If a company hires the wrong person, it can be a costly mistake. A recent hiring software update seeks to elevate the science of this process.
The cost of a bad hire can be a steep price to pay, especially for a brokerage that brings in a producer who doesn't sell. In 2017, employers lost an average of $14,900 by making the wrong choice, according to a new Harris Poll of 2,257 hiring managers and HR professionals for CareerBuilder. Ten-percent of the respondents said they lacked adequate tools to find the right candidate.
Mike Zani, CEO of The Predictive Index (PI), says Corporate America is “absolutely terrible at hiring.” As many as 80% of external hires are deemed not the right fit for an organization, he adds.
PI, a workforce assessment company, recently updated its Crescendo hiring software to help remedy this situation. The chief objective is to quickly match a job candidate’s behavioral drives and cognitive ability to a position’s requirements. Other capabilities include efficiently administering behavioral and cognitive assessments, and referencing 17 behavioral profiles.
Zani says it’s complicated to teach people science because humans are complicated and essentially don’t come with instructions. “People don’t want to learn the science or apply the assessments,” Zani explains. “They want the tools to do some heavy lifting.”
The trouble is that employers are “relying on the lowest predictors of workplace performance,” Zani says. They include a focus on education and the duration of completing degrees, as well as resumes, tenure in roles and an unstructured interview process.
Some research shows that minds are made up in the first five minutes of a job interview, he adds, while decisions could turn on whether a candidate arrived on time, made eye contact, shook hands with confidence or wore clothes that made an impression.
From art to science
Referencing the need for a paradigm shift from inexact art to solid science, Zani recommends machine-based suggestions to assess new hires, given that the top two predictors of workplace performance are cognitive capability and behavioral fit for a role. He says HR departments need to use “scientifically validated, commercially available data that is incredibly scalable.”
PI has added 60 certified partners in the past two and a half years who consult predominately in the small and midsize business market. “There is absolutely enough economic revenue sharing that they can build very profitable practice areas around this piece of business,” Zani says.
One of those partners is John Hopkins, who runs a growth coaching platform called Inspirit Growth. Recruiting and retaining top talent takes on even greater importance among his clientele of closely held companies original owners don’t have the luxury of making hiring errors. “If they lose a person, it really hurts,” he says.
What PI has done is unlock data from 25 million of its surveys taken over the past 60 years that offers game-changing information and insight, Hopkins says, particularly for his clients. While PI’s Crescendo is clearly a people-related product, he says it’s also a business-results tool.
“If I’m a producer or broker, I want to continue to strengthen my relationships and deepen customer loyalty beyond what I’m just selling,” Hopkins says. One such way is to find the right resources to help employer clients improve recruitment and retention, which he believes demonstrates they’re genuinely “thinking about the welfare of that company.”
Three decent-sized employee benefit companies he serves that also use PI’s services are “getting this in front of their customers because they want to be differentiators,” he says. Hopkins notes that a movement is afoot across the industry, referencing the evolution of ADP and PayPal from large payroll companies to strategic human capital technology players.
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