The real value of predictive hiring lies in the zone of trade-off between efficiency and effectiveness
Adoption of predictive techniques is likely to pick up in the coming months, both while hiring external candidates and recruiting internal candidates
The common sentiment among recruiters in India is that they grapple with basic hiring challenges and hence, predictive hiring is not among their list of priorities. At the same time, recruiters are looking for low-cost and efficient processes for hiring. While in the West, application of predictive techniques have been mainstream since long, it is only picking up now in India. Detractors of predictive techniques argue that their talent acquisition team has much more pressing problems such as sourcing pressures, costs, and talent market unpredictability. An October 2014 roundtable organized by People Matters and global consulting organization Aon Hewitt reveals that opinions about the value and need for predictive techniques among Indian talent acquisition leaders is divided. While some intend to make it an integral part of their hiring processes in the coming months, several others are on the fence about whether the investments will yield the desired value or not.
New tools and techniques are coming up in the Indian market to assess if candidates will stay and what will be their impact in the company. These tools and techniques are either aided by technology or exist in the form of intensive offline psychometric assessments. Besides that, social media is playing a central role in enabling recruitment teams predict the future of their new recruits. Companies are also using social media heavily in post-hiring processes as well, including background and reference checks. In the face of these developments, one cannot help but wonder if predictive hiring is really a buzzword, or if it will ultimately be able to connect hiring with long-term business impact. It is essential to deconstruct the predictive hiring puzzle that talent acquisition leaders in India look to address – value of predictive hiring, the right predictive model, and tools that enable valuable predictive insights.
Efficiency versus effectiveness
If we look at the trade-off between efficiency and effectiveness, it may not always be desirable to maximize both. High efficiency can be attributed to a highly mature process where the technology and subsequent activities are well-defined and standardized. On the other hand, a highly effective process could be attributed to higher level of customization for ensuring the right fit. While hiring for bulk, a process that maximizes effectiveness could escalate costs beyond prohibitive levels. Bulk hiring processes, therefore, rely more on efficiency rather than effectiveness. Hiring for senior levels in the organization, on the other hand, does not rely so much on the efficiency of the process as it does on the effectiveness of selection.
While talking of efficiency, companies talk about cost per hire most of the time. In effect, efficient talent acquisition processes answer concerns about whether the process is lean and just-in-time. Effective hiring processes rely on whether they improve retention numbers and lead to better customer service. Effectiveness tries to answer if the hiring is for the right competency and culture fit. The real value of predictive hiring lies in the zone of trade-off between efficiency and effectiveness. Before investigating tools and techniques, it is first important to understand which factors can predict the future of talent more accurately.
The predictors of talent
While in other geographies, predictive analytics is an established practice, it is yet to become mainstream in India. The tide is changing and an increasing number of companies are looking to apply some form of predictive modelling to augment their hiring process. While many tools exist, it cannot be denied that identifying prediction parameters is a highly company-specific process. It is still interesting to note what leaders in India think about which factors predict talent outcomes more accurately than others.
Many talent acquisition leaders tend to believe that there is a very large overlap between competencies and values. Competencies, on many occasions, lead to measurable behaviours. Talent acquisition leaders can greatly benefit from tools available in the market to measure culture fit by assessing behaviours. Behaviours can be assessed through models either in the form of written tests or even through targeted assessment questions during interviews.
Many companies have assessment centres to assess behaviours. Companies administer these assessment centres during the induction phases of newly hired candidates and they have proved as excellent predictors of “fit” indicators such as culture fit, capability fit and team fit.
Social media behaviours are also widely used as tools to predict behaviours and attitudes of candidates. While some companies do employ external consultants, many conduct such analyses in-house. Recruiters predict behaviours by assessing the overlaps between a candidate’s professional and personal lives, occurrences of mismatch between projected and perceived personalities and sentiment analyses. Social media behaviour is widely-used predictor of candidate behaviour among recruiters.
Many companies approximate future value of talent based on past performance. In fact, past performance is used as the basis of predicting future success of employees and candidates. At the same time, leaders do recognize that it is more important to assess potential rather than view past performance. This is especially true for talent prediction in senior-level roles and nine-box assessments and assessment centres are considered useful investments during recruitment for leadership roles. For junior and entry-level roles, there are several steps that an organization could do upstream even before actual screening processes. Several companies across industries consider their campus-based initiatives as part of their recruitment activities for the year. These campus initiatives besides identifying talent can also be used to predict what type of talent from institutes fit better into which part of the business. Some progressive companies, especially in the hotel industry in India, involve not just students as part of their campus program but also the faculty. These companies even invite faculty to visit their premises and conduct some operational activities and assessment of their knowledge and aptitudes provide a sense of how students from these campuses could add value to the organization.
Technology can play a pivotal role during prediction initiatives for an organization. It is, however, important to note that while most parts of a technology process are outsourced, the design should inarguably be retained in-house. Companies visit social profiles of candidates to conduct individual elements of their assessment. For instance, some companies visit social profiles of candidates to assess culture fit through various indicators such as the individual’s social and personal preferences, her/his views and opinions about personal and macro events and the type of communities and groups the candidate is part of.
Companies can effectively use various tools and techniques to make their hiring process strike the right balance between effectiveness and efficiency. For example, companies can use structured interviews which have moderate predictability but lead to high costs. Structured interviews are more appropriate while hiring for middle management candidates. Other tools include ‘telephonic role plays’ which are essentially 15 minute role play interviews over the telephone. This is low cost, but better than shortlisting based on CVs. Another key tool which companies could use is a ‘virtual assessment centre’ where technology could be used to do psychometric, aptitude, and online case assessments. While individually, these assessments can turn out to be expensive, technology presents a great opportunity of combining and administering them at a much lower cost. A company, therefore, increases effectiveness of these process while at the same time, keep costs low.
Adoption of predictive techniques is likely to pick up in the coming months, both while hiring external candidates and recruiting internal candidates. Given the number of both online and offline tools available in the market, it definitely looks like predictive analysis has become more than just a buzzword. There are several types of predictive models available to hire candidates at all levels and for all positions, beginning from campus hiring to senior leadership hiring. It will be useful for organizations to start thinking about how they can use predictive techniques at every stage and type of the recruitment process.