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Latest assessments use companies’ own data to identify promising new hires.
If past behavior is the best predictor of future results, then the newest crop of behavioral analytic tools may be an HR professional’s best friend. Such assessments are helping more employers find candidates with the traits, temperament and innate talent best suited to the jobs being filled. In addition, the latest technology lets companies customize the tools using predictive data about their own top performers.
Kyle Lagunas, talent acquisition analyst at Brandon Hall Group, a human capital research and advisory firm in Delray Beach, Fla., defines behavioral assessment as "a systematic evaluation of candidate personality profiles used to gauge the viability of a candidate based on things like culture fit, work style and potential."
Traditionally, these assessments were much less common than those that measure hard skills and specific job knowledge, but that may be evolving. In a recent survey Lagunas conducted last year of 237 companies of all sizes, about half of which are in the U.S., 52 percent used skill and knowledge assessments in hiring, and 38 percent used predictive behavioral assessments.
"If you are having trouble showing ROI [return on investment] for the use of social or mobile in the recruiting process," Lagunas says, "you won’t have the same problem with the behavioral assessment."
The experience of Seaport Hotel & World Trade Center Inc., a 428-room conference complex in Boston with about 600 employees, bears that out. After integrating an online application tool with a 20-minute behavioral assessment, the company reduced its already-low two-digit turnover rate to a single digit, according to T. Michael Chandler, the company’s HR director. Seaport has also documented cases in which hiring managers ignored the assessment results and hired people who ultimately did not work out.
The survey tool was partly based on a model derived from the company’s own data on what makes for a good fit in each of Seaport’s six employment segments. An automated analysis provided a high, low or medium rating of a candidate’s cultural fit for a particular job. That gave managers a starting point for evaluating applicants.
AMC Theatres saw similar success with its behavioral assessment efforts.
Employers in the market for assessment tools have a growing number of vendors from which to choose. As Lagunas noted in a recent blog, "2013 saw a spike in the number of candidate assessment solutions … many of which specialize in profiling candidate personality and evaluating key performance indicators like culture fit and team fit." Consolidation has also continued with a flurry of vendor acquisitions. To name a couple: IBM recently acquired Kenexa, and Infor acquired PeopleAnswers.
Some vendors offer behavioral assessment as part of a broader talent acquisition suite, but more offer solutions that can be integrated with any acquisition technology. "This is because the best candidate assessment products are built on very complex testing technologies," Lagunas says. "We may see some more enterprise vendors scooping up candidate assessment products, but I doubt we’ll see any developing their own solutions."
AMC Theatres: Finding Friendly Faces
Several years ago, executives at AMC Theatres decided they wanted to ensure that guests’ satisfaction with theater staff became part of their magical movie experience. Based in Kansas City, Mo., AMC has interests in about 350 theaters, with nearly 5,000 screens nationwide.
Keith Wiedenkeller, SPHR, who recently retired after serving 15 years as chief people officer at AMC, says guest satisfaction represented an important way for AMC to differentiate itself from its competitors, which generally offer otherwise similar amenities and food service.
While improving guest/staff interactions was crucial to business success, it was no easy task given the high turnover rates for theater staff, who tend to be high school and college students.
Creating the Assessment
To address the daunting task of finding reliable teenagers, Wiedenkeller began work with vendor Kenexa to develop a behavioral assessment portion of AMC’s online application system, which was generating 1.6 million applications a year.
Most of the traits AMC looks for—friendliness, service orientation and dependability—are not easy to put your finger on through a normal application process. "Kenexa helped us to create a screening tool from their library and then customized it to deliver a candidate more likely to be successful in those intangibles," Wiedenkeller says. Over time, AMC worked with the vendor to validate and modify the tool.
Initially, AMC did not have a wealth of data about its employees, so it went through a list of competencies to define what it thought was important. Kenexa also surveyed top employees as identified by theater managers.
When AMC started the process, its crew turnover was approaching 200 percent, Wiedenkeller says. For the past couple of years, it has been below 90 percent, which is not considered high in AMC’s industry. Employee engagement scores also have improved—by 40 percent in the seven years since the company started the assessments. And AMC saw healthy improvements in customer satisfaction scores, which correlated with higher revenue per theater.
