Making the Business Case for Assessments

Making the Business Case for Assessments | Human Resource Executive Online The authors argue that, especially in a poor economy, assessments will show a positive link to the bottom line. They relay several arguments they needed to overcome when rolling out and generating buy-in for their company's plan.

Tuesday, June 16, 2009
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Although those of us in the human resource field understand the value of using assessments in candidate selection, it is often difficult to convince line managers of their value and to gain complete buy-in to an assessment program.

It is particularly important to "make the case" for assessments in a down economy where we have the unusual luxury of more applicants than openings, and the opportunity to be very selective in our new hires.

And, we can ill afford hiring mistakes, or failing to maximize our selection effectiveness, in an economy where productivity and customer service are critical to overcoming the economic challenges that have created a very fine line between success and failure.

Additionally, like most HR tools, assessments must be applied consistently across the board to be both legally defensible and effective.

In implementing assessment programs for our customer-service teammates and our technician/mechanics, we have had to overcome several challenges and obstacles presented by our field managers.

As a human resource function, it is our objective to provide our field managers with tools to help them grow their businesses. However, we must first overcome perceived and real obstacles by demonstrating the value of the tools we are offering before we can expect our field managers to fully buy-in.

Making the Business Case

Common concerns expressed by our field managers regarding the use of assessments included:

There is a shortage of available talent for our open positions and we can't let anyone "get away;" we don't have the luxury of being selective.

Response: The benefits of being selective outweigh the perceived lack of luxury. The new practice of requiring the assessment assures a larger population of more productive, longer-tenured employees who help create customer loyalty.

Customers like to be served by the same consistently proficient technician every time they visit. Additionally, we will be offering a new staffing and scheduling tool from our workforce-management initiative that will help keep candidates in the pipeline, reducing the last-minute panic that leads to taking a higher risk approach to selection.

Our applicants will not put up with an involved, time-consuming selection process -- they'll just go somewhere else

Response: The poor economy has actually helped us. One of the few advantages of a down economy is that more qualified applicants are available for open positions. While we should always be sure we are hiring the best person for the job and a person who has a high probability of success in the job, having a larger applicant pool provides us the luxury of being even more selective.

Now more than ever, we need assessment tools to help us sort through the applicants and identify those that have the best chance of success. We need to take the time to make the right decision, without being concerned about losing a candidate because we require them to go through an assessment process.

In fact, we have found that many applicants (who are now employees) viewed our organization more favorably as a result of having gone through a rigorous selection process. Who doesn't want to become a member of an "exclusive" club? We also believe that it honors our existing workforce to not just allow anyone into the camp and expect good folks to work with those who are not the best.

It's too inconvenient and time-consuming to ask an applicant to drive to a district office or testing location to take an assessment. We need them to start right away.

Response: The assessment is part of a process to screen in the very best, which includes a physical, drug screen, interview and background check. The test will fit nicely into the time space required to be in compliance with the other screening requirements.

Not taking the time ensures the continuation of higher levels of turnover, more training investment and a significant portion of the workforce always ramping up to cover those who are exiting. The assessment changes this dynamic significantly.

The assessment will take control away from me in making hiring decisions. What if I really want to hire someone but the assessment says I can't?

Response: As the positive impact of less turnover and higher productivity takes hold, the candidate pool will be populated with more qualified candidates from which to select. If the assessment results suggest a candidate is not a good fit, the manager will have several other qualified candidates from which to choose.

Our experience with other assessments has been that, as managers see the positive impact from using the assessments, they place more trust in the results and quickly embrace it as an effective tool to help them make more informed decisions.

With more than 2,000 certified interviewers and hiring managers in our field organization, consistent standards are required to ensure we align with our brand promise, are in compliance with numerous regulations and that we build teams that perform and that are retainable.

Does the assessment really work? I'm pretty good at reading people and generally know who I should and should not hire.

Response: It has been a challenge to instill patience in our field managers when they are in need of an additional person and there are customers and cars waiting to be serviced.

Additionally, it has been a challenge to convince them that an assessment will help them make more informed selection decisions, and not take away their control.

However, our hiring success prior to using assessments was less than stellar, although the success rate varied across our 2,300 stores. Too many new hires in the technician/mechanic position left within the first six months on the job, so we were always looking to bring in new technicians.

We needed to show our field managers that more patience and care in the selection of technicians would pay off for them in the long run through lower turnover and greater productivity, leading to fewer open positions. To do this, we needed to demonstrate the value of assessments in a language they understood -- that is, the way assessments could help them grow their business.

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We believed that a clear demonstration of the value of assessments to business outcomes would allay most, if not all, of their concerns.

To demonstrate the value of our assessments for the technician position, we conducted, with the help of our vendor-partner APT, a comprehensive validation study. For test developers, our approach would be referred to as a "predictive, criterion-related validation study."

This study also provided our legal defensibility in the event our selection processes are challenged under Title VII. The general steps included:

1. Conducting a comprehensive job analysis of our technician position -- resulting in a set of critical success factors and knowledge, skill and ability requirements.

2. Administering an "experimental" assessment battery to a sample of new hires over a one-year period -- not using the assessment scores in the hiring decisions. Our technician assessment included both a cognitive (general mental ability) test and a conscientiousness test.

3. Collecting retention (turnover) and productivity data on the new hires three to six months into the job.

4. Correlating assessment scores of the new hires with their retention and productivity data.

5. Finalizing the assessments based on the correlations -- removing those test items that did not differentiate new hires on retention or productivity.

From this validation we found some interesting relationships.

* Those new hires scoring in the top quartile on the assessment were 20 percent more productive than those scoring in the bottom quartile

* Those scoring in the bottom quartile were 4 times more likely to turn over within the first 90 days on the job.

And, since we knew actual out-of-pocket costs associated with bringing a new hire on board (about $2,300 per hire), we were able to convert the differential turnover rates into a dollar amount. We conservatively estimated we could save $1.5 million in turnover costs by using the assessment and avoiding hiring those applicants in the bottom quartile.

We used the results of the validation study to demonstrate to field managers, in their terms, the value of assessments to their business.

Typically, the outcome of a validation study is a correlation coefficient. We did find high correlations between the assessment scores and retention and productivity data; however, we did not believe a correlation would have much meaning for our field managers, and would not make a compelling story for the value of assessments.

Demonstrating the relationship between assessment scores and retention and productivity for a large sample of new hires, however, did make a compelling argument and went a long way toward establishing buy-in for the new assessment program.

We were fortunate to have objective, readily available productivity data for our technician position and recognize that performance measures for other types of job are often more difficult to obtain.

However, turnover can be objectively measured for all job groups, and the cost of turnover can be fairly easily calculated or estimated. Other potential performance measures include quality, sales, customer satisfaction/complaints, and supervisor ratings of performance.

In sum, the important point is to demonstrate the value of assessments to managers in terms they understand and view as important. Only then will you realize the full potential of your assessment programs.

Ron Tepner, the vice president of human resources for Bridgestone Retail Operations, headquartered in Bloomingdale, Ill. Daniel Lezotte is Darien, Conn.-based APT's vice president for the Midwest Region.

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