Drilling for Good Candidates

The current low unemployment rates and data mining have led to companies tossing out wider and wider nets to fill positions.  But, is all of this confusing activity with productivity?

This article (thanks to Dennis Adsit for bringing it to my attention) brings up some great reminders about some very solid things that employers should be doing (valid testing, structured interviews, etc.) and avoiding others (tech is NOT a magic bullet for recruitment and selection).  However, it also does a good job of challenging some basic assumptions about hiring, all of which can be evaluated.  These include:

  • Unless you are adding positions, why are you looking for so many outside candidates? One reason people leave companies is because they do not feel they have promotional opportunities.  One reason you are looking for so many outside candidates is that people quit.  Chicken, meet egg.
  • Taken a step further, HR really needs to test the effectiveness of its processes on an ongoing basis. If there is data to support that, in general, outside candidates perform better than those promoted, then keep on searching for them.  And you should probably revamp your entry level recruitment and hiring processes.  If not, then career development and taking steps to increase internal mobility will be more effective actions than scouring the universe of passive candidates for new hires.
  • Develop measures to evaluate the success of what you are doing. Few things frustrate me more than a client saying, “We cannot measure someone’s individual performance.”  Really? Does that mean the cost of turnover is the only reason you keep people in their jobs? Granted, it can take some time to measure output, but you can typically find ways of evaluating a person’s contribution to a team.  If a manager says, “I like/don’t think this person is effective” she should be able to say why.
  • Related to the above, don’t assume that a good process will always have the same effectiveness. As your business changes, recruiting and selection systems need to adapt as well.

I do not think that HR has to constantly be reinvented.  But, basic assumptions should occasionally be challenged.  It is only by measuring and evaluating our processes that we can truly improve them.

Finding Talent in Nooks and Crannies

Low unemployment is great for the economy (rising wages!), but challenging for employers (higher quit rates and a smaller available talent pool).  This can lead to many creative recruiting strategies and looking at (relatively) untapped sources.  I came across two not-so-new ideas around this recently.

 

One is the idea of returnship—these are programs designed for people (primarily women) with white collar education and skills to transition them back into the workforce after raising their families.  These are initially short term job tryouts (like an internship).  I do find the idea somewhat patronizing in that it seems like companies that use it are saying, “We’ll let you take baby-steps (pun intended) back into the workforce and we’ll see if you’re ready.”  It seems exploitative of returning workers’ self-confidence and makes them compete (again) to get jobs that they have already shown they can do.  Having said that, companies that use the program are providing opportunities for a very talented pool of candidates.  The programs are VERY selective, so it is not surprising that more than half (but not always 100%)  of those who are chosen to participate transition to full time positions.

The other is providing job training for older workers.  I’ve written about ageism in recruitment and selection before and the problem is not getting any better.  This article outlines the pros and cons around re-training older workers.  Of course, part of the issue is that companies will force out older (more expensive) workers while they are still productive, and then the employer finds that they are missing important skills. Where the article misses the point is that if given a choice between hiring skilled people or retraining employees (of any age), hiring good talent is less expensive.  With so many skilled older workers available, companies with talent shortages (and not just McDonalds) would be wise to recruit from this talent pool.

Creativity often comes when we are faced with a dwindling resource, no matter how temporary.  Creating paths for working parents to come back to the workplace and retaining skilled older workers should always be part of HR’s recruitment and retention strategies.  Now is as good of a time as any to implement them.

Reducing Bias Through Structure

Finding examples of racial or gender bias in hiring or job evaluations is not hard.  The latest comes from a survey of lawyers.  My sense is that the results did not come from a random sample of attorneys, so I would not quote the group differences as gospel.  The authors recommended some specific ways that law firms and companies that hire lawyers can correct the bias in their HR processes.  There were two things I took from the study:

  • Many, but not all, of the recommendations came from a solid research base. It was good to see that their hiring suggestions included behaviorally based interviews, skills based assessments, and using behavioral definitions of culture.  Each of these suggestions introduces objectively and structure into the hiring process.
  • Given that attorneys have either brought employment lawsuits or have had to defend companies against them since 1964, did it really take this long to come up with some hiring process recommendations?

