these incredible results? Through an employment assessment program that enabled them to identify the employees most likely to sell more, produce more, drive higher customer satisfaction, and stay on the job longer.

parts industry, sales associates who earned higher scores on an assessment solution had sales variances that were 9% higher and generated more than $51,000 in annual sales compared to low scorers. Distributed across the entire sales associate workforce, this difference amounts to $137 million annually. An 11% increase in average number of calls handled picks up 18 more productive days per employee each year. In a remote agent position in a call center outsourcer, employees who had earned higher scores on a call center assessment solution handled calls 11% faster, translating into over eight hundred additional calls taken per year. Compared to those earning low scores on the assessment, each high-scoring employee actually contributed eighteen more productive days per year to the organization. For a comprehensive list of all 13 findings, please go to http://www.previsor.com/results/outcome/2009. Employment Testing: The Future State There are several trends emerging in employment testing that are influencing the development and evaluation of assessment solutions. Some of these trends include: More use of computer adaptive testing. Computer adaptive testing (or CAT) is a type of assessment in which test items are drawn from a large pool of questions on the basis of a candidates previous responses. CAT assessments are considered to be more accurate and since candidates do not all receive the same set of questions, these tests are much less vulnerable to cheating. Increasing emphasis on realistic multi-media assessments. Test development efforts are moving increasingly toward high-tech, multi-media simulations that model a day in the life for a given job role. In addition to being more engaging for candidates, these assessments can serve as a realistic job preview by simulating actual job activities. Whole-person assessments on the rise. Whole-person assessments employ a variety of different assessment methods that specifically target those characteristics of the candidate (behavior, ability, skills, and traits) that are most relevant for achieving critical business outcomes. Furthermore, wholeperson assessments have been determined to be more predictive than tests that isolate a single competency.
The above findings and trends are only a sample of those found in this complimentary, comprehensive report. To view this report in its entirety, please visit: http://www.previsor.com/results/outcome/2009.

Using the results of the business outcome study, we were able to calculate a profit gain of roughly $24 million on an investment of just over $100,000.
Michael D. Blair Manager, Recruitment, Selection & Assessment EMBARQ

To meet senior managements increasing need for quantifiable metrics around workforce performance, talent measurement is becoming more sophisticated. Successful organizations understand that recruiting, screening, and placement processes must be linked to sales, revenue, and profit. However, even when great processes are put in place, the quality and success of talent decisions is impacted by the quality of information used to make those decisions. For the third year in a row, this report provides concrete evidence directly connecting employment assessments to specific business outcomes. The findings in this report represent studies that PreVisor completed with client organizations both in the U.S. and globally. These studies represent a wide range of industries and focus on a multitude of job typeshourly, professional, managerial, sales, and customer service. This report summarizes many key business results these companies found, as well as some important trends uncovered through analysis of all the studies. Report Findings In the 2009 report, 33 Business Outcome Studies were conducted for clients across multiple industries, including financial services, telecommunications, retail, and hospitality. Three of the 13 findings from the report are highlighted below. Over $2 million saved annually by reducing repeat trouble call rates. At a cable telecommunications company, broadband technicians who earned higher scores had lower repeat trouble call rates on their service calls, reducing the number of unnecessary service visits and saving the organization an average of $1,450 per year per technician. Across the entire organization, this equates to an annual savings of over $2 million. High-scoring sales force has potential to drive another $137 million annually. In a retail organization in the automotive

