(Editor’s Note: Today’s post is brought to you by our friends at Criteria Corp, a leading provider of pre-employment testing services. They recently launched an app called JobFlare (iOS, FREE) that allows users to play “brain games” that are scientifically created to test the cognitive abilities that are considered the key predictors of job success. Enjoy the post!)
You might be wondering about the title of today’s post. The term “silver bullet” has become an American expression meaning a quick, simple, and seemingly magical solution to a complicated matter. The reason I’m bringing this up is because it might be tempting to think of pre-employment testing as a silver bullet. But it couldn’t be further from the truth.
According to Josh Millet, CEO of Criteria Corp, when a testing provider tries to sell you their services with the promise “never make a bad hire again”, you should run, not walk in the opposite direction. “Testing isn’t a crystal ball, and that’s not how the science of employee selection works. Incorporating pre-employment tests into the hiring process is about making more informed decisions and maximizing your chances of hiring people who are likely to succeed. Think of it like improving your batting average.”
This raises the question, what can organizations do to improve their recruiting processes and select the best talent? One way is to use pre-employment tests as a way to predict learning potential. In the Society for Human Resource Management (SHRM) study “The New Talent Landscape: Recruiting Difficulty and Skills Shortages”, sixty-eight percent (68%) of respondents indicated that they are experiencing challenging recruiting conditions.
I can see organizations being faced with a hiring dilemma. Do we hire Candidate A, who has 80 percent of the skills and provide them with training for the remaining 20 percent? Or do we leave the position vacant until we find a candidate with everything we’re looking for? Pre-employment tests can help organizations hire a candidate with the potential to be a rock star and allow them to invest in their development.
Avoiding the Bad Hire is Essential
Millet says the other way to improve hiring is by reducing risk. “Ultimately, it’s not about hiring the perfect person every time, it’s about improving the number of good people you get in the door and avoiding the truly toxic hires.”
And bad hires are expensive.
In an article on Business Insider, Zappos CEO Tony Hsieh says that bad hires have cost his company “well over $100 million.” Arte Nathan, former CHRO for the Wynn Las Vegas, points out in a SHRM article that bad hires impact the entire organization. “Most companies don’t know the full cost of the turnover, so they don’t apply the resources upfront to avoid it. If you make a bad hire, there is a ripple effect among all who work for you, your product and your product quality.”
While using pre-employment tests to predict learning potential and reduce risk aren’t mutually exclusive, let’s focus today on some of the hiring tactics designed to reduce risk and how pre-employment testing can mitigate workplace injuries, employee errors, employee theft/fraud, in addition to the cost of a bad hire. Mitigating risk, especially when it comes to employees, can mean different things in different industries and occupational settings, and is dependent on the business outcomes you’re trying to achieve. For example:
Manufacturing: It’s important to hire employees who are more likely to follow the company’s rules and avoid safety accidents. Workplace accidents and incidents can harm human lives, which lead to higher workers’ compensation claims and can be costly (among other things).
Retail: I think it goes without saying, but let’s say it anyway. Organizations want employees who are less likely to steal inventory, cash, or customer data.
Technology: Companies want to hire software engineers and workers who can motivate and push their teams to deliver projects on-time and within budget without making coding mistakes that could jeopardize security.
Marketing: Organizations want to hire public relations and social media managers who are not prone to posting inaccurate or inappropriate content, which could damage the company’s consumer brand.
Now, I know what you’re thinking. And you’re right. Simply using pre-employment testing won’t magically prevent you from ever making a bad hire again. But testing can provide a way to reduce the overall risk an organization faces each time they hire someone. Pre-employment tests provide a data-driven way to way mitigate risk because they are correlated with reducing these types of risks.
One final thing – I wasn’t aware of this, but some insurances companies that write business policies give discounts to companies that use tests in the hiring process. Criteria Corp shared with me that they have a partnership with an insurance company that specializes in professional liability insurance and risk management services, and they actually provide discounts to their customers who use their integrity tests to hire employees because those tests are correlated with reduced risk.
Reduce Risk to Increase Employee Retention
Organizations today are focused on retention. That means making the best hire possible. No one wants to spend all that time and money hiring someone to have them leave after six months or a year. However, hiring the best talent involves mitigating risk so the company can avoid hiring a toxic, unproductive employee who brings down the entire organization. Pre-employment testing is one way to do it.
Pre-employment testing is a complex topic. Luckily Criteria Corp has created a “Definitive Guide to Pre-Employment Testing”. Download a copy to learn more about the benefits of pre-employment tests. And be sure to follow their blog to learn even more.14