Recruiting Excellence

I recently read a blog on LinkedIn (Henrik Ørholst) where he refers to an article from 2015 with the headline: Why New Hires Fail (Emotional Intelligence Vs. Skills). The article is based on a study carried out by Leadership IQ. The first part of the article says: "According to a study by Leadership IQ, 46% of newly-hired employees will fail within 18 months, while only 19% will achieve unequivocal success. But contrary to popular belief, technical skills are not the primary reason why new hires fail; instead, poor interpersonal skills dominate the list, flaws which many of their managers admit were overlooked during the job interview process". As a matter of form I should point out that I will not challenge the survey, the underlying methods or the results.

The results in the survey are by no means unique (when it comes to the error rate). There are a lot of other surveys and reports supporting similar results. An example is the study by Bo H. Eriksen, Associate Professor and PhD, published in 2013 concluding that approximately 40 % of all new hires in small and medium-sized companies in Denmark quit within the first year of employment (with an estimated 200-300,000 DKK turnover loss per quit). The study does not focus/conclude on the difference between technical and emotional skills, more just on bad recruitment competencies and procedures. But former studies from Bo H. Eriksen do show that there are no efficiency gains by hiring experienced people.

Getting back to Henrik Ørholst's blog – it provoked a lot of comments! No wonder – it is a very important topic to address and discuss, so thank you for bringing it up Henrik. What puzzled and actually frustrated me quite a bit was the content of the comments. A lot of "I think ...", "It is my experience/I know ...", "We do ...", etc. This is simply not good enough, and in itself the expected simple reason "Why New Hires Fail"! A lot of science supports how recruiting processes should be built and implemented. If hiring managers, HR professionals and recruiters including head hunters followed some basic and in many cases simple methods, it is my hypothesis that the success rate would increase significantly (by 30 % points or more). Below with the headlines: Top 2 Things to Do and Top 2 Myths, and an overall summary, you will find recommendations of elements that can significantly improve the success rate when recruiting.

Top 2 Things to Do ... supported by empirical research

  1. GMA tests
    The by far single most important thing to assess in a recruitment process is the GMA. It is a fact that the element with the highest correlation to future performance is the GMA (intelligence). In the latest study, I have seen, the correlation coefficient is r=.65, meaning that up to approximately 42 % of the variance in future performance can be explained by the GMA factor (for comparison – years of job experience has a r=.16, meaning that that the "explanation power" is less than 3 %). The statistics come from Schmidt, Oh & Shaffer, 2016.

    The bonus of using GMA as a key selection parameter is that it has also a high correlation to what is called job related learning. Who wouldn't like to also hire the employees who will learn most from job training programs and acquire job knowledge from on-the-job experience faster?

    So ... you should use GMA tests! (end of discussion)
  2. Combine the GMA Test With ...
    In the same study it appears that combining GMA tests and integrity tests or employment interviews (being structured or not) or looking into the level of conscientiousness, one can reach a r above .70, meaning that approximately. 49 % of the variance in future performance can be explained.

    So ... in a cost perspective one might just as well go with a test assessing for GMA and conscientiousness – everything can then be handled by a digital solution (read: robot).

Top 2 Myths ... supported by empirical research

  1. Emotional Intelligence ('s a fraudulent concept)
    Emotional Intelligence (referred to as EI as well as EQ) is the new black ... or is it? Let me quote Jordan B. Peterson, Psychology Professor at the University of Toronto: "There is no such thing as EQ. Scientifically, it's a fraudulent concept, a fad, a convenient bandwagon, a corporate marketing scheme". For now there is no research supporting that EQ can be considered a valid psychometric concept. If EQ can be considered to be something, and we look into one of the best documented psychometric tools – 'Big Five', it is at best part of the 'Agreeableness' or 'Conscientiousness' factor. But to quote Jordan again: "THERE IS NO SUCH THING AS EQ. THERE IS NO SUCH THING AS EQ. THERE IS NO SUCH THING AS EQ" (and just for the record – it is quoted fully correct).

    So ... stop thinking that Emotional Intelligence is the thing to go for
  2. Interpreting Personality Tests
    A lot of recruitment processes include personality tests as a part of the full assessment. I have no knowledge of the extent to which personality tests are used. In our company it is part of all recruitment and Executive Search processes, and I have seen articles referring to up to 70 % of all recruitments in Denmark.

    The first thing people should know is that the best tests on the market (used properly) actually only have a validity r of approximately. .12, meaning that only approximately. 2 % of the variance in future job performance can be explained by these. In a test such as 'Big Five' the factor 'Conscientiousness' (approx. 5 %) has the biggest correlation whereas the trait 'Extraversion' has a correlation close to 0.

    So what does all the above mean? It means that the use of personality tests in recruiting should be questioned, or at least challenged, when it comes to capabilities of working with personality tests. Since all 'human involvement' in interpreting test results from a personality test worsens and pollutes an already low relation, everyone should stop trying to 'uncover' what a candidate's personality really looks like – because ... nobody (or at least very, very few) has the qualifications to do so.

    So ... stop interpreting the personality tests. You are simply not qualified. What to do? At best you can build hypothesizes about actual behaviour, test these hypothesizes, and try to build a consistent behaviour picture of your candidate. And it is this picture that you use to match the recruitment profile.

So What is Recruiting Excellence?

First of all – it is a skill, mastering stakeholder management and the art of analysing, listening and challenging.

Second, it is an excellent deployment of simple and approved methods

  • Understand the need (hiring manager should be challenged big time)
  • Know where to source the candidates
  • Create the consistent picture of the candidate – including assessment and basing conclusions on simple methods (e.g. GMA and conscientiousness)
  • Don't go for a hire when you have bad gut feelings – use the assessment to challenge you, when you have good gut feelings.

Want to know more ...? I am right here ...

  • Recruitment
  • Recruiting Excellence