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We received a great question from one of our clients that we did not immediately know the answer to: “Do personality tests work?” This question puzzled us so we decided to do what most of us do with a puzzle, go to the internet. The search for information yielded some interesting results that I want to share with you. One very surprising result was the number of hits for pages created on “how to beat a personality test”.
This month’s CIO letter will review the pros and cons of Pre-Employment Testing.
Pre-Employment Testing, as the name implies, refers to all the testing that is done prior to delivering an employment offer. This includes personality, drug, aptitude, intelligence & emotion quotient testing; and criminal background, education and reference checks.
We found significant amounts of misleading and biased information regarding Pre-Employment Testing online. Organizations who sell these services produce most of the information on the subject. There are hundreds of different types of pre-employment assessments ranging from honesty & integrity tests to management evaluations that measure career competency. There are also clinically oriented psychological profile tests and assessments, which are diagnostic in nature.
We can’t cover all areas of Pre-Employment Testing in this letter as the subject is so expansive. Instead, the areas we will cover are aptitude, intelligence, personality, and behavioural testing. On the surface, this type of screening appears to valid. Take your top people (the employees you most want to replicate), look at their test scores, and use those to build a baseline or ideal profile. Then, use this profile to create a candidate filter.
However, when you step back to look at highly successful individuals, use will note they possess great diversity of profiles and personalities. Just look at successful CEOs and their varied personalities. Jack Welsh and Steve Jobs are both viewed without dispute as successful yet their profiles and approaches are very different. Screening using these methods may eliminate the next Steve or Jack because an individual like them won’t fit precisely into a mould. This would be a tragic loss for any company.
Research has shown that cognitive aptitude tests are much more accurate predictors of job performance than other widely used employee selection techniques. For example, a comprehensive evaluation of peer-reviewed studies regarding the predictive validity of various selection techniques concluded that aptitude tests are twice as predictive as job interviews, three times as predictive as experience, and four times as predictive as education level.
Behavioural testing provides for a more predictable outcome when screening applicants for employment when used in conjunction with behavioural interviewing techniques. By using validated employment tests and assessment tools, a company can add objectivity, especially regarding management evaluations, and remove unintentional bias.
Job fit is very important and many companies use behavioural interview questions to match the candidate with the job. You want to know that a management candidate has good communication and interpersonal skills, but you also want to know about their overall leadership skills and management potential. What about the candidate’s customer service skills, his sales skills or his emotional intelligence? Doesn’t the interviewer have enough to focus on without going into so much detail in the short time allocated to complete the interview? Well, that is the whole point behind the use of pre-employment assessments.
Most of the articles that you have probably read pertain to the use of psychological profile testing and assessment. There is a major difference between non-invasive pre-employment testing assessments and clinically oriented psychological testing assessments. Most of the assessment instruments involved in litigation are “restricted use,” meaning psychological assessments that generally should not be used in the business environment.
Personality tests are least accurate since they only measure different attitudes about items. A general attitude about something is not able to predict accurately how a person will react to various business situations. These tests cannot predict behaviour because behaviour is context sensitive. People act differently in different environments. For example, in a support role when there is a backlog of issues, people will react differently on a sunny Friday afternoon in the summer than they will on a rainy Monday morning in the middle of winter.
There is an attempt to associate success with specific personality types. In fact, personality requirements are different for different jobs. Rarely do any of the tests customize their recommendations by job type or environment. It is simply, “this person may (or may not) succeed.” In actuality, people are not as cut and dry. Furthermore, there are generational changes that occur over time. Thus, if an organization uses the same profile for 10 years the predictability may drop.
About 65% of all employers use some sort of pre-employment screening. Organizations must review their testing annually and determine what success looks like in using testing. Many of our clients swear by them while others have mixed results. So to answer our question: “Do Personality Tests Work?”, there is no definitive conclusion , but rather it boils down to a company’s decision. If your organization uses this type of testing, the key is not to rely on the test as the sole screening criteria to hire a candidate, but rather as an additional tool in the hiring toolbox.
Most people in the technology industry are generally considered smart, and highly skilled in math, logic and problem solving. However, these highly developed technical skills usually come at the expense of their interpersonal skills. IT managers are not immune to this imbalance and spend little time to improve these underdeveloped skills. Making matters worse, we recognize and promote based on results and reward for performance. The consequence is that managers spend 95% of their time focusing on measurable items and pay little attention to the emotions of their staff. This is not because managers don’t like people or don’t care, but few of them have an idea of what employees really want from a boss.
“But that warm fuzzy is what HR does. I do delivery,” is the common retort. True, but employees do not leave a job because HR did not give them enough hugs. The old adage holds true; people join companies but leave managers. Surveys show individuals quit for 5 main reasons: pay, management, career advancement, benefits and other. Many of these can be influenced by management. We can reduce turnover simply by understanding your staff’s desires.