Executives were so pleased with the results that, about three years ago, Wiedenkeller and Kenexa developed an assessment to help AMC identify which employees to promote into management. Managerial candidates now take a separate assessment, which is based on a profile developed from data on about 1,500 managerial employees, along with financial information.
The managerial assessment is based on an in-depth study of the top 10 percent of current general managers, correlated with financial data, supervisor feedback and other inputs. "We found huge swings in performance from unit to unit," Wiedenkeller says.
Now, when the company replaces underperforming general managers based on the behavioral assessment, there is almost always an improvement in metrics such as customer satisfaction, employee engagement and revenue, Wiedenkeller says.
A Custom Fit
While behavioral tools have been around for many decades, with the famous Myers-Briggs dating back to World War II, the advantage of the current generation of tools is the way they can be tailored based on employer data from current employees who have performed well.
The amount of customization can vary, says Jonathan Ferrar, IBM’s vice president of smarter workforce. IBM Kenexa has more than 1,000 assessments and a library of questions. An assessment used by two companies in the same industry might not differ in content by more than 10 percent. In other cases, especially at large companies, assessments can be highly tailored.
To create its assessment, Seaport surveyed its 600 employees and got an 87 percent response rate. The company looked at six general segments of its employee population—including housekeeping, food and beverage service, and conference planning—and developed a profile for each position. The questions were the same for everyone, but the job profiles differed by segment. Chandler used data from the company’s 360-degree performance evaluation for each employee and additional metrics pertinent to each segment to develop the profiles. For example, profiles in the housekeeping segment included the results of nine annual formal inspections of room attendants by supervisors.
Challenges and Limitations
These tools are not necessarily for everyone, though, and it’s important to understand their limitations. Although they improve hiring in the aggregate, that doesn’t mean that every individual matching the profile will succeed, Lagunas says. "There is a science to predictive analytics, but the outcomes are not guaranteed."
Lagunas has observed that companies using or considering the use of predictive behavioral assessments tend to be the ones that already have effective hiring practices. "They know the technologies and are already using some," he notes.
Seaport is an example. It didn’t hurt that Chandler was steeped in the technology as well when he came on board, having used the same online application system and behavioral assessment instrument from Infor PeopleAnswers for several years at his previous employer.
Companies that don’t have a rich source of historical data may not be able to create useful tools, at least initially. "One downside to using data is you have to have good data to use," says Jason Taylor, group vice president and chief human capital management scientist at Infor PeopleAnswers. "While most companies are continuously improving data collection processes, we still see companies that have data for only a few key positions. We have another technology to help them collect data for other roles."
How It Works
Companies that decide to integrate a behavioral assessment can start by selecting a vendor. The vendor will validate an archive of questions and then decide on those that are relevant to the company.
The next step is to conduct a trial survey of employees. Larger companies usually survey a statistically significant sample of employees identified as top performers and often include low performers for comparison. A smaller company might survey its entire employee population. Based on the results, the vendor and customer may revise the questionnaire before using it with job candidates.
In the best cases, adopters will use more than one type of data to identify top performers before developing the questionnaire. Each situation is unique, so the data used will vary. Annual performance reviews are a common input, as are employee engagement scores, customer satisfaction ratings by employee and various financial data.
Expect the Unexpected
Predictive analytics often lead to findings that run counter to conventional wisdom, and this is certainly true for behavioral assessments.
At AMC Theatres, former chief people officer Keith Wiedenkeller made an interesting discovery: Some of the worst general managers based on the assessment had higher-than-average personal engagement scores. A charitable interpretation of this data could be that these bosses are passionate about their work but a bit clueless.
Meanwhile, at Seaport, Chandler was surprised that in housekeeping, problem-solving and flexibility were more important traits than attention to detail.
For those devoting time, money and people to recruiting with no variation in results, Chandler suggests "investing in automating the process and adding behavioral assessment." By doing so, you may find that new technology has made it easier than ever to predict success.
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