Special Advertising Supplement to Workorce MANAGEMENT

S3

Best Practices in Recruitment

Death of the Big Board: The Next Generation of Recruiting


THE RIGHTTHING

s the economy continues to shrink, increased pressure for companies to maximize their resources, time and money has come to the forefront. Recruiting 2.0 has emerged and with it, a whole new generation of best practices. Historically, utilizing big boards to attract candidates seemed to be the best solution as it required little time and initial effort. Today, thats all changing. With an innate need for highly skilled employees, companies are seeking more robust and cost effective ways to attract top talent. Job Boards in Decline The proliferation of big boards in the late 90s brought a revolutionary new way to find and recruit for jobs. They helped to expand candidate pools for recruiters and opened a whole new window of opportunities for candidates. Today however, raised concerns on rising costs, strained resources, and lack of quality are becoming a reality. Big board traffic continues to fall as niche board and social networks gain in popularity. Client data from The RightThing shows a dramatic decrease in the percentage of hires sourced from big boards over the last year. Candidates looking for jobs have grown frustrated with the lack of communication, information and security risks associated with posting their personal information. The proliferation of job board aggregators such as InDeed.com and SimplyHired.com are eliminating the need for candidates to visit individual sites. As recruiting 2.0 evolves, big boards today are becoming what classified ads were to the 80s and 90s. The Rise of Recruitment 2.0 While the war on talent may be at a cease fire, there is still unique pressure to find highly qualified candidates. Best-in-class companies are shifting their focus to direct outreach and passive recruiting initiatives which provide better outcomes with a more cost effective price tag. As Recruitment 2.0 offers refined solutions for the future, the following three initiatives are gaining momentum. Recruitment CRMs Although the nations unemployment rate continues to rise, its vital for todays leading companies to proactively market and continuously connect with potential candidates regardless of hiring plans. Offering a cutting edge, cost effective tool that facilitates better hires, the concept of recruitment CRM is growing in popularity. With relationship building and active outreach one of the only ways to ensure quality, this smart solution makes sense.

By building out a proactive pipeline and initiating continuous communication, companies can essentially build their own exclusive talent pools to dip into on demand. Maximize the benefits of recruitment CRMs: Create and send branded e-mail campaigns Take advantage of lead source tracking features Use automatic ticklers and calendar systems built into software that allows for organized and predetermined outreach initiatives Social Networking With LinkedIn, Twitter, Facebook and more, social networking has proliferated over the past year and will continue to offer rich pools of qualified active and passive candidates. In fact, according to a new study released by Nelson, social networking has overtaken e-mail as the most popular internet activity. In-house data collected from The RightThings clients revealed that social networking was three times more effective in finding candidates than big board sourcing for both exempt and non-exempt positions and is a great way to build both active and passive pipelines. Maximize your social networking strategy: Join industry specific blogs or user groups Always make sure your own information on social networks is up-to-date Devote time each week to expanding your network Deep Web Searches Deep Web search techniques using Boolean logic, X-Ray, flip search and more are also a highly successful and increasingly popular way to identifying passive candidates; however, conducting the search is only the beginning. Its important to note that once a search string is executed, successful deep web searches require time and effort to dig further through results to find the relevant information. Maximize your deep web search: Attend a class to understand how to build effective search strings Take advantage of technology that utilizes automated overnight search options Once candidate is found, use traditional follow through methods to connect As Recruitment 2.0 continues to shape a new generation of talent acquisition tools, resource allocation in employment branding, company value proposition, and online recruitment training will continue to rise. Additionally, recruiting and retaining Gen Y will also play a major factor in the evolution of best practices as will technology innovations and Web 2.0.

S4

Special Advertising Supplement to Workorce MANAGEMENT

Best Practices in Recruitment

Focus on Process to Reduce Your Recruiting Costs


A L I C E S N E L L , V I C E P R E S I D E N T TA L E O R E S E A R C H

n good times, trimming operational costs is an ongoing goal. In tough times, its a necessity. In both good times and bad, recruiting occurs. Growth increases headcount in good times and opportunistic or replacement hiring happens in a slow business cycle. Creative recruiting strategies in tandem with the latest technology developments provide the opportunity to reduce recruiting costs while powering exceptional business results.

Sourcing: External Talent Pool


Strategic recruiting requires identifying and matching people with a given set of skills to a particular job while efficiently allocating sourcing expenditures. Use an eRecruiting system that powers external talent pool management with a candidate relationship database to automate prescreening and candidate matching while communicating with targeted candidates. Candidate relationship management (CRM) can lower sourcing costs by marketing new job opportunities to candidates sourced in the past. By mining the talent pool, each new requisition will not require sourcing a new pool of candidates. Managing and mining the corporate candidate database can reduce sourcing costs per candidate up to 50 percent.

Target Direct Cost Savings


Total recruiting process expenses are the combined sum of external costs and internal labor costs. Most organizations can impact recruiting expenses with direct cost savings. While additional savings on indirect costs can be realized from process improvement and efficiency gains, there are direct cost savings and benefits readily available in three broad areas: sourcing, assessments, and green recruiting.