The following CIO letter will shed some light on what matters most to workers. The results from a survey of 500 employees by the Lore International Institute over a 2 year period shows some interesting insight and some pretty basic things we can all improve on. Here are the findings:
More than 90% of employees want honesty and integrity from their managers. An equal number desire fairness across all staff and for management to hold everyone accountable to the same standards. Furthermore, just over 75% indicated they sought after trust, respect, dependability, collaboration and appreciation. But only 14% wanted interesting conversations from their manager and only 3% wanted them to be a friend.
These requirements seem easy to roll out but can be difficult to sustain. We, as managers, will revert to our natural personalities. So what else can be done? Fortunately, Randstad surveyed 6000 people throughout North America giving more insight. What will make them happy?
Based on these results, here are 6 suggestions to improve employee satisfaction and lower turn-over:
Lastly, here are 4 things you should say on a regular basis:
“How can I help?” This statement will aid you in determining impediments your staff face in performing at their best.
Try some of these ten pointers; you may find them to be successful in helping you to reduce your turn-over. We advise not to try all of them since you might find some cynicism from your team, especially the younger members.
We have come through a pretty wrought economic period; many have coined it the Great Recession. Most of the 1st world fared far worse than Canada like the US, Ireland, UK, Iceland and Greece to name a few. The impact we faced here was significantly shorter and less deep. The Canadian job market has now recovered all the positions we lost during the recession. As with most economic slowdowns, the end is marked by a large wave employee turnover. Most companies are just starting to grow again, consequently many companies are caught flat-footed by this turn-over and they see many of their great people leave. This CIO letter is to outline what is happening with the labour force and how to manage through it.
Where does this turn-over come from?
Recessions create some interesting dynamics in the labour market. There are 4 main forces that influence people:
These main crosscurrents result in very little voluntary employee turn-over during a recession. While companies benefit with lower voluntary turnover during the slow down, the downside of this stability is a pent-up demand for a change in employment. As soon as the layoffs stop and companies begin to hire again, people dust off their resume and start cruising the job boards. This causes a problem for companies. If a company has 1,000 employees and they need to grow by 10%, but their turnover has increased from 5% to 15%, hiring over 200 additional people than you hired the year prior is required. That adds a substantial unexpected cost to an organization.
The latest survey from Right Management confirmed we have now entered this phase of the business cycle. They surveyed 1400 people and found 84 percent planned to look for jobs in 2011, up from 60 percent last year.
Why do people leave?
Interestingly, the reasons for leaving are very stable and have a similar pattern post recession as that prior to the recession. In a survey from Salary.com here the top reasons:
Some of these issues are difficult to resolve, but fortunately you can do things to improve some areas. One way to determine underlying issues is to implement an employee satisfaction survey for your team. You may find some gold nuggets that you can use to increase job satisfaction. This improvement will lead to productivity improvements and reduced turnover. Other good advice is to just listen to your employees and observe changes in behaviours. These are very good for determining employee happiness.
Some of the reasons for turn-over can be traced back to the initial recruitment. For example, commute times impact 4% of a person’s decision to leave. Our advice to our clients when recruiting people is that 60% of their hiring decisions should be on personality fit. Understanding a candidate’s career aspirations and motivations up front will reduce the possibly of their leaving because of career or boredom. Also, don’t over promise or over sell the job, you need to be realistic and honest about the duties and career growth.
Some minor improvements to understanding your team better and improving your hiring processes will help your organization manage through this turnover period.
Over 1.1 million meetings occur every day in Canada. Yet, we all complain endlessly about them even though our careers are immersed in them. The average professional spends 5.6 hours in meetings a week. This does not include preparation time or time spending scheduling the meeting.
In a study conducted by Doodle, it found that for average professional, 64% of those surveyed spent more than 5 hours per week coordinating meetings. However, the average person only spends half an hour preparing for a meeting. Basically, the part of a person’s job that takes 25% of their time is only given 30 minutes to organize. Unfortunately, people confuse organizing meetings with planning.
The results of poor meeting planning is: meetings are longer; less efficient; generate fewer results; require more meetings; create frustration at all staff levels; create conflict in meetings; other people dominate the meeting; and cost organizations billions of dollars each year in otherwise productive employee work time
It is was no wonder most professionals who meet on a regular basis admit to daydreaming (91%), missing meetings (96%) or missing parts of meetings (95%) and a large percentage (73%) say they have brought other work to meetings and 39% say they have dozed during meetings. If most people are getting little value from meetings, so why do we keep subjecting ourselves to them?
This CIO letter is looking to stop this insanity. Here is a list of action items one can use today to make your meetings better.
1. Plan for the meeting.
A safe rule of thumb is to spend an equal amount of time preparing as the meeting is long. If you are expecting the meeting to be an hour long then the planning should be an hour long. Items to be prepared beforehand are: agenda, hand-outs, decisions to be made presentation material and action items. Detail the agenda and share with the attendees prior to the date and silicate feedback and input.
