Poor Hiring Decisions Impact Your Bottom Line
By Doug Walner, President & CEO, Psychological Services, Inc.
Evaluating the strengths and weaknesses of job applicants isn't an easy process. Conventional interviews and first impressions can often be misleading. The candidates you may have thought would be strong performers could buckle under pressure or be ill equipped to handle what you may consider the most basic tasks.
So, what can employers do to "hedge their bets" and help ensure that they're hiring the best candidate possible for the job at hand? One answer is by using assessment and evaluation programs to better match candidate capabilities with key job demands. Cognitive, aptitude and other such tests can help measure not only a person's mental ability, creativity and decision-making skills, but also specific personality traits, whether that person shows a willingness to learn and to succeed, and other factors.
Assessments can also help "weed out" poor candidates and help companies from making mistakes that could severely impact their business's bottom line.
According to a survey by one of the country's leading accounting firms, turnover costs about 1.5 times the salary of the employee who needs to be replaced. That includes severance costs and other costs related to recruitment, training and lost productivity. It's a hard pill for any employer to swallow, particularly in the hotel and hospitality business where having one "bad apple" in a key position can result in untold damage to a hotel's name, reputation and revenue from repeat business.
The annual hotel industry turnover rate at present is a staggering 48.35%, according to the American Hotel and Lodging Association. When one takes that figure, and combines it with the typical cost of replacing an employee, the case for making the right hiring decision becomes even stronger. Bad hires can cost money - lots of it. But there are other downsides, as well.
A survey released this past April by a Philadelphia-based career-consulting firm listed the following consequences of bad hires and promotions.
- Lower employee morale (cited by 68 percent of respondents)
- Decreased employee productivity (66 percent)
- Lost customers/market share (54 percent)
- Higher training costs (51 percent)
- Higher recruitment costs (44 percent)
- Higher severance costs (40 percent)If you talk to employers - and those in the hotel business are no exception - most will tell you that people are their most valuable asset. They will also tell you that they believe strongly in hiring the best candidates, one that will stay with their organization, help it grow, profit and achieve its goals. Yet many continue to rely solely on interviews to hire.
Why? Because some companies don't believe they can afford an extensive hiring process or additional tools that will help them ensure they are making the right decisions. That type of thinking, however, can be penny wise and pound foolish. Just look at the type of labor costs involved in replacing an employee who quits or is fired:
Hiring the Best
In the hotel and hospitality industry, candidates seeking customer service positions need to exhibit a variety of skills. For prospective employers evaluating them, however, four skills must stand out above all others: exceptional interpersonal communication; the ability to deal with a wide range of personalities; the flexibility to adapt quickly to changing situations; and, very importantly, enormous patience.
In the hiring process, hotel managers must move beyond superficial evaluations of a candidate's basic skills, experience and motivation, and, in effect, look "beyond the surface" for traits that will spell the difference between success and failure. Pre-employment assessment testing helps accomplish that.
Assessments can provide an in-depth view of a candidate, uncovering characteristics not easily seen during traditional hiring processes. They can also help determine if one candidate is better suited for the job than another, is more appropriate for a midlevel position than a senior one, or if that candidate can multi-task.
An employer, for example, may want to hire a candidate who is not only a strong front desk manager, but who also has outstanding presentation and sales skills. Such qualities can be difficult to detect during a job interview, when a candidate is more likely to exaggerate his or her abilities. Neutral, third-party assessments, however, can help identify candidates who possess those skills while quickly eliminating those who are unqualified.
Assessments for guest service positions typically focus on fundamental skills, such as:
Such tests, however, can also be critically important in determining a candidate's service orientation. They can reveal the person's "people skills," and whether that person is courteous, cooperative, attentive and helpful. Such skills are essential in service positions, and the employer who knows which candidate has them is better equipped to make a sound hiring decision.
For 60 years, national HR test publisher and consulting firm PSI (Psychological Services, Inc.) has evaluated a variety of service-oriented jobs in corporations, government agencies and for-profit and non-profit organizations. PSI has gathered volumes of information regarding what predicts employee success, tactics for reducing turnover, and what innovative companies can do to attract and keep talented people.
For clients who employ service representatives, an essential tool is an attitude assessment designed especially for those who serve in direct, customer-facing positions, measuring a candidate's strengths and weaknesses when it comes to those ever-important "soft" skills.
The qualities that can be profiled include:
- Past behavior while assisting others
- Value of working and helping others
- Reaction to rude or hostile behavior
- Patience in dealing with people
- Motivation to put other people's needs first
- Willingness to go out of one's way to help othersWhile such tests are not typically the sole source of information, they provide reliable and predictive information to help identify candidates with the right capabilities and qualities -- and eliminate sub-par candidates.
To sum up, companies need to make a conscious, informed decision about how they plan to run the hiring process. Do they want to take the time to actively select great employees or do they prefer to "fill the position ASAP" and constantly replace sub-par workers? Pre-employment screening provides a better return on investment, a more solid foundation for your operation as a whole, and will keep your guests (and your bottom line) happy.
Doug Walner drives the goals and day-to-day operations of PSI. With nearly fifteen years of experience and expertise in the technology sector, Walner was appointed President in 2002 and CEO of PSI in 2005. Under his leadership, PSI has developed and introduced ATLAS™, a technology platform which provides comprehensive examination administration services, and web-based pre-employment selection products and management assessment tools. PSI has experienced revenue and profitability growth during his tenure. Walner received his Bachelor or Arts degree in History from Tulane University. Mr. Walner can be contacted at 818-847-6180 or firstname.lastname@example.org Extended Bio...
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