show me the money! choosing a pre-employment assessment partner
TRANSCRIPT
Show me the Money!
Choosing a Pre-employment Assessment Partner
Charles A. Handler, Ph.D.January 18, 2012www.Rocket-Hire.com
Today’s Objective
Provide information and process to help ensure you have success with pre-employment assessment
Teach you that success is an investment in understanding your needs and choosing a vendor who represents the optimal solution for meeting them
No vendor names will be used!
Agenda
1. Assessment and its value prop2. Assessment market overview3. Choosing the right vendor*4. Questions
Part 1: Assessment & its value proposition
What is Assessment?
Any method used to provide data/information about a candidate’s qualifications and potential for performing a job or his/her potential to perform the requirements of the job.
So, it’s a predictive tool to support informed decision making!
Believe it or not!- interviews, resume reviews, screening, and background checks all are considered to be assessments
Why does assessment work?
Leverages prediction
Created using a scientific method
Applied systematically to create standardized process
Provides data to support differentiation between candidates
What assessment tells us
FuturePerformance
Job Fit: What do they want to do?Environment Fit: Where do they want
to work?
Personality MeasuresAbility Measures
“What can they do?”
“What do they want to do?”
“What have they done?”
Experience Measures
Predictive Accuracy: AKA validity
Job Performance Predictor Content
Zero Predictive Accuracy
Moderate Predictive Accuracy
Job Performance
Predictor Content
High Predictive Accuracy
Job Performance
Predictor Content
0 value
useful value
strong value
80-20: Top and bottom performers
Roster Output Average
Sally 421Bill 402Erin 389Nichole 374 Top 80%Jose' 370 347Aundra 293Cyndi 276Emil 254Yuliya 237 Bottom 20 %George 229 233
Test scores can differentiate between high and low performers.
The higher the validity, the better job the test does at identifying top and bottom performers.
Screening Out
Screening In
The funnel model
Without assessment….
Information overload
Low quality information
No standardization Not always job
related
With assessment……
Process efficiencyCandidate qualityOwn the employee lifecyclePredict the “stuff” needed to
fulfill business drivers Invest in human capitalProvide legal defensibility
What assessment CAN do
Provide extra data points about an applicant to help support the decision making process
Provide a standardized way to gain insight into applicant qualities that aren’t always apparent
Provide a way to support quality of hire Provide supporting evidence for trends in an
applicant’s data Help identify developmental needs from Day
1 Weed out the worst applicants while focusing
on the best Provide real ROI
What Assessment CANNOT do
Tell you all you need to know about an applicant Solve all your problems Make decisions for you Guarantee applicants will be successful Be 100% effective Take the place of an expert who can see the big
picture
Valued outcomes
• Job performance• Increased sales• Tenure• Reduced absenteeism• Reduced theft
• And more!!!
• Customer service• Brand support• Leadership• Bench strength
What does value look like?Tangible outcomes
o Reduced turnovero Reduced absenceo More saleso Increased customer sat
Less tangible outcomeso Bench strengtho Developmental planningo Brand buildingo Org culture
Bottom line impact
300% Higher Performance Ratings
$55 Million Retained Revenue
46% Reduction in Turnover
$78 Million in Reduced Shrinkage
$120 Million in Additional Overall Sales
Increased Successful Graduate Hires by 73%
Reduced Time to Hire by 3 Weeks
18 Additional Days of Productivity
Employees 4 Times More Reliable
$170 Million in Additional Collections Revenue
57% More Likely to be Promoted
Employees 3 Times More Client-focused
Common assessment tools
Matching tools Qualifications screening Biographical history data Personality tests Work values/ “fit” Cognitive tests Situational judgment tests Simulations Integrity tests Structured interviews Knowledge and skills testing Assessment centers Executive assessment
Screening Out
Screening In
The funnel model
Part 2: The assessment market
Who wants to sell you assessments? Matching companies- work at the job search level, use database
of assessed candidates, or assessment info
Test publishers- Sell tests delivered via a simple system, do not alter content to match situation
Profilers- Use same set of content in all situations, benchmark vs. existing employees
Consulting firms- Work with firms to customize an approach, most often on a strategic level, often resell tests created by others
Solution providers- Use technology infrastructure to customize solutions for clients, often embed assessment within a suite of other products
Talent management firms- Offer assessment as an add on to other post-hire services.
Non-traditional vendors- Usually based on some proprietary or revolutionary idea, often deviate from acceptable range
Evolution of Test Use
Solution Providers
Test Publishers ProfilersConsulting
Firms Matching TM Non-Traditionals
2001-20101 – 25 Million
Test Publishers
Consulting Firms Profilers
1950-2000500k – 1 Million
Non-Traditionals
Solution Providers Matching Consulting Test
2011-202025 – 50 Million
Non-Traditionals
Talent Management Profilers
Differentiating vendors
Key parameters of differentiation
1. Content2. Implementation/Configuration model3. Technology4. Contextual products/services5. Scalability6. Business partnership7. Cost
1. Assessment Content
Quality- Do they offer proven content that has a sound theoretical basis and data to show it works?
