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    Wednesday
    Apr272016

    Who makes better hiring decisions, man or machine?

    Despite two-plus decades of innovation, billions of dollars spent by organizations on HR/Recruiting technologies, and (adding in this one), 139,927,434 blog posts on the topic, hiring still remains stubbornly difficult, is often lengthy and costly, and all too often results in disaster.

    There are potentially dozens of individual reasons why this sad state of affairs persists in 2016, but I want to talk about just one in this post - the question of whether or not hiring could be improved if we relied upon people (mainly hiring managers) less, and machines, (automated job fit assessments and similar instruments) more. The source of the rest of the data in this post is from a 2015 NBER Working Paper titled Discretion in Hiring by Mitchell Hoffman, Lisa B. Kahn, and Danielle Li.

    In the paper's abstract, the authors set out to answer a simple question:

    "Who should make hiring decisions? We propose an empirical test for assessing whether firms should rely on hard metrics such as job test scores or grant managers discretion in making hiring decisions."
    A pretty good question for sure.

     

    Who (or as we shall see soon what), should have the final, or at least the most influential voice in determining which candidate to hire for a given role?

    According to the authors, hiring is hard and prone to error for two primary reasons. One, resumes, profiles, even interviews are usually not perfectly complete and able to reveal with a high degree of confidence and accuracy who is the best candidate for the job. And two, the people the firm entrusts to make hiring decisions are simply not that good at making these decisions.


    They start with imperfect information, then apply (sometimes subconsciously), there own views, preferences, and biases that may not be congruent to the organization's goals to the decision process.

    Bad information + inaccurate, possibly biased decision makers = way too many bad hires.

    So what might a remedy be to combat the 'bad information' and 'bad decision makers' challenge?

    How about improving the information, (not very controversial, surely), and removing the decision makers (possibly more controversial, as most hiring managers will claim they like to, you know, hire).

    More from the NBER paper on what they did and what they were able to find:

    In this paper we evaluate the introduction of a job test, and develop a diagnostic to inform how firms should incorporate it into their hiring decisions. Using a unique personnel dataset on HR manager, job applicants, and hired workers across 15 firms that adopt job testing, we present two key findings. First, job testing substantially improves the match quality of hired workers: those hired with job testing have about 15% longer tenures than those hired without testing. Second, managers who overrule test recommendations more often hire workers with lower match quality, as measured by job tenure. 

    This second result suggests that managers exercise discretion because they are biased or have poor judgement, not because they are better informed. This implies that firms in our setting can further improve match quality by limiting managerial discretion and placing more weight on the test.

    Less manager input/discretion in hiring led to better hiring outcomes. Across the board in this study.

    A few caveats worth mentioning, (and you should, if you are so inclined, read the entire paper here).

    This study was performed across a dataset of 15 firms hiring for high volume, lower skill kind of roles - think something like data entry, call center, that kind of thing. The kinds of jobs where it is relatively easier to come up with an accurate job test/assessment, and ones where the primary measure of hiring success is often retention.

    Also worth noting is that the researchers controlled for other measures of employee success like productivity, i.e., they were able to determine that when hiring managers overruled the job test scores in making hiring decisions that they were not in fact sacrificing longer tenure for increased near-term efficiency.

    Essentially, for this category of low to mid-skilled service roles, the researchers were able to show that all things being equal, additional managerial input and discretion into the hiring decision process only served to lead to worse hiring outcomes.

    I will close with one more line from the study's conclusion section:

    In our setting it provides the stark recommendation that firms would do better to remove discretion of the average manager and instead hire based solely on the test.

    But that conclusion only holds true for the 'average' manager, right?

    I'm sure your managers are way above average when it comes to making hiring decisions.

    Right?

     

    Discretion in Hiring, Mitchell Hoffman, Lisa B. Kahn, Danielle Li, NBER Working Paper 21709, November 2015

    Tuesday
    Apr262016

    CHART OF THE DAY: Trends in Labor Force Participation

    It's been ages since I broke off a CHART OF THE DAY post and even longer since I talked about the Labor Force Participation Rate, so let's remedy both of these situations in one shot.

    Courtesy of your pals at the Federal Reserve Bank of Atlanta, have a look at a recently published chart on participation, this one broken down by gender. As always, some insightful comments from me after the data:

    Let's break down the data a little, and see if we might (Shock!) learn something. Some observations...

