Build an Interview

Three Companies Cut Turnover with Tests

Sarah Fister Gale

Evaluating candidates’ personalities as well as job skills greatly
improves recruiters’ odds of making successful hires, which reduces
their corporate turnover rates.

By Sarah Fister Gale

Recognizing the fallibility of interviews, an increasing number of
recruiters have added pre-employment assessment tests to their hiring
process. These tests rate the personality and motivation of potential
employees, allowing recruiters to choose candidates according to how
they will fit into the existing corporate culture.

Evaluating candidates’ personalities as well as job skills greatly
improves recruiters’ odds of making successful hires, which reduces
their corporate turnover rates, says Tom DeCotiis, managing partner
of DeCotiis Erhard, a consulting firm in Colorado Springs, Colorado.
That can have a huge impact on the bottom line. When you add up the
money spent on recruiting, hiring time, lost productivity, orienta-
tion, and training,turnover costs are about 150 percent of an
employee’s annual salary. If the average salary in a company with
1,000 employees is $50,000 and there is a 10 percent turnover rate,
the annual cost of turnover is $7.5 million, he says. And a 10 per-
cent turnover rate is considered low for most industries.

Personality assessments give you an unemotional evaluation of a
candidate’s character and attitude -- qualities that are difficult
to judge in an interview alone.

The primary reason for high turnover is bad hiring decisions. When
the wrong candidate is put in a position, the company pours time
and money into someone who will likely leave within months and may
cause irreparable damage in the meantime. In a position where team-
work is critical, a bad hire can affect the morale of the entire
staff. "A major cause of job dissatisfaction and the desire to quit
is the quality of the people you work with," says DeCotiis. If you
can zero in on the best candidates for the job, you have a much
better chance of keeping them and the rest of your staff,which
drives down the cost of turnover. The tricky part is knowing which
candidate is the best fit for your organization’s culture.

"You’ll always find someone with the right credentials, but if they
don’t have the right attitude, they aren’t going to work out," says
Robert Fox, executive vice president of marketing at MindData
Systems, a provider of Web-based evaluation tools, located in Dallas.
Unfortunately, most people are poor judges of character, especially
when the only contact they have is in an interview. "Anyone who’s
bright can phrase their responses according to what you are looking
for." It’s not until they are on the job that their true character
shows through.

Personality assessments give you an unemotional evaluation of a
candidate’s character and attitude -- qualities that are difficult
to judge in an interview alone. These tests don’t rate a person’s
skill level, but rather how he will behave on the job. They evaluate
traits such as aggressiveness, motivation, sensitivity, and the
ability to handle stress. Using the test results, a recruiter can
determine how a person will interact with the existing staff and how
well she will perform on the job.

To make the most of these tests, you have to benchmark your existing
employees by giving them the tests, says Putt Fleming, sales manager
at MindData. "All business cultures are unique. It is necessary to
benchmark high-performers in order to take full advantage of a pro-
filing tool."

Applying your own knowledge of who the top,bottom, and middle per-
formers are, you can use their test results to create a custom
profile of what the ideal candidates will look like. "When you vali-
date test results against your highest performers, you increase your
chance of making a good hire," Fleming says.

Each position will have a different profile of success. For example,
the best salespeople generally rate low on compassion and low on sen-
sitivity, whereas the best managers rate high on compassion and low on
sensitivity, he says. You may interview someone for one position and
realize that his assessment results make him a perfect fit for a
completely different job. "The more data you have on your existing
people and positions, the more useful the tests will be."

But the tests alone, like interviews alone, are not enough to make a
sufficient assessment of a potential candidate. "It’s a mistake to
rely on test scores alone," says Randy Lucius, research director for
an online interview and assessment company based in Atlanta. "They
aren’t foolproof." But if you use them in conjunction with the rest
of your hiring techniques, including behavioral interviewing, skills
tests, and your own intuition, you make a better hiring choice.

"It comes down to money," Fleming says. "By knowing more about the
person that is being considered for a position, you can reduce turnover,
increase productivity, and increase the quality of your corporate
culture. All of this leads to a more favorable bottom line."

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