Variety- Do they offer a suite of complimentary assessments or do they offer only one type?
Flexibility- Can the content be modified, customized, adapted?
Usability- Is the content user friendly, engaging?
Relevance- Do they offer content that leverages specific industry experience, knowledge?
Market map: Content
Non-Traditional
Solution ProvidersTest Publishers
Profilers
Talent Management Firms
Matching Firms
Consulting Firms
Low
Var
iety
High
Quality
High
Low
Key questions- Content
What are you trying to predict?
Are you looking at a one test or an entire process?
How unique is your situation?
What is the level of the job for which assessment is to be used?
Are you looking to hire for potential or for immediate ability to do the job?
What type of applicant volume are you experiencing?
2. Implementation/Configuration models
Matching- Uses assessments to help align individuals and with jobs, relies on database of information as value proposition
Profiling- Uses one set of content and benchmarks vs. existing employees to support hiring to a profile
Off the shelf tests- Uses content that has been shown to work in specific situations based on general data, not dialed in to local situations
Light customization- Uses technology system to align assessment content to match key parameters of a situation
Full customization/Local configuration- Work within a specific context to research key parameters and create or align content to ensure high degree of relevance
Market map: Speed vs. Accuracy
Non-Traditional
Solution Providers
Test Publishers
Profilers
Talent Management Firms
Matching Firms
Consulting Firms
Low
Acc
ura
cy
High
Speed
High
Low
3.Technology
Innovation- Is technology used to do things differently?, does content leverage technology?
Flexibility- Does the system allow for easy configuration?, access to all content in one place
Usability- Does the system make it easy for end users to configure and make decisions?
Reporting- Does the system have the ability to customize reports, are reports easy to understand?
Analytics- Does the vendor support advanced analytics?
Market map: Technology
• Flexibility• Integration• Content
Innovation• Advanced
Analytics
Profilers Non-Traditional Talent Management Firms
Test PublishersConsulting Firms Matching Firms
Solution Providers
Low High
Sim
ple
Del
iver
y
Technology
Co
mp
lex
Dep
loym
ent
4. Contextual products and services
Post-hire/Talent management- links to development, performance management, training
Payroll/Tax- Additional HR related data and services
Recruitment/Sourcing- Services to find and vet candidates
OD- Teambuilding, leadership development, organizational configuration, survey research
ATS/HRIS- Other HR related technology systems
Market Map: Contextual Products & Services
Test
s O
nly
Variety o
f Pro
du
cts & S
ervices
Profilers
Matching Firms
Non-Traditional
Talent Management Firms
Solution Providers
Consulting Firms
Test Publishers
5. Scalability
Enterprise level- Can the vendor handle the variety of jobs, the volume?
Global- Does the vendor have global capacity? Content and support that works globally?
Distributed- Can the vendor handle hiring operations in multiple, distributed locations account for differences between them?
Speed of implementation model- Is the vendor agile?
Technology model- Does the vendor have the technology needed to support large scale?
Data integration- Can the vendor link your data to help you gain insight across many areas of the business?
Scalability
TechnologyResourcesImplementation Strategy
Market Map: Scalability vs. Strategic Value
Non-Traditional
True Business Partner
Able
to S
upport
Ente
rpri
se
Glo
bally
Hard
Tim
e S
erv
ing
En
terp
rise
Helps with Basic HR
Consulting Firms
Solution Providers
Talent Management Firms
Test PublishersProfilers
Matching Firms
Sca
lab
ilit
y
Strategic Value
Low
High
Low High
6. Service level
Personal service- How responsive is the vendor?, how available?, do they make an effort to really understand who you are?
Flexibility- Can the vendor adapt to your
needs? Creativity- Does the vendor work creatively,
think outside a script?, or can they follow it if need be?
Business results focus- Does the vendor tie their work directly to results, speak the language of business leaders?
Bandwidth- Does the vendor have the infrastructure and resources to meet your needs?
Market map: Service level
Matching Firms Consulting Firms
Solution ProvidersTest Publishers Profilers
Talent Management Firms
Non-Traditional
Pro
cess
or
Service Level
Low High
Par
tner
7. Cost
Should not necessarily be the #1 parameter in many situations
More accurate prediction generally costs more
Vendors have a variety of pricing models
Cost includes set up/configuration, use, and ongoing program evaluation
Most vendors moving away from a cost per test model
You get what you pay forIn
vest
men
t: T
ime
& M
on
ey
Results
Acc
ura
cy
Cost
High
Market map: Cost vs. Accuracy
Non-Traditional
Consulting Firms
Talent Management Firms
Solution Providers
Test Publishers
Matching Firms
Profilers
Low
Low
High
Part 3: Choosing the right partner
Process used to select assessment
From: Rocket-Hire/ERE/HR.com survey 2011
Purchase and process
Assessment is most often purchased informally
Assessment purchase most often does not involve experts
This often leads to a lack of optimization and failure to follow best practices
Think Optimization!
