Four clear advantages of science-driven talent acquisition
Over the past few decades a quiet revolution has taken place in corporate America.
The way companies build their value has changed. In 1975, the value of an S&P 500 company was on average made up 83% of tangible assets, with only 17% of its worth coming from intangibles. Today that figure is reversed, with 87% of an S&P 500 company’s value now coming from intangibles. Those intangibles include brand value, patents, and unique processes, but they are dominated by one particular asset: an enterprise’s people.
It’s a huge shift, and it poses a particular question: If people have become so important to companies over the past forty years, why have recruiting methods remained almost unchanged?
Traditional acquisition relies on résumés, interviews, and a gut feel for candidates. It has been in use as long as organizations have been engaged in recruitment.
It is also ineffective.
The traditional approach to recruitment has not kept up with changes elsewhere in successful modern enterprises. In contrast to the data-driven approaches these organizations take elsewhere, from sales to operations to marketing, recruiting in the traditional way remains unchanged. It is, for the most part, a hit-and-miss approach where success is always unpredictable and never reproducible.
There is an alternative – a scientific approach that uses not candidates’ superficial presentation of their achievements in a résumé, but instead works with their fundamental behavior. Infor’s analysis of 39 behavioral characteristics has over 15 years been shown to deliver a reproducible method of successfully matching candidates to target roles.
What advantages does this scientific approach to recruitment have?
Bottom line impact
The first impact of a scientific approach can be seen on the bottom line. When Macy’s adopted this approach for sales staff, they saw average sales-per-hour increase by 27%. Another major retailer saw staff turnover drop by 28.9% using this method. Across 17,000 employees, that’s a considerable savings. Figures like these are replicated across a wide range of sectors including retail, healthcare, and manufacturing. Even The Cheesecake Factory found that recruiting in a non-traditional way boosted waiting tips by 44%.
Discover your diamonds
Finding the right candidate for the role is not just about onboarding talent from outside the organization. It also has a crucial role to play in unearthing diamond talent already on the payroll. There are two benefits to this. First, research shows that hiring internally both reduces staff churn and boosts employee engagement.
The other impact: recruiting internally reduces the time to hire. Because the data for candidates is close at hand within the software, this cuts out the entire process of advertising for the position, while instantly highlighting candidates who are both culturally adapted to the company as well as being a good fit for the role. It’s faster, cheaper, and more effective.
A scientifically-based approach to recruitment means candidate management software can suggest interview questions designed to explore the candidate’s behaviors which are most divergent from the role profile. This provides a finely-tuned opportunity to explore how fit for the role candidates actually are. The organization can explore where a candidate appears to offer a less strong fit, and the candidate can express how their experience and attitude would fit the role.
Companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above national industry medians, according to McKinsey’s Why diversity matters. Gender-diverse companies are 15% more likely to outperform their peers.
How do you boost the diversity of your workforce? Infor’s own study involving 50,000 individuals in multiple industries, including restaurant, retail sales, call centers, and hourly warehouse roles suggests an answer: Hire according to the data, not using traditional methods. By using a scientific approach, the hiring rate of minorities increased by 26.7%. That’s over a quarter more well-qualified candidates, hired into roles where they will excel.
Now, more than ever, enterprises rely on people to drive the success of the business. As other functions, from operations to marketing, base their approach increasingly on data, a science-centric method for talent acquisition has become a must. With it, organizations can consistently hire candidates who will best fit their roles, opening up a competitive gap between themselves and those still using traditional methodologies.
Jill Strange, Ph.D., Director, HCM Behavioral Science
- Talent Management
- North America