    1.  Male labor force participation has been on a long and steady decline for ages. In fact, males, as a group, have been less and less inclined to participate in the labor market since at least World War II.

    2. The female participation rate increased from about 43 percent in 1970 to a peak of 60 percent in the late 1990s, from which it has remained relatively flat over the last 15 - 20 years.

    3. But despite the economic recession of 2007 - 2008 ending, the data show that between 2010 and 2013, participation declined even more steeply for both men and women. Average female participation in 2014 was 57 percent—the lowest level since 1988—and male participation was down to a record low of 69 percent.

    What should we think about when considering this data? After all, participation is influenced by numerous factors like workforce age, prospects, disability rates, desire to continue schooling, etc.

    Let's look at what the Atlanta Fed thinks is the near-term direction for Labor Force Participation:

    "As a guide, the Bureau of Labor Statistics projects that the factors pulling down the labor force participation rate will outweigh those pushing it up, and that by 2022, labor force participation will be 61.6 percent, 1.4 points below its level at the end of 2014."

    The trends and the predicted continuation of these trends suggest a labor market that is even tighter than we are experiencing currently. It seems also likely that the kinds of jobs that will be hardest to fill are not the ones that will be easily filled by simply coaxing more people back into the labor force. 

    If anything, a declining participation rate makes even seemingly 'easy' to fill jobs that much harder to fill.

    Long story short, this data suggests that filling all kinds of jobs is just going to get tougher. It's probably a good time to be a recruiter though.

    A good recruiter I mean.

    Monday
    Apr252016

    More from the 'Email is ruining our lives' department

    I have not written about email and how horrible it is for some time, so I was kind of glad that I was reminded of that horribleness (probably not a word, but let's keep going), while reviewing a recent survey about after-work hours email habits published by the enterprise service management company Samanage.

    It's a short, but informative report, and I recommend taking a few minutes to read the entire thing, but if you can't spare the 20 minutes or so (probably because you have to get back to your email), I will just call out the two most interesting survey findings and then because you expect no less, offer some FREE commentary about what these data points should make us think about as HR/business leaders.Ed Ruscha 'Actual Size', 1962

    Finding 1:

    More than 1 in 3 survey respondents (35.2%), said they spend more than 1 hour per day checking emails outside of work.

    Implication: The demands and expectations on many of us are so high that we simply can never get 'caught up', at least to the point where we can enjoy a night, or heaven forbid an entire weekend, without work, (in the form of endless emails), continuing to roll in. 

    When asked why we spend so much time after hours on email, almost all the responses are some version of the notion (and expectation), that if we don't spend at least part of your off-hours dealing with email, you won't be doing your job. That's pretty sad, and pretty frightening at the same time.

    Finding 2:

    20% of survey respondents reported that checking after-hours email produces negative feelings about work, including feeling overwhelmed and frustrated.

    Implication: Of all the findings in the survey, this is the one that I think bears the most consideration by HR and business leaders. The long-term, heck even medium-term effects of this email overload into all hours of the day and night are taking a toll on the workforce, at least 20% of them anyway. And that is not an insignificant figure. How would you feel if you knew that 20% of your team was 'overwhelmed and frustrated?' 

    And it is not just the employee's feelings and welfare you should think about. What about their friends and family members who all too often find themselves taking a back seat to your employee having to answer her email during dinner or at the ball game or when they are meant to be doing something, anything that is 'not work?'  

    Ugh. But I know that email is never going away, not in our working lifetimes anyway. I have finally resigned myself to that reality.

    However it can be less terrible. And we can do better to make sure it is not ruining our free time, filling us with anxiety, and tethering us to our work and workplaces no matter where we may be and what we are doing.

    I don't think I am going to write about email anymore, at least for some time. I am kind of tired of thinking about it. But after all these years and the many, many hours I have spent writing about the tool I guess the simplest conclusion or recommendation I have reached to try and make things better is this:

    Before writing another email, especially one after hours or on the weekend stop writing and think for 30 seconds or "Do I really, really need to send this message, with this information, to these people, right now?"

    Followed closely by a this follow-up:

    "How do I want people to feel about me, their job, the team, and the organization when they see this email?"

    Think about both of these questions before you hit 'send' at 11:30PM on Friday night.

    Actually, think about them at 10:20AM on Tuesday as well.

    Have a great week!

    Friday
    Apr222016

    "I welcome their contempt"

    The USA's 2016 presidential nomination contests have been nothing short of incredible.

