It’s the Structure of Hiring that’s Broken

The hiring process the majority of organizations use today has not fundamentally changed in decades, and many statistics point out that the chances of hiring a great fit remain dismal. Typical unstructured screening methods are the biggest contributor to our hiring mistakes, and with more structured and proven approaches in the market, the time has arrived to make some changes – and reap the rewards of better hiring.

Despite all the hype within hiring, the standard recruitment process has largely remained unchanged. In recent years we have seen technology such as applicant tracking systems (ATS), video interviewing and social media influence steps within the process, but we’re still not getting the results we want – a higher percentage of great hires and a lower percentage of mis-hires.

It’s the tools we rely on within the standard hiring process that are leading us astray. Our most common screening methods – evaluating resumes, the phone or video screen, in-person interview, and reference check are letting us down. Why? Because they are typically unstructured and encourage subjectivity. Unstructured interviews, in particular, the most-relied on selection tool, have proven to be poor predictors of who will be a good employee.

In 2013 Professor Nathan R. Kuncel, Ph.D. and his peers at the University of Minnesota conducted a study that compared the relative predictive power of system-based methods (e.g. driven by structured data) versus subjective methods (e.g. unstructured, in-person interview) in predicting future job performance. What they found was eye-opening—the system-based evaluation method improved prediction of performance by more than 50%.

What this study is telling us is that using structured, validated information to support hiring decisions will give us better hires. In the recruitment world, we should make a distinction between screening tools like the ATS, which rely on the subjective resume (and don’t make better hires), and the tools which objectively leverage structured and validated information to predict who will make the better hire.

At Fitzii, we have built one of these structured tools. Our hiring platform evaluates and scores each candidate based on three predictive factors: qualifications, personality traits, and environment/culture fit. As our clients have found, evaluating these three factors through a structured process will achieve the kind of hiring improvements Dr. Kuncel found in his study.

For a popular example, take a look at what the Oakland A’s of Major League Baseball have done in recruiting new talent (made famous in the movie Moneyball). They use a scientific approach to evaluating talent, and the impact is dramatic—currently the best record in baseball with one of the lowest annual payrolls (27th lowest out of 30 teams) of all Major League Baseball teams.

The evidence supporting a structured approach to evaluating talent is clear, and it is time for HR and recruitment practitioners to step over the edge and move away from tried – but not true – recruitment practices. After all, don’t we keep talking about HR getting a bigger seat at the executive table? What could make a bigger difference than hiring more superstars and less duds that are draining the company? Like the GM of the Oakland A’s did, here’s a chance for HR to create a major impact to the success of the organization.

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