My consulting experience tells me that people who hire for professional jobs seem to think there is more magic and intuition in selection than those who staff for other types of positions.  This is especially true when hiring for a job they used to have.  They could not be more wrong.  Every job has a set of critical skills and abilities required to do it well.  It is possible to objectively measure these in candidates.  Doing so will likely reduce bias.

Adapting to Changes in Job Duties

I wrote a couple of months ago about how McDonald’s is changing the cognitive requirements of some of its jobs by adding channels for customers to order food. I argued that such a development should get them thinking about who they hire and how they train new employees.

If you have recently wandered into one of their stores, you probably noticed that, if it is not too busy, a McDonald’s employee may bring you your order. OK, this is not particularly revolutionary. But, to quote a franchisee in an article, “We’re bringing the employees from behind the counter out front to engage, in a more personal way, with our customers.” Maybe I am making more out of this particular example than it warrants, but this strikes me a really upping the customer service requirements of a McDonald’s employee. And I am guessing that a fair amount of the employees are not going to meet it. It’s just not what they signed up for.

This is not about whether McDonald’s employees are capable of providing the additional service or whether their ability to do it well affects the customer experience and/or sales. Rather, it appears to be an example of company changing job requirements and then assuming that people hired using a process that does not account for the new skills will be able to carry out the new duties.

Changing skills requirements is a good thing. It shows adaptation to technology and customer needs and makes the work experience more interesting for people in repetitive jobs. But, companies cannot assume that the incumbents can magically adapt without training and revised performance expectations.

This change also requires updating validation selection processes. Whether it means increasing the weight given to certain aspects or validating a new test, we must adapt our workforce to new job requirements on the front end. As jobs change, hiring practices should as well.

Technology and customers are big drivers of change in the skills, abilities, and personality characteristics required of employees. Smart companies not only redesign work to account for this, but they also update how they train and hire to help their workforce adapt.

Selection When There Are More Jobs Than People

As the economy adds new jobs, some sectors are having a problem finding enough workers for them, including construction. This is regardless of the pay and benefits associated with the jobs. However, the same is true in other blue-collar sectors. This is not a shock to those of you who have been trying to hire people for these types of positions in companies that were not hit by the great recession. For instance, utility companies have been having a difficult time recruiting lineman (sic) for years, and these jobs pay into the six-figures will full benefits.

While the reasons for the hiring shortage are numerous (“You can’t pay me enough to do that kind of work,” “I’d rather work in tech,” “I want to set my own hours,” etc.), these businesses do have a significant challenge. There are some things that you cannot use technology to replace (yet).

In this situation, HR should take the long view. With low unemployment, it’s unlikely that you can just hire your way out this. The labor pool won’t support it. Rather, companies need to engage with high schools and trade colleges to develop candidates. But, they also need to promote and market these jobs in a way that will make them more appealing because right now. This is because many more young people (and their parents) would rather code than swing a hammer.

To avoid the expense of high turnover when hiring for these positions, companies need to do a very good job of validating good selection tools with tenure in mind (as well as performance). They include:

1) Modified versions of Interest inventories (what are someone’s likes and dislikes).

2) Biographical information (do candidates enjoy physically difficult hobbies) surveys (also known as biodata) are very useful ways to determine whether a person is likely to stay in a specific area of work.

I have had good success in validating these for hard to fill positions in manufacturing. This is especially true where giving physical ability tests are either expensive, have a risk of injury, or may lead to high levels of adverse impact against women.

These companies also need to embrace the investment in training and accelerating wages as new hires gain more skills. I have seen this put to effective use in reducing turnover.

There will not be a silver-bullet for creating enough workers for physically demanding jobs in the near term. However, employers who think long term may find viable solutions that will serve them well.

Is College Recruiting Ageist?

When we hear about age discrimination employment lawsuits, they are typically centered on older workers being let go when a company reorganizes so that less expensive (e.g., younger) employees are retained. Of course more subtle examples of ageism are present in workplaces and we need to be as aware of them as we are of bias against women, the LGBTQ+ community, and racial minorities.

Recently, the US District Court in California allowed an age discrimination case to proceed as a class action. As summarized here, the plaintiffs claim that the company used only college recruiting to bring on entry level hires, hence discriminating against potential hires who were not in college (re: people of 40). As evidence, they present that web postings of the positions only appeared through college recruiting sites and not on their regular career site and that resumes from older workers were regularly rejected. They also argue that the company has a general culture which values younger workers over older ones. The company counters these arguments by saying their process is merit-based and that given the number of candidates who apply, using the current process makes business sense.

