The New Science of Hiring

Care to dramatically enhance your chance of finding great employees? Trade in your gut instincts for a systematic approach to interviewing, testing, and evaluating job candidates.

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What was her company missing? Susan Bowman asked herself that as soon as she plopped into her chair at Tri-anim, a medical-supplies distributor in Sylmar, California. It was two and a half years ago. Bowman had just joined the company as head of human resources, and her highest priority was improving the company's hiring. When she arrived, the HR department was basically shut out of the hiring of salespeople. Bowman wanted to make it more useful, especially after she noticed some hires were fantastic and others were disappointments.

What Tri-anim was missing--and Bowman fortunately recognized this--was something most employers in America have been missing: Conventional job interviews don't work.

A typical interview--unstructured, rambling, unfocused--tells the interviewer almost nothing about job candidates, other than how they seem during a couple of meetings in a conference room. But what are these people like late at night and under pressure? What motivates them? How smart are they? Have they handled tough projects? Do they prefer working alone or are they better with a team? Regular interviews assess barely any of this, and in fact are miserable predictors of job success. In technical terms, they have a .2 correlation with predicting success.

Discouraging, isn't it? It would be--except that industrial and organizational psychologists are on the job, seeking the best ways to evaluate job candidates. A focused three-part approach can make the hiring process as standardized and objective as possible--and can help predict the best performers. The system starts with what is called behavioral interviewing, in which candidates are barraged with tough questions about how they've handled specific assignments and problems. Bluffing becomes close to impossible, and the process is based on facts, not feelings. Interviewing is followed by two kinds of tests: cognitive tests, which measure intellectual ability, and personality tests, which are now sophisticated enough that companies can directly compare candidates with their top performers. The third step is asking candidates to do tasks like the ones they'd do on the job.

Most employers will recite over and over that people are the secret to their success--and given that turnover costs about 1.5 times the salary of the employee who moves on, according to PricewaterhouseCoopers, they'd better mean it. But it's astounding how few companies bother with more than improvised, all-but-meaningless interviews to hire their people. "This is a topic that's been researched to death by the field of industrial and organizational psychology," says Peter Cappelli, management professor and director of the center for human resources at the Wharton School of the University of Pennsylvania. "The amazing thing is how few companies take this seriously. It's kind of mind-boggling that they would undertake such huge investments and not pay attention to what we know about how to pick out the people who are going to be best."

Susan Bowman had been studying some of this research. She was pleased to see that Tri-anim had been using the testing company PSI to assess candidates for some positions. She was less pleased that the test criteria hadn't been updated in six years and that some of the company's hiring managers didn't use the tests. Bowman immediately had PSI reassess the best and worst performers in a number of areas and develop profiles of the top performers. The goal is to compare candidates with the ideal. Tri-anim salespeople, for example, need to be not just energetic and detail-oriented (pretty common in salespeople) but also unusually independent: They spend a lot of time alone.

Bowman began requiring the PSI assessments as a last step in the managerial, IT, and sales hiring processes. They've already turned up surprising results. Recently, a recruiter and a manager were disagreeing over two candidates for a position--until the PSI reports came back. "The results were really staggeringly different. It was a combination of not only skill sets, but that one individual's people skills were so much lower than the manager had anticipated and the other candidate scored much higher," Bowman says.

She has now trained all of Tri-anim's hiring managers in behavioral interviews. "Structured interviews with behaviorally based questions really allow us to drill down," she says. In a daylong session, the managers learned the tenets of behavioral interviews and practiced asking open-ended questions. Though she doesn't use work assessments--and that could increase the company's hiring success even further--these two steps paint rich, objective portraits of candidates. Even the sales hiring managers, who didn't want to abandon their random interviewing tactics, have become believers as turnover has dropped. "We all want to hire the best," Bowman says. "This gives really good, objective information that allows the manager to take the halo off the applicant."

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