Screening's Sorry State
New research finds that most HR professionals lack confidence in their organizations' processes for screening entry-level hires.
By Andrew R. McIlvaine
The way in which most companies screen and assess candidates for entry level positions may be a disservice to both parties, new research suggests.
The research, based on a survey by the Society for Human Resource Management and Mercer and funded by the Joyce Foundation, finds that only one-fifth of HR professionals feel fully confident in their organization's ability to effectively assess the skills of entry-level job applicants. According to the survey, most employers rely on in-person interviews (95 percent), application reviews (87 percent) and resume reviews (86 percent) to screen candidates despite nearly half the HR professionals surveyed reporting "little or no confidence" in these methods.
"Since application and resume reviews are typically the first line of screening for job applicants, many candidates never even get to the interview," says Mercer's Barbara Marder, senior partner in its Career business. "For individuals who've historically encountered obstacles to entry-level employment, there are even greater barriers in getting past resume and application reviews, as these methods are based on subjective evaluations."
By contrast, relatively few employers are relying on screening methods for entry-level applicants that the study's authors say are more effective, such as selection tests (used by 42 percent), personality tests (13 percent), cognitive ability tests (10 percent) or online simulations (used by only 2 percent).
"Entry-level hiring is ripe for disruptive change, and companies that incorporate more objective methods with scientific support can reap solid gains," says Sameer Gadkaree, senior program officer for employment and joint fund programs at the Joyce Foundation, a Chicago-based nonprofit that works to expand opportunities for low-income Americans.
The Joyce Foundation engaged Mercer to conduct the study because it's tracking a couple of trends among low-income workers that "worry us," says Gadkaree. One such trend is the increasing reliance by employers on the bachelor's degree as a screening tool even for jobs that didn't require a degree in the past -- an obvious hindrance to the nearly 60 percent of Americans who don't have one, he says.
Another concern is the difficulty many low-income applicants report encountering in trying to land an interview with an actual person, he says. "We wanted to learn more about how technology is being used in hiring and the implications of that."
The study reveals that although non-cognitive skills such as reliability, dependability and teamwork are rated more highly than cognitive skills by hiring managers -- this despite technology's prominent role in today's economy -- the screening processes commonly used by organizations don't allow for these competencies to shine through, says Gadkaree. "Good applicants are getting screened out, which results in higher turnover and avoidable costs."
"We know there are tools out there that are better at screening more objectively for these criteria," he says. "We'd like to see more companies make use of tools, such as situational judgement tests, that can get at these qualities and make it easier for low-income workers to land entry-level jobs."
A major problem with screening and assessment, as it's practiced today, is that while most decisionmakers admit skills assessments are important, less than half of organizations use them, says Jim Link, CHRO of Randstad Sourceright.
"Our Workplace Trends Guide finds that 58 percent of companies don't use skills assessments even though 80 percent of hiring decisionmakers believe they're important for the hiring process," he says. Many organizations cite the extra time they can add to the process as a reason for not using them, says Link.
"Yes, skills assessments can increase time-to-hire, but they also increase the processes' effectiveness," he says, citing research by McKinsey that shows integrating behavioral interviewing, skills assessment and background checks will lead to improved business outcomes through better hires.
HR leaders can present a compelling business case for investing in these tools by using data that's easily found, says Link
"One of the most interesting numbers you can look at, and most companies don't, is profit per employee," says Link. "You'd be hard pressed to find that number in any analytical report, and yet it's not that hard to calculate. It'll vary by industry, but it's important to look at so you can determine how successful you are at hiring the right people and ensuring their potential."
The screening process is in dire need of innovation, says Link. Randstad (which is based in The Netherlands) has created an "Innovation Fund" to help startups develop new applications for the HR profession, including screening and assessment tools. The fund, totaling 50 million euros (approximately $60 million), makes four to five investments per year ranging from 1 million to 5 million euros. Those investments have included Checkster, which uses "the science of collective intelligence to improve the hiring process" and Pymetrics, which uses gamification to assess candidates' cognitive and emotional traits.
Mercer is also an investor in Pymetrics, says Marder, who oversees a team that looks for innovative ways to identify and develop talent.
"There's no self-reporting with their gamification tools, unlike personality tests, so the data you collect is objective," she says.
Marder says she's "fascinated" that so few HR professionals express full confidence in their organizations' screening processes.
"To me it reflects that everyone realizes the application and resume reviews they're using aren't terribly predictive and that people who could be great fits are getting screened out," she says.
So why are so few companies using scientifically proven assessments? Marder believes sheer inertia is partly to blame.
"Many companies tend to just do what's been done before and sometimes it requires someone to introduce a new idea and say, 'We need to try this to get better results,' " she says.
Fear of litigation is another factor.
"The litigation risk around certain types of assessments has made some companies gun shy about using them, even though they actually provide the best and most predictive results," says Marder. "What's interesting is that while legal challenges to these tests generate a lot of publicity, the entire screening process itself can be subject to legal challenge but it's easier for plaintiffs to say 'I didn't get hired because these test results knocked me out of consideration' rather than challenge the entire process."
Nearly every commercially available assessment has undergone validity testing, which provides a measure of protection for companies that use them, she says. Furthermore, gamification-based assessments offer an additional layer of protection, given their utilization of objective algorithmic measures, she adds.
"If you have tools that better predict who's going to be a good fit for these roles, turnover should go down dramatically and you'll have big cost savings," says Marder.
The study also revealed what consultant Suzin Sciabarasi says is a "lack of hiring competency" at many organizations today.
"They haven't spent the time necessary for teaching their people how to interview effectively," says Sciabarasi, senior HR consultant at Austin-based VCFO. "And, interviewing and performance reviews tend to be the bane of most hiring managers' existence."
An effective interviewer knows how to do two things, she says: Assess a candidate's job competency and assess their soft skills.
"It's not just determining whether someone can write code, for example, but whether the person can take that code and surround it with those all-important soft skills -- teamwork, critical thinking, mental agility -- that can make that code come alive," she says.
Simulations are also excellent ways to determine whether a candidate has what it takes to thrive in a position -- especially for recent college grads and others with little to no work experience, says Sciabarasi. "Give them several scenarios and see how they react to them -- I don't know of a better way than that to find out how people think."
By creating a strong assessment process for entry-level jobs, says Sciabarasi, HR can help ensure an organization's long-term prosperity.
"Entry-level roles are a wonderful place to size up whether you've got critical thinkers and people with mental agility, but you've got to do a super job at the front end to ensure the folks coming in have the necessary intellectual horsepower," she says.