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ROI and
the Talent Acquisition Pipeline
Jonathan M. Canger
Verizon Wireless
[email protected]
USF HR ROI 2007 Conference
Tampa, FL
February 15, 2007
A Biased, Condensed History of the World (of HR)
1. Industrial Revolution (late18th Century)
- First factories with large #s of workers. Labor viewed as a ‘commodity’
2. Scientific Management /Engineering (Late 19th Century)
- Frederick Taylor ‘time and motion’ / industrial engineering studies.
3. Industrial Psychology (Early 20th Century)
- Hugo Munsterburg applied new science of Psychology to workplace.
- World War I & Testing – US Army ‘Alpha’ and ’Beta’ classification tests.
4. Human Relations Movement (1920s)
- Western Electric ‘Hawthorne Studies’; Morale & Satisfaction Research.
5. Globalization & Technology (1980s)
- Downsizing; M&A ‘s – People as largest ‘expense’.
6. HR as a Business Partner/Driver (1990s-today)
- Workforce 2000, Demographic Shifts, Globalization, Technology
- McKinsey ‘War for Talent’/ ‘Employer of Choice’
- Pfeffer, Huselid, Ulrich, Watson-Wyatt – ‘HR drives business success’
‘Not So Fast…’ View From MBA’s
1. Some Very Successful Companies have Some Dubious HR Practices
2. Some Not-So-Successful Companies Received HR-Related Awards
3. Companies Known For the Most Extreme HR Programs Almost All Died
4. Some Successful Companies Cited Their Need to ‘Cheapen’ Their HR Practices
5. Some Firms Completely Outsource HR
6. Some Firms Don’t Have HR
Today we’ll focus on an area that’s been shown to be related to business
success in the Watson Wyatt and other HR-ROI research studies
AND one in which I/O Psychology has been working for decades:
Employee Selection
I/O Psych Selection Metrics Not The Language of Business
•Validity
(relationship between
scores on test and scores
on job performance or
turnover)
•Expectancy
(change in ‘% superior’ or
some other category of
employee)
•Utility
($ value of change in an
employees’ performance)
Testing is only one step in a process…
Staffing Process
Telephone
Prescreen
Telephone
Interview
Computer
Based
Simulation
Supervisor
Structured
Interview
HR
Structured
Interview
Job Offer
Background
Check &
Drug Screen
…which Is fed by Sourcing...
SOURCING
Staffing Process
Telephone
Prescreen
Telephone
Interview
Computer
Based
Simulation
Supervisor
Structured
Interview
HR
Structured
Interview
Job Offer
Background
Check &
Drug Screen
..whose output (new employees) is oriented and trained…
SOURCING
Staffing Process
Telephone
Prescreen
Telephone
Interview
Computer
Based
Simulation
Supervisor
Structured
Interview
HR
Structured
Interview
Job Offer
On-boarding Process
OnBoarding
Training
Orientation
Background
Check &
Drug Screen
…and finally delivered to the business…
SOURCING
Staffing Process
Telephone
Prescreen
Telephone
Interview
Computer
Based
Simulation
Supervisor
Structured
Interview
HR
Structured
Interview
Job Offer
On-boarding Process
OnBoarding
Training
Orientation
Background
Check &
Drug Screen
…to subsequently do things which create value or havoc.
SOURCING
Staffing Process
Telephone
Prescreen
Telephone
Interview
Computer
Based
Simulation
Supervisor
Structured
Interview
HR
Structured
Interview
Job Offer
On-boarding Process
OnBoarding
Training
Orientation
Performance Outcomes
1.
Stay or Leave
2.
High or Low Job Performance
3.
Good or Bad Citizenship Performance
4.
Low vs. High Absenteeism & Tardiness
5.
Good vs. Poor Customer Service
6.
Follow or Ignore Policies and Rules
7.
Embrace or Block Change
8.
Recommend or Badmouth Company’s Products and Services
9.
Recommend or Badmouth Company as a place to work
Background
Check &
Drug Screen
Each Step Has Costs, and Impacts Subsequent Steps and Outcomes
SOURCING
Staffing Process
Telephone
Prescreen
Telephone
Interview
Computer
Based
Simulation
Supervisor
Structured
Interview
HR
Structured
Interview
Job Offer
On-boarding Process
OnBoarding
Training
Orientation
Performance Outcomes
1.
Stay or Leave
2.
High or Low Job Performance
3.
Good or Bad Citizenship Performance
4.
Low vs. High Absenteeism & Tardiness
5.
Good vs. Poor Customer Service
6.
Follow or Ignore Policies and Rules
7.
Embrace or Block Change
8.
Recommend or Badmouth Company’s Products and Services
9.
Recommend or Badmouth Company as a place to work
Background
Check &
Drug Screen
An Example of the Cost Side of The Equation
If 1,000 candidates are delivered from sourcing
Job
Offer
Background
Check
67%
92%
74%
pass
rate
acceptance
rate
pass
rate
Prescreen
Phone
Interview
Computer
Simulation
Supervisor
Interview
HR
Interview
84%
61%
47%
59%
pass
rate
pass
rate
pass
rate
pass
rate
1000
840
512
240
141
95
87
$10
$25
$30
$33
$33
$20
$100
$10,000
$21,000
$15,360
$7,980
$4,635
$1,900
$8,700
The above process will yield 64 new employees to on-boarding,
at a cost of $69,575, or $1,087 per hire
Note: Above number are for illustrative purposes only. They do not represent actual Verizon Wireless Results
Re-engineered Process
Computer
Biodata
Screen
49%
Phone
Interview
Enhanced
Simulation
Joint
Interview
52%
66%
61%
pass rate
pass rate
pass rate
Job Offer
93%
Background
Check
86%
acceptance
rate
pass rate
pass rate
1000
490
255
168
102
95
$0
$25
$30
$66
$20
$100
$0
$12,250
$7,650
$11,088
$2,040
$9,500
Note: Above number are for illustrative purposes only. They do not represent actual Verizon Wireless Results
Re-engineered Process
If the same 1,000 candidates are delivered from sourcing
Computer
Biodata
Screen
49%
Phone
Interview
Enhanced
Simulation
Joint
Interview
52%
66%
61%
pass rate
pass rate
pass rate
Job Offer
93%
Background
Check
86%
acceptance
rate
pass rate
pass rate
1000
490
255
168
102
95
$0
$25
$30
$66
$20
$100
$0
$12,250
$7,650
$11,088
$2,040
$9,500
Note: Above number are for illustrative purposes only. They do not represent actual Verizon Wireless Results
The new process will yield 81 new employees to on-boarding,
at a cost of $42,528, or $525 per hire –
And if you only needed 64 (vs. 81) employees,
you can save more $$$ by reducing sourcing costs, too.
Affecting the Performance Outcomes: The ‘Deep Dive’
Which Enhances Outcomes And Reduces Hiring Needs
SOURCING
Staffing Process
New
Telephone
Prescreen
Biodata
Telephone
Interview
Computer
Based
Simulation
Supervisor
Structured
Interview
HR
Structured
Interview
Job Offer
On-boarding Process
OnBoarding
Training
Performance Outcomes
1.
Stay
2.
High Job Performance
3.
Low Absenteeism & Tardiness
4.
Good Customer Service
5.
Recommend Company as Place To Work
Orientation
Background
Check &
Drug Screen