    It doesn't matter your particular political affiliation, or philosophy, or world view - there has been something for everyone to love or hate or be embarrassed by, seemingly every week. And if you are someone that doesn't care at all about politics, you still would have to admit that the campaigns have at least been amusing theater.

    I don't normally, (ever, I think), write about politics, and this post is not really about politics in the classic sense, but rather is inspired by a recent quote from one of the major candidates still left standing - Uncle Bernie Sanders.

    I just want to share the quote, and a tiny bit of context and then I am out for the weekend.

    Here's Bernie, (citation to Business Insider)

    Democratic presidential candidate Bernie Sanders said on Wednesday that he welcomed a spat with several high-profile American CEOs who criticized his rhetoric.

    Sanders slammed Verizon CEO Lowell McAdam and General Electric CEO Jeffrey Immelt over their recent criticism of his populist economic agenda.

    "I don't want the support of McAdam, Immelt and their friends in the billionaire class. I welcome their contempt," Sanders tweeted on Wednesday afternoon.

    None of the details of Sanders' plans or the agendas of McAdam or Immelt matter to the point I care about and why I wanted to post about this which is this: You are defined as a person and as a professional and leader by your enemies as much as by your allies and friends.

    Sanders is thrilled that titans of industfy like Immelt are speaking out against him and his plans. These are exactly the kinds of enemies Sanders wants to make as he pushes his populist, stand-up-for-the-working-man rhetoric.

    Sometimes you seek out enemies, sometimes you just make some - either way they speak volumes about who you are.

    I think you do want some enemies. That means you stand for something. Just make sure you have the right enemies.

    And make sure you know who they are too.

    Have a great weekend!

    Thursday
    Apr212016

    What makes a workplace human

    Remember the classic Marvin Gaye song, 'What's Going On" from 1971?

     

    Sure you do. In the song Marvin lays out a kind of meditation on many of the issues and problems facing America in the early seventies. What is interesting about the song to me is that 'What's Going On' is not phrased as a question, as in, 'What's going on?', but rather it is presented as a statement, i.e. this is what's going on.

     

    I am taking the same approach to this post, 'What makes a workplace human', in that I am not asking, but rather I am going to try and make a statement too, at least a statement on what a human workplace means to me.

     

    If I think about all the places I have worked, and the attributes from each of those places that were the most human, three things come to mind, (there are certainly more that three 'humanizing' elements in workplaces, but I kind of think they all can be abstracted into three main categories).

     

    So what are the three common features of a more human workplace? 

     

    1. Respect for the person - The most human workplaces and experiences that I have had in my career were with organizations, or more accurately, within work teams where people were respected and treated with dignity at a basic, simple level. These were teams that were made up of smart, high-performing individuals, and led by demanding leaders, but they never forgot that the organization was not some abstract entity, but rather was made up of individual, and real people. How do you know if your organization respects and values people as real people? Check the 'official' response when a team member has a personal crisis, a family emergency, or in the worst case, a death in the family. Does the team rally to support the person in need? Or do they worry, (primarily), about project deadlines, insurance forms, and leave of absence policy compliance? A human workplace treats people as people, not as cogs to keep in line.

     

    2. Respect for the mission - The other side to the organization caring for its people as real human beings, is the people caring for what the organization stands for, and the larger mission that the organization exists to try and fulfill. The most human organizations consist of real people who (at least most of the time), feel energized by the mission and purpose of the organization, and can invest emotionally in doing their part to see that the mission is successful. When people can genuinely invest at an emotional level in a cause that is greater than just making sales or earning a profit, the 'humanity' of the organization increases dramatically.

     

    3. Respect for the community - Every organization exists as a part of some kind of community, whether it is a small, local business that sits on a main street in town, or a global organization that operates in hundreds of locations. Either way, every organization makes an impact on its community, however that is defined. The most human organizations never forget the influence that they have over these communities, and the best organizations attempt to make their communities better places. Organizations that have a strong commitment and demonstrate caring to their communities are likely the same organizations that are going to be more human in their interactions with their people too.

     

    The inspiration for this post is the upcoming Work Human Conference presented by Globoforce that is taking place from May 9-11 in Orlando. The event is about increasing the engagment of the organization, releasing the energy of your people, and helping you and your organization reach your potential. I will be attending and you can join me by using registration code WH16SB300, at the following registration link http://bit.ly/whstbotw and receive $300 off the current registration rate.