There are several aspects of this case which are interesting and instructive:

1) There is nothing inherently wrong with college recruiting, especially for entry level jobs. However, if this is the ONLY way a person can get into the pipeline, by definition you are primarily looking at candidates in their 20s.

2) It shows a presumption that older workers will not take entry level positions. That may be true in some situations, but it is really up to the job candidate to make that determination. If an entry level job pays well relative to the experience necessary, why wouldn’t an older worker take it?

3) Like many class action suits, the statistical data will be a key point in determining if there was adverse impact against those age 40 and older. If, as the company claims, only 3% of college candidates get hired (I can see a huge legal argument about who was an applicant and how many there were), the plaintiffs will have to show that fewer than 2.4% of older candidates (again, a fight over who were actually applicants) were hired for the positions. That seems like a pretty low bar to get over.

4) The company’s second argument that college recruiting is efficient, therefore is OK even if it does discriminate (which they argue it does not), will be a tough one to make. Civil rights laws allow neutral selection techniques to have adverse impact if they are job related, but make no exclusions based on expense. I honestly do not see how this is relevant to the complaint.

This case will take years to wind its way through the courts. However, it does provide a timely reminder to review recruiting processes and valid selection tools for adverse impact based on age and not only race and gender. College recruiting is not in and of itself ageist, but you will want to be sure that it is not the only point of entry into your company.

Should Employers Embrace the Push for GEDs?

The U.S. has a lot of people who do not get a high school diploma. This can lead to significant barriers in employment and future opportunities in college. As a result, in 2013, over 500,000 people took and passed a high school equivalency exam (GED). This was a 20% increase over 2012. The Bureau of Labor Statistics accepts a diploma and GED as being the same. But, should employers?

The idea behind the GED is that some people are unable to complete high school for a variety of reasons and by passing the test they show that they have acquired the same amount of knowledge. That may be true, but there is little high school knowledge, except perhaps some math, that employers find valuable. What is valuable is the skill of being able to navigate something for 4 years. But, you don’t have to take my word for it. This report outlines in detail that the career and economic trajectories for those with a GED more closely resemble high school dropouts without a GED than those who complete high school. From a public policy perspective, this leads me to believe that that the proponents of the test are selling snake oil.

Employers should strongly consider this in their applications. Why? Because there may be economic consequences of treating a GED and a high school diploma the same way. In working with a client to validate ways to help them reduce turnover, we looked at the retention rates by education level for entry level positions. What we found was that after 12 months, the retention rate of those with a high school diploma compared to those with a GED 80% vs 65%. After 24 months the retention rates were 68% vs 50%. At a hiring rate of about 1000 per year and a cost of hire a bit more than $5k per person, these are significant differences. After checking with some colleagues, these results are not unusual.

The overall picture shows that employers should not be treating those with GEDs like those with high school diplomas. Rather, you should validate the impact of education level against turnover or performance as evaluate it accordingly in your application, biodata, or training and experience scoring process.

Mentoring For Turnover

This is an interesting time of the year in college football in the U.S., and not just because the final games are about to be played. As head coaches who had a poor year get fired (what should constitute the criteria for firing a college football coach is a topic for another blog), schools have begun looking for their next head coach. In some, but not many, cases an assistant who reported to the fired coach will get the job. In others, a head coach from another school will be head hunted. But, the most common instance is when an assistant from another school is hired. That is as if you wanted to hire a new vice-president of your company and you felt that the best candidates were directors at other firms. Why does this happen?

Part is that the athletic directors (those responsible for hiring the new coach) feel that the failure that led to the coach getting fired belongs to the assistant coaches as well. It is hard for them to go to their stakeholders and say, “We had a really bad season, but we think that one of our assistants is a diamond in the rough.” Note that some schools will groom a successor to the head coach when there is a retirement time frame set.

Picking head coaches from other schools typically involves a bigger school (read: one with a larger budget for salaries, practice facilities, etc.) poaching a successful coach from a smaller one. Think of this as an executive doing well at a competitor with less revenue and a firm with more sales thinking that s/he is ready to move up.