2. Why are you having the meeting?
Begin your planning by determining the purpose of the meeting. What do you expect the result of the meeting to be? The goal of the meeting needs to be communicated to the attendees both prior to the meeting and at the beginning of the meeting.
3. Take notes.
There is nothing worse than have a meeting and have some great insights but a day later, no one remembers. Designate someone to take notes and distribute a meeting summary including action items with designated responsibilities.
4. Who must attend
Some people like to have an audience. But an office meeting is not the place or the time to practice being a toastmaster. Build a list of those who must be there and should be there. Send the invite to those who must be there and make it optional for those who should be there. Let them determine if they must be there.
During every good meeting, great ideas come out and items need to be acted on. However, if no one is assigned a task or there is no method of follow-up, then the time and money invested in at meeting was lost. Have a schedule and timeline for follow-up.
6. Attendee interaction
If you have every attended a seminar or lecture, you know how great these people are at being putting to sleep or daydreaming. To avoid this syndrome, get the people involved; present their thoughts and opinions. Engaging the audience will make it more interesting and get more buy in.
Simply by trying one of these items, you will improve on your meetings. And in the end, is that not why you read this article? Like most things, you must make changes slowly and by making one a habit, that ensures that the action becomes effective.
What could possibly be a ¼ million dollar expense yet go unnoticed by Accounting? Employee Turnover (ETO) is the answer. If you are like me, you have a hard time believing ETO can cost an organization this much. Well, I took out my slide-rule and crunched the numbers. After a critical review, the result I came to was in fact a number higher than $250K. This CIO letter will help you understand ETO and give you some pointers on reducing it.
Just what is employee turn-over and how is it calculated? Employee turnover occurs when employees leave voluntarily and the position must be re-hired for. The ratio is used by HR and management to compare year over year within an organization and compares their numbers against an industry average. It’s typically used as a proxy for organizational effectiveness. It can also be used to indicate a company’s success with hiring and retention practises.
After years of working with this ratio, it has proven to me to be one of the most costly and seemingly intractable human resource challenges confronting organizations. Turnover affects the bottom line, whether you see it or not. Turnover is a silent but effective profit killer. The ratio is calculated by dividing the number of people who voluntarily leave during a year by the total number of employees. For example, if your department has 100 employees and 10 people leave, your turn-over rate is 10%.
In Canada the average ETO in all industries ranges from 10%-16%. In the U.S., from 2000 to 2008, the average turnover rate was 13.3%. However, rates vary widely over different job sectors. For example, Utilities industry turnover is 6.5% whereas healthcare is 15.5%. The Technology industry is in the middle at 10.8%.
Improving employee retention can have a significant positive impact on an organization. The Harvard Business Review reports that a mere 5% increase in employee retention results in a 10% decrease in costs, while productivity increases from 25% to 65%. Before we can start to manage these costs we need to be aware of what they are. Some obvious costs come quickly to mind, but there are also numerous others you may never have considered that can have a serious impact on your bottom line.
Here is a breakdown of costs:
Separation process costs: costs related to the time and expense required to exit an employee from the Organization. It typically includes: exit interview cost, cost of administrative issues related to separation, and cost of separation pay if applicable. Plus all the IT costs like security, keys, computers, files, and phones that are required after the person leaves.
Recruitment cost: cost of sourcing, interviewing, and hiring expenses of the replacement. It may include advertising expenses, agency fees, interview costs, cost of tests or exams and the difference between the new and separated employee’s annual compensation.
Training and orientation costs: are those related to the on-boarding process of a new employee and the training expenses occurred when getting new recruits up to speed.
Finally lost productivity costs: Typically includes costs of additional overtime, cost of additional temporary employee, cost of lost customers or profits, cost of lower productivity because of the negative feeling remaining employees may harbour and cost of additional employee leaves related to the termination.
Here is some math: Assume the average time to replace is 10 weeks, training is 10 weeks until full productivity, and average separation cost is 2 weeks. Then an employee earning $52,000 per year will have about $22,000 in lost productivity. Assume a team of 50 employees that has an ETO of 10% will result in losing 5 employees – costing a total of $110,000. The cost of recruitment typically is ½ year’s salary. When you add all these costs you arrive at $242,000 for only 5 employees per year. Change a few variables and the cost can be as high as 150% of an employee’s salary.
Lowering turnover can be tackled from 2 sides: Your current employees, and Hiring new employees:
1. Manage workload
2. Recognize good performance
3. Training and promoting from within
5. Exit interviews
6. Monitor total compensation
1. Contract to Hire
2. Personality screening
3. Team interviewing
4. Tenure Bonuses
Employee turn-over is never a cause and effect but more about system feedback. Changing a high turn-over environment is not easy, but small changes can have huge benefits.