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What Shouldn’t Change in Your Hiring Process Despite Low Unemployment

March 20, 2018

Recruiters and hiring managers have it tough, especially lately. While the record low unemployment rate is a positive trend for the U.S., attracting talent in this climate is no easy feat. There aren’t as many people looking for jobs, so companies have to capitalize on the available talent that they do get access to. This sometimes leads organizations to the knee-jerk reaction that the selection process needs to be easy and steps should be eliminated in order to reduce a candidate's time in the process to nearly nothing. 

This is a logical reaction, but is it the right strategy for the business or for the candidates? I concede that it is critically important to build and maintain an engaging employment brand, but eliminating assessments is not necessarily the right strategy. 

Here’s why you shouldn't stop using employee assessments despite low unemployment rates:

  1. While the current labor market makes candidate attraction more difficult, the costs of simply allowing anyone in the door who applies can negatively impact the business for years to come.

    The most expensive line item on any company’s P&L sheet is people. Turnover costs money, low productivity costs money, paying the wrong people costs money. It is simply the case that regardless of market conditions, hiring the wrong person is one of the most expensive mistakes an organization can make. Not only are those who are not a good fit more likely to perform poorly or turnover, those who stay can create a negative force in the culture that will reverberate into the future, even when the labor markets shift back to a more favorable selection ratio (number of candidates/number of positions).

  2. Our Applicant Reactions Research shows us that top candidates prefer to work for companies that want to hire top talent.

    Top candidates do not want or expect to just be given jobs. Most people do not like working with people who are less competent or who they lack respect for. Proving to candidates that you value talent is an important consideration in how they view your company and can impact whether the top talent in your pool decides to join your organization if given a job offer. Providing the candidate the opportunity to show their stuff gives them confidence that 1) your employment decisions are fair, and 2) you value bringing in the best. A talent measurement process sets the tone up front that your organization prioritizes effectiveness. This is a prerequisite step in building a high-performance culture.

  3. It also shows us that candidates react positively to employee assessments.

    Recruiters' understandable and often-heard concern that in current talent market conditions candidates will refuse to take tests or will go to other organizations without assessments is understandable, however, it is not correct. It is not backed by data. In our extensive research, we have found that the data simply do not support the conclusion that candidates react negatively to assessments in the current labor market.

    1. Our assessments have a 98% completion rate. When people start assessments, they finish them.

    2. Our applicant reaction data show us that candidates enjoy the assessment experience and that the assessment left them with a MORE positive view of the organization.

    3. There has not been a decrease in quality or a change in distribution. If recruiters were correct that top candidates gravitate to positions that are easy to get, we would see this in our results. If this assertion were true, we would see a lower proportion in high quality candidates across our client base. We administer 3 million assessments each year and we have not seen this proportion change in any labor market, any industry, or any job. Simply put, there is not data to support the notion that top candidates are turned off by assessments.

      Read more: Employee Assessments: Job Applicant Reactions Research

  4. There is value in understanding “who you are getting.”

    We do acknowledge that it is difficult to find talent in this labor market and there is a business need to fill positions. In these times, it is important not to ”throw the baby out with the bathwater,” but it is also important to adjust your test interpretation strategy. If the selection ratio simply doesn’t allow an organization to differentiate as much as they would prefer, there is still value in cutting those people who will have a very low likelihood of success. Allowing these people entry is not a good business decision. That said, there are times when business needs dictate relaxed standards; in tight labor markets, sometimes it is a useful strategy to adjust standards to meet business needs, but still use assessments to inform interviews and to help develop new hires during onboarding who may not have the ideal profile. This strategy has several advantages over removing steps from your hiring process:

    1. You will maintain a consistent process. This approach has compliance advantages and it allows you to ”tool up” more easily when the labor market shifts (which, inevitably, it always will). By keeping the assessment in the process, you will know exactly how to use it to make good business decisions as the labor market shifts.

    2. You will increase utility at later stages in the process. Often, one of the biggest value-adds of short, top-of-funnel screening assessments is that they allow interviewers who are further downstream in the process to understand which responses to probe. Using an engaging assessment experience not only helps candidates react positively to the organization, but also – even if you don’t cut anyone – it helps interviewers focus on the important areas they need to capture during the interview process so they can make the most accurate determination of fit.

    3. It gives you valuable onboarding data. The unfortunate reality in these labor market conditions is that you may end up having to relax your decision standards to meet business needs. If that is the case, it is much better to know what you are getting than to not measure it at all. The employee assessment can help inform the business where a new hire’s developmental needs are. This information is useful if an organization is to make ”lemons into lemonade.” 

By using employee assessments, organizations can get tremendous ROI even in the most challenging talent markets by preventing turnover, improving the candidate experience, informing the hiring process, and developing employees in the early socialization stages.

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Ted Kinney, PhD Ted Kinney, PhD is the VP of Research and Development for PSI. An Industrial/Organizational psychologist, Dr. Kinney leads a team of selection experts and developers in the creation and on-going research into the most efficient and effective selection methodologies and tools. He is a trusted advisor to many international companies across all industries. He has particular expertise in behavioral interviewing, turnover reduction, effective selection strategy, and executive assessment.