The last option, hiring an assistant from another school, is an interesting one because it reflects on the culture of coaching. Head coaches are thought of well when their assistants go on to getting better jobs. Most of them feel that part of their job is to mentor their assistants so they can get a better job—either at the current university if the head coach leaves or anywhere else. Unlike in corporate America, where losing top lieutenants is seen as a sign of a toxic culture, a head coach who has assistants move on (and be successful) at other schools is perceived as having a great “coaching tree” and attracts even better talent.

This culture comes from the coaching profession being relatively small (130 schools at the top level and 124 at the next). Even with 7 to 10 assistants for each team, everyone eventually gets to know everyone through movement, conferences, etc. Almost every college head coach got his job after being an assistant at another school (most likely, after being an assistant at several schools), so a head coach knows how big of a deal it is when an assistant gets the call to run a program.

In business, it is not a good thing if your high potentials are getting their big opportunity someplace else. However, what are you doing to ensure that they get meaningful promotions internally? Is a VP rewarded when one of her directors becomes VP in another division? Or, is she seen as someone who can’t keep good talent? If it is the former, she will attract more high potentials (internally and externally).

You can create this kind of culture if you encourage and train your executives to mentor talent. Recognize them publicly when their direct reports move on to better positions so they will be encouraged to continue to nurture talent and high potentials will want to work for them.

Just Give Job Seekers the Information They Need

I’ve written in the past about ensuring that job postings are free from potential discrimination. But, summer is also the time when we think about internships and attracting early career talent. No, this is not going to be a screed about millennials and their work ethic. Rather, I will ask you to consider whether your job postings are appealing to them.

This article encourages employers to be direct, rather than using jargon in their postings. More importantly, and in contrast with the stereotype that younger workers are looking for things that are flashy, the more effective ads had basic information. Apparently, listing things like salary ranges, location, and the company’s mission is important. Who knew?

What is effective in marketing, which is what job postings really are, changes regularly. So, what works now may not work in 12 months. Fortunately, this is a data-rich environment, so there are things you can do to measure the success of your postings:

1) Experiment with language and see which versions attract more interest.

2) Get input from recent hires on the content of the ads. This will help keep you current as to what job seekers in a specific demographic are looking for.

3) Your ATS probably does keyword searches on resumes and your social media likely relies on keywords, perhaps those same ones, to show up in better places on the web. Measure whether those keywords are attracting the people you want to reach.

The message here is really not to get overly cute or overthink job postings for entry level positions or internships. If you are direct and provide the job seeker what s/he is looking for, you are likely to attract more interest.

Higher Minimum Wages and Success in the Hospitality Industry

The state of California and several of its cities have been on the forefront of raising the minimum wage.  The arguments for (people cannot live on the current minimum wage) and against (it will cost jobs because business will need to lay people off) it are familiar.  But now there is some data that makes a very interesting link between quality and the impact of raising wages.

This study looks at the impact of raises in the minimum wage and restaurant employment in the San Francisco Bay Area.  Don’t be fooled by the academic nature of the paper—the authors do a good job of explaining things in English before digging into the math (though you can get another explanation here with an eye towards the political).  The main takeaway from the article is that well run restaurants (in this case, defined by high Yelp ratings) are not impacted by minimum wage hikes.  Crappy restaurants (based on quality, not menu price) saw their already higher closure rate go up with the increases.  So, what does this mean for HR?

  • Well run businesses can absorb higher wages when their competitors cannot. This may mean higher prices (in some instances people will pay for quality) or that these businesses can survive on lower profit margins.  HR can contribute to this through good hiring (brining in people who can deliver high levels of customer service) and training (developing a learning culture) practices.
  • Use data to improve quality. The study shows that online feedback (in this case, Yelp reviews) is strongly correlated with business success.  This customer input should be used to improve service and quality.
  • If we presume that the vast majority of the workers at the restaurants are at minimum wage (as the paper does), this research tells us that paying more is not an indicator of quality or success. If restaurant A is getting a rating of 5 and restaurant B is getting a rating of 3, it is not due to wage differentials.  Rather, it is likely based on the quality of the product and the level of service.  HR may not have much impact on the former, but it certainly does on the latter.

What the paper really tells is that that business can succeed without necessarily being the one that pays the highest wages.  When wages are held constant, hiring the best people from the available labor pool may lead to higher service delivery.  This, in addition to a good product, can keep a business successful, even if wages are forced to go up.

Thanks for coming by!

Please provide this information so we can stay in touch.

CLOSE