Efficient Hiring in a Tough Economy

1. Efficient Hiring in a Tough Economy

2. Agenda • Challenges of efficient hiring • Advantages of using psychometric measurement for selection • What is considered a “test” • Legal considerations – doing it right • Validity and reliability • Additional testing considerations • MSEC Testing and Assessment services

3. Staffing Concerns …. • Hiring new employees is a big investment • Finding top candidates is time consuming • Companies are flooded with applicants • Who is qualified? Who is not qualified? • Workload to sort through applicants has increased • Bad hiring decisions/losing applicants is a problem

4. Employee Performance and Business Outcomes…The Facts • Good hiring decisions have positive impact on business results • Poor hiring decisions • Negatively impact performance and productivity • Increase turnover and staffing costs • Inefficiently use managerial time • Lower customer satisfaction

5. Case Studies Supporting the Use of Psychometric Assessments • Transportation company reduced counterproductive work behavior by using a personality measure saving the company $1M annually. • Warehousing and Distribution business reduced turnover by using a customized job fit measure; 43% of high scorers remained on the job after 90 days, whereas only 23% of those scoring low were retained. • Wireless Carrier increased revenue by hiring the highest scoring candidates who generated an additional$17K per month aggregate in product features revenue.

6. What is the ROI? • Value of better hiring decisions – extensive private and public research has shown that well designed assessments can improve the average performance of newly hired employees by 5% • Value of avoiding “Regrettables” – conservatively the average cost of hiring an employee who engages in counterproductive work behavior such as theft is $7,500 based on retail theft statistics. • Value of reduced turnover – when designed properly, tools can reduce turnover by 10% or more. • Value of increased staffing efficiency – reduced administrative time screening candidates

7. Job Performance Drivers Do they know how to do the job? Can they do the job without great stress? Do they want to do the job?

8. What should be measured? Motivation Cognitive Ability Personality Practical Skills Attitude Measure as much of the person as possible.

9. Assessing the Whole Person Interview Work Simulations Skills Tests References Personality Tests

10. What is a Test? • Anything used to select employees, including interviews, is a selection device and may be treated as a test. • Cognitive Ability • Job Knowledge or Skills • Personality • Physical Ability • Job Content - Simulations

11. Factors to Consider • Legal Defensibility • Job Analysis • Adverse Impact • Psychometric Soundness • Validity • Reliability • Practicality • Economical • Usability

12. Legal Issues • Prior to the 1960s it was NOT illegal to discriminate in the hiring of employees • Federal Legislation and publication of important selection guidelines • Title VII of the Civil Rights Act of 1964 • EEOC in 1965 • Uniform Guidelines on Employee Selection Procedures, 1978 • SIOP’s Principles for the Validation and Use of Selection Procedures, 1987 (revised 2003)

13. Uniform Guidelines on Employee Selection Procedures • Designed to enforce Title VII • Intended to provide a uniform set of principles governing the use of selection procedures • States job analyses must be conducted for all jobs on which testing occurs • Unlawful to use a selection procedure that creates adverse impact

14. Adverse Impact • If selection rate of a protected group is less than 4/5 (80%) of the favored group, discrimination has occurred • Example • 100 Females apply, 25 are selected (25%) • 200 Males apply, 100 are selected (50%) • Female’s selection rate is only half of Male’s.

15. Enforcement • Equal Employment Opportunities Commission (EEOC) • Department of Justice (DOJ) • Civil Rights Division • Department of Labor (DOL) • Office of Federal Contract Compliance Programs (OFCCP) • Private Plaintiffs’ Attorneys

16. Documentation • Job analysis results • Decision making process • Validation studies & technical reports • Test takers and results • Adverse impact analysis results

17. Validation • Does the instrument measure what it is intended to measure? • Is the measure job relevant? Job analysis is the key first step. • Is the validation study current? • Can we use Validity Generalization?

18. Job analysis Identify relevant job performance dimensions Identify KSAO’s necessary Steps to effective selection systems Identify/develop instrument(s) to measure KSAO’s Validation – Reliability, Validity (content, construct, criterion), Adverse Impact Use instrument(s) Continuously Evaluate

19. Reliability Types and Validity Approaches Test-Retest: Stability of test over time Reliability Parallel Forms: Equivalence of two test forms Internal Consistency: Consistency among test items Content: Test representative of domain Validity Construct: Test measures underlying principle Criterion-Related: Predictive: Test scores predict future criterion Concurrent: Test scores predict current criterion

20. Test Provider Support • Technical reports, data and documents compliant with UGESP • Support in the event of an OFCCP audit or EEOC charge • Litigation support and testimony

21. Practicality • Stakeholders = Candidates, HR Incumbents, Hiring Managers • Ease of use • Administration • Scoring • Interpretation • Costs - $ and time • Accuracy

22. Online Testing • Advantages: • cost-efficiencies • ability to quickly amass and report data • development of new testing methodologies • Challenges: • potential for fraudulent behavior such as cheating • easy entry of non-professionals selling tests • vast variability of points of entry to the Internet • situations where not all potential users would have equal access to the Internet.

23. Testing and Assessment Services at MSEC

24. Services Offered • Off the shelf products • Skills Tests • Behavioral Assessments • Test review • Test identification or development • Validation and Adverse Impact Analysis

25. Accounting / Financial Technology/Software Office / Administrative Retail Engineering Industrial / Warehouse Healthcare/Nursing Call Center Medical Office Customer Service Custom Test Development Online Test Authoring Skills Assessment Areas

26. Big 5 Personality Conscientious Tough-Minded Conventional (Rules) Extroverted Stable Additional Scales Teamwork Cognitive Reasoning Good Impression Behavioral Assessment Scales

27. Conscientiousness/ Dependability Concerns Hostility/Aggression Concerns Substance Abuse Concerns Integrity/Honesty Concerns Computer Abuse Concerns Sexual Harassment Concerns Good Impression Attitudes Assessment Scales

28. Features • Validated Assessments • Online Delivery • Item Bank & Variable Question Sets • Flexible Reporting • Supports Multi-language Use • Multiple pricing options

29. Additional Resources • Locate Test Reviews • www.unl.edu/buros • www.testpublishers.org • Legal and Government Requirements • www.doleta.gov • www.eeoc.gov • Professional Standards • www.apa.org/science/standards.html • www.siop.org • www.online.onetcenter.org

30. Contact Information Brandon L. Young, MA, PHR Tammeron Trujillo SPHR, GPHR Mountain States Employers Council, Inc. Denver Office 303.941.7760 or 1.800.884.1328303.223.5341 byoung@msec.org ttrujillo@msec.org www.msec.org

31. Use assessment in purposeful manner Use whole person approach Use tools which are unbiased and fair Ensure reliability and validity Evaluate candidates on job relevant characteristics Ask for technical manual Train administrators to administer consistently and interpret accurately Make reasonable accommodations Ensure instrument security Maintain confidentiality Continually evaluate the utility of your measures Final Assessment Tips