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ROI and the Talent Acquisition Pipeline
Jonathan M. CangerVerizon Wireless
USF HR ROI 2007 ConferenceTampa, FL
February 15, 2007
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’
A Biased, Condensed History of the World (of HR)
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
‘Not So Fast…’ View From MBA’s
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…
TelephonePrescreen
Telephone Interview
HR StructuredInterview
Computer Based
Simulation
Supervisor StructuredInterview
Job OfferBackground
Check & Drug Screen
Staffing Process
…which Is fed by Sourcing...
TelephonePrescreen
Telephone Interview
HR StructuredInterview
Computer Based
Simulation
Supervisor StructuredInterview
Job OfferBackground
Check & Drug Screen
SOURCING
Staffing Process
..whose output (new employees) is oriented and trained…
TelephonePrescreen
Telephone Interview
HR StructuredInterview
Computer Based
Simulation
Supervisor StructuredInterview
Job OfferBackground
Check & Drug Screen
On-Boarding
Training Orientation
SOURCING
Staffing Process
On-boarding Process
…and finally delivered to the business…
TelephonePrescreen
Telephone Interview
HR StructuredInterview
Computer Based
Simulation
Supervisor StructuredInterview
Job OfferBackground
Check & Drug Screen
On-Boarding
Training Orientation
SOURCING
Staffing Process
On-boarding Process
…to subsequently do things which create value or havoc.
SOURCING
TelephonePrescreen
Telephone Interview
HR StructuredInterview
Computer Based
Simulation
Supervisor StructuredInterview
Job OfferBackground
Check & Drug Screen
On-Boarding
Training Orientation
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
Staffing Process
On-boarding Process
Performance Outcomes
Each Step Has Costs, and Impacts Subsequent Steps and Outcomes
SOURCING
TelephonePrescreen
Telephone Interview
HR StructuredInterview
Computer Based
Simulation
Supervisor StructuredInterview
Job OfferBackground
Check & Drug Screen
On-Boarding
Training Orientation
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
Staffing Process
On-boarding Process
Performance Outcomes
Pre-screen
84% pass rate
Pre-screen
84% pass rate
Phone Interview
61% pass rate
Phone Interview
61% pass rate
ComputerSimulation
47% passrate
ComputerSimulation
47% passrate
SupervisorInterview
59% pass rate
SupervisorInterview
59% pass rate
HRInterview
67% passrate
HRInterview
67% passrate
Job Offer
92% acceptance
rate
Job Offer
92% acceptance
rate
Background Check
74% pass rate
Background Check
74% pass rate
$10 $25 $30 $33 $33 $20 $100
$10,000 $21,000 $15,360 $7,980 $4,635 $1,900 $8,700
1000 840 512 240 141 95 87
An Example of the Cost Side of The Equation
If 1,000 candidates are delivered from sourcing
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% pass rate
Computer Biodata Screen
49% pass rate
PhoneInterview
52% pass rate
PhoneInterview
52% pass rate
EnhancedSimulation
66% pass rate
EnhancedSimulation
66% pass rate
JointInterview
61% pass rate
JointInterview
61% pass rate
Job Offer
93% acceptance
rate
Job Offer
93% acceptance
rate
Background Check
86% pass rate
Background Check
86% pass rate
$0
$0
1000
$25
$12,250
490
$30
$7,650
255
$66
$11,088
168
$20
$2,040
102
$100
$9,500
95
Note: Above number are for illustrative purposes only. They do not represent actual Verizon Wireless Results
Re-engineered Process
Computer Biodata Screen
49% pass rate
Computer Biodata Screen
49% pass rate
PhoneInterview
52% pass rate
PhoneInterview
52% pass rate
EnhancedSimulation
66% pass rate
EnhancedSimulation
66% pass rate
JointInterview
61% pass rate
JointInterview
61% pass rate
Job Offer
93% acceptance
rate
Job Offer
93% acceptance
rate
Background Check
86% pass rate
Background Check
86% pass rate
$0
$0
1000
$25
$12,250
490
$30
$7,650
255
$66
$11,088
168
$20
$2,040
102
$100
$9,500
95
If the same 1,000 candidates are delivered from sourcing
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.
Note: Above number are for illustrative purposes only. They do not represent actual Verizon Wireless Results
Affecting the Performance Outcomes: The ‘Deep Dive’
Which Enhances Outcomes And Reduces Hiring Needs
SOURCING
TelephonePrescreen
Telephone Interview
HR StructuredInterview
Computer Based
Simulation
Supervisor StructuredInterview
Job OfferBackground
Check & Drug Screen
On-Boarding
Training Orientation
1. Stay
2. High Job Performance
3. Low Absenteeism & Tardiness
4. Good Customer Service
5. Recommend Company as Place To Work
Staffing Process
On-boarding Process
Performance Outcomes
New Biodata