Many vendors can offer a workable solution
Not all solutions are created equal and what seems similar can deliver very different results
It is worth the time and effort to carefully evaluate your options using a proven methodology that allows you to understand and balance your priorities
Ideal Fit
Compromise on 1-2
Compromise on > 2
• Content: Alignment/Relevance/Quality
• Config model• Technology Fit• Contextual Services• Scalability• Business Partner• Cost/resources
Optimal Match ($)
Lower Value
Lower Value
High Value
3 steps to success
Discovery Research Decision Making
Key Vendor Parameters
ContentConfig ModelTechnology
Contextual svcsScalability
Business PartnerCost
Success
Parameters anchor process
Make this process your own
It is most important to: Clearly id valued
outcomes
Do your homework
Collect input from experts
Evaluate as a team
Your goals and objectives determine how rigorous of a process you should undertake
You can generalize from the steps provided
Step 1: Discovery
Goal is to fully understand parameters required to make assessment a successful business process
It is essential to complete this step before evaluating any vendors
Don’t let the cart drive the horse
Linking strategy to results drives success
Create a cross functional team
Create your charter
Your charter
Dictates what you need and why Dictates clearly where assessment fill fit within
process and talent management strategy Clearly defines business contribution from
assessment Dictates who will help evaluate options Dictates timing till ramped up Dictates budget parameters Define hiring process
Step 2: Research
Goal = Use your charter and your team to ID a final set of vendors who best meet your needs
Vendor research process
Initial research
Goal is to identify domain of vendors for more in-depth review Requires cutting through the crap to figure out what each
vendor really does and how they are differentiated
Helps to classify vendors and understand the tradeoffs required by their approach
Collect the info needed to understand where they land on all key parameters
Who wants to sell you assessments? Matching companies- work at the job search level, use database
of assessed candidates, or assessment info
Test publishers- Sell tests delivered via a simple system, do not alter content to match situation
Profilers- Use same set of content in all situations, benchmark vs. existing employees
Consulting firms- Work with firms to customize an approach, most often on a strategic level, often resell tests created by others
Solution providers- Use technology infastructure to customize solutions for clients, often embed assessment within a suite of other products
Talent management firms- Offer assessment as an add on to other post-hire services.
Non-traditional vendors- usually based on some proprietary or revolutionary idea, often deviate from acceptable range
Differentiating vendors
Key parameters of differentiation
Content Implementation/Configuration model Technology Contextual products/services Scalability Business partnership Cost
Where to find vendor info
Initial data collection
Review website Make contact Ask pre-defined qualifying questions based on key
parameters Ask about examples of results for your
industry or for specific jobs of interest Request technical manuals (not just product
brochures)
Narrow the list Review data collected Structured RFI (formal or informal) Discuss as a group Begin to track pros and cons Result of process should be list of 3-5 vendors
Red flags
Exaggerated claims of impact (90% accurate) Failure to listen well, provide correct info Lack of product that directly meets your needs Inability to tell what they do after discussion with
representative and review of materials Poor customer service level No technical documentation No I/O psychologists Lack of expertise in your industry Trash talking
Step 3: Decision making
Decision making
Goal = Thoroughly evaluate finalist vendors and understand how they differ
Use this opportunity to:▪ Eliminate any surprises▪ Choose the partner who will best deliver the
results dictated in your charter▪ Understand key tradeoffs/compromises related
to each vendor▪ Fully understand a vendor’s capabilities and
approach▪ Learn how they have served others similar to
you
RFP & Demos
Does not have to be formal to be effective
Collect data on key parameters and charter
Provides a structured way for all team members to evaluate vendors on key parameters
Provides data on which to make decisions
Allows you a chance to see how well vendors listen
Key action
Have all team members, including end users take the assessments
Final decision
Review pricing and service level Take reference checking seriously Put vendors on the spot! Use scoring from team evaluation
process Involve team members Begin shifting gears to contracting and
implementation mode
Takeaways
There is no free lunch!
No matter what the need, it is worth it to do your homework Many vendors can help you but there is ROI in optimizing to your
unique needs No need to do it all at once, choose one area and gain proof of
concept Make the evaluation process your own- adjust the level of rigor
based on your needs Assessment is complex – it pays to include an expert
Resources
Society for Industrial Organizational Psychology (SIOP) I/O user groups on LinkedIn SHRM Rocket-Hire- Buyer’s Guide
About Charles Handler/Rocket-Hire
Industrial/Organizational Psychologist
Selection systems specialist
Vendor neutral Strong statistical
training Futurist and
technologist Practical guy who
loves ROI!