Assessments: Reduce Turnover Costs


Assessments in recruiting can yield many benefits including better productivity, superior candidate performance results, and lower turnover. Reducing the rate of turnover provides considerable savings. One Taleo customer calculated $2.6M savings by reducing turnover four percent with assessments: 1,300 fewer hires were needed at $2K per hire. Assessments also save recruiter and hiring manager time as they focus on a short-list of qualified candidates. Qualified candidates hired for fit tend to stay with the organizationreducing unwanted, expensive turnoverand produce quality work, driving revenue.

Sourcing: Reduce Agency Costs


Agency search firm fees can cost an organization up to 35 percent of a new employees annual base salary. These fees typically come from the hiring department budget and may not be visible to HR. The use of internal mobility programs, referrals, candidate pipelines, and corporate career websites can reduce or eliminate agency spend. Efficient collaboration when working with agencies should include clear identification of candidates referred, complete access to all candidate information and history, and automatic notification and correspondence. That way you can optimize the value from third-party agency fees.

Green Recruiting: Reduce Paper and Processing Costs


You can reduce recruiting costs by automating the process and also make a green difference starting at the online career site. If the process is automated without paper, candidates know you have taken the proper steps to enable green recruiting. In addition to the reputational benefits, it is possible to calculate direct cost savings. eRecruiting reduces energy use and pollution associated with manufacturing, transporting, and recycling paper products. Process automation also saves energy in mailing, storage, handling, filing, and reporting tasks. Direct cost savings come from reducing paperwork related to resumes, advertising, and onboarding. In addition, Software as a Service (SaaS) eRecruiting software by subscription is greener than purchased software running on local servers that create redundant computing environments for a smaller carbon footprint. Improving the recruiting process through sourcing, assessments, and green recruiting does not just save costs. It also positions the company to improve the talent base during the recession while retaining the ability to grow appropriately in recovery. For more information, read Recruiting: Reducing Direct Costs and Reaping Results available at www.taleo.com from Taleo Research.

Sourcing: Reduce Advertising Costs


You can realize significant cost reductions by placing all job positions on the corporate career website. Youll reap a substantial number of candidates at minimal cost compared to job boards and other sourcing options. Recruitment advertising spend is a common form of maverick spend. Without proper controls, sourcing decisions are made without metrics or analysis. Now, online tracking and reporting delivers insights on sourcing channel performance. You can monitor resume volumes, number of hires, and employee performance by source to strategize on high return sources.

Sourcing: Internal Talent Pool


Internal talent pools provide a way to reduce sourcing and advertising costs while delivering the bonuses of improved productivity and retention. Internal redeployment reduces costs and ramp-up time while increasing retention and employee satisfaction. Internal hires have a dramatically lower time to productivity. The Mellon Learning Curve Research Study found a 50 percent faster time to productivity on average among eight categories of workers. Direct cost savings from internal hires are attained through lower sourcing, signing bonuses, relocation, onboarding, and severance costs.

Special Advertising Supplement to Workorce MANAGEMENT

S5

The online hub for everything and everyone you need to know in

Recruiting & Staffing.


Use the Recruiting & Staffing channel on the workforce.com website as your information hub for finding and managing talent management, 24/7! Get the most current stories, trends, strategies and special reports. Search by subject or company. Get news you might have missed. Find archived in-depth features. Visit the Commerce Center for a list of and information about different segments within the category, such as Assessment & Testing, Background Checks, Candidate Sourcing, Contingent Staffing, Retention, Telecommuting and Workforce Planning. Each directory includes profiles and links to resources and vendors, cutting down on your research time. Access is free, you simply need to register to become a member!

> Go to: workforce.com/staffing

Best Practices in Recruitment

Learning For the Sustainable Enterprise:


How Investment in Learning Drives Long Term Competitive Advantage
SKILLSOFT

ustainability is now a hot trend, and often it is associated with environmental responsibility. However, the environmental benefit is just one of the positive outcomes of a sustainable approach. Sustainability is a strong business principle that simply means to sustain positive results over a longer period, for more stakeholders, while continuously reducing cost and negative impact of various kinds. Seen in this light, sustainability is not such a revolutionary idea. It is simply an expansion of the time-honored approach of doing more with less: producing more beneficial business outcomes (productivity, revenue, customer satisfaction, employee engagement, etc.) for less cost and less negative impact (money, resources, energy waste, etc.). While this may seem a bit idealistic, the recent economic crisis illustrates why it is important to look beyond short-term results and narrow interests. A global recession now looms as a result of an over reliance on short-term strategies and a failure to recognize the interconnectedness of various systems within a global economy. Now that we have seen the domino effect that can occur, there is a new urgency within many organizations to understand their interconnectedness, and how their risks and responsibilities intertwine. Intense global competition is another reason that sustainability has become such an important trend. Competition for resources, natural and human, is intensifying on a global scale. With the rise of developing nations there are expanded market opportunities and also expanded sources of competition. The only way that an organization can achieve sustained competitive advantage is to have a long term strategy. This has spurred many companies recently to develop long term talent management strategies, to ensure that they will have a work force with the right mix of skills to support future growth. Another important by-product of competition in a global economy is the need to constantly innovate. Innovation is essential in a world where unpredictable changes come at us from every direction. Innovation can take the form of small improvements that reduce costs or improve processes in small degrees, or in the form of breakthrough ideas that transform entire markets. In either case, it is people that make the difference. People are the source of innovation; and people are the key to sustainability. It is not surprising then that learning plays an important role in a sustainable strategy and it is very often mentioned in the same breath with sustainable competitive advantage.

provide learning to more employees, at all levels, are better positioned to compete in a global economy. Learning fuels creativity, which in turn drives innovation. Learning also drives higher levels of productivity and engagement. The value of learning is multiplied when properly aligned with critical roles by embedding relevant learning content into existing corporate systems such as portals, Knowledge Centers and talent management systems. Learning also helps companies attract the best people and retain them longer.

Learning Helps Organizations Prepare for the Unexpected


Technology and global markets are increasing the pace of change. Having a learning culture fosters the agility and critical thinking skills that are needed to compete in this fast-paced world. A robust supply of learning resources helps organizations adapt to competitive changes, technology developments and new customer demands. On-demand learning resources can be used to solve unexpected problems as they arise.

With Technology Enabled-learning, Organizations Can Do More for Less


Technology and the Internet have liberated learning from traditional bounds, making it feasible to train more employees wherever they are, at a much lower cost. Online learning can be used alone to ensure basic skills and compliance, and it can be used as part of more complex learning blends to address a wide variety of enterprise needs. Technology is also the key to delivering on-demand learning resources to employees in the flow of work, allowing them to solve problems quickly and efficiently. In short, e-learning, in all its forms, increases the efficiency and effectiveness of enterprise learning, and allows learning to be delivered to many more employees, even in times of budgetary constraint.

Summary
Sustainability is a broad concept that is becoming mainstream in the business world. It is no longer associated solely with environmental benefit, as many organizations are realizing that people are the ultimate renewable resource. An investment in employees pays long term dividends, literally and figuratively. Bringing learning to all levels of the organization, on a broad range of topics, truly unlocks organizational potential. It fosters the agility and critical thinking skills that are essential to competing in a global marketplace. And with the use of technology-enabled learning, organizations can afford to train more employees at lower cost.

Supporting the Sustainable Enterprise


There are three main ways that learning, especially technologyenabled learning, supports the sustainable enterprise.

Learning Maximizes People Value


People are the ultimate renewable resource, and organizations that

Special Advertising Supplement to Workorce MANAGEMENT

S7

For more information on the companies that contributed to this white paper, visit their web sites, or contact them directly at:

KRONOS INC.
297 Billerica Road Chelmsford, MA 01824 Phone: (800) 355-4547 www.kronos.com talentinfo@kronos.com

PREVISOR
14425 Penrose Place Suite 150 Chantilly, VA 20151 Phone: (800) 367-2509 www.previsor.com

THE RIGHTTHING
3401 Technology Drive Findlay, OH 45840 Phone: (866) 788-4464 www.rightthinginc.com

TALEO
4140 Dublin Boulevard Suite 400 Dublin, CA 94568 Phone: (888) 836-3669 www.taleo.com

SKILLSOFT
107 Northeastern Boulevard Nashua, NH 03062 Phone: (603) 324-3000 87-SkillSoft (877) 545-5763 Information@SkillSoft.com

For information on participating in upcoming Best Practice White Papers, contact: Jason Asch, Advertising Sales Director (212) 210-0112 jasch@workforce.com
Irvine Headquarters 4 Executive Circle, Suite 185 Irvine, CA 92614-6791 (949) 255-5340 www.workforce.com

Workorce

M A N A G E M E N T M A N A G E M E N T

S8

MAN A G E M E N T Special Advertising Supplement to Workorce MANAGEMENT