Should I Use Cognitive or Skills-Based Assessments for New Hires?
It’s no surprise that in an age where there are often many candidates applying for any given job, many hiring managers are using pre-employment assessments to review applicants. Using assessments can help a company find new employees who are the best fit for its company culture and for the position. There are several kinds to choose from; picking the right one for your needs depends a lot on the organization and the type of job being filled.
Cognitive Assessments
These assessments test a person’s ability to process information or thoughts. These tests are similar to IQ tests. They can measure memory, numerical and reading comprehension, speech, the ability to learn and even problem solving capabilities. Hiring managers may use these tests to help determine if the candidate is likely able to meet the performance requirements for a job. By doing this, the new hire and team will be more efficient and this productivity can lead to reduced employee turnover. While pre-employment testing should never make up all of a hiring manager’s employment decision for a candidate, assessments can certainly contribute to around 25-30% of the decision.
Job Skills Tests
These are tests based on a specific job skill that is required for a position. The skills in question might be very broad or very specific. Broad examples include general math, Excel, customer service or grammar skills. More specific examples of these tests might include automotive technology, light industrial math, accounting software, legal terminology or medical billing. As you probably can guess, this type of assessment can be useful in many types of industries. If you need to fill a position that requires proficiency in Excel, than you want to make sure the candidate is up to speed on this software – the skills test would be perfect for this situation. Also, skill-based tests can be useful when hiring for a lot of job openings at once – jobs that require particular skills. You can rank the many candidates based on their scores and do comparisons.
Behavioral Pre-Employment Testing
Assessments that test the behavioral traits of an applicant, especially when combined with cognitive or job skill tests, are also useful. Behavioral traits are sometimes referred to as “soft skills,” but are still very important, especially to job fit and one’s potential to assimilate well into a company’s culture. Just a few examples of the kinds of traits tested include: independence, energy level, assertiveness, sociability, objective thinking and decisiveness. Knowing how the candidate is hard-wired to think and respond to situations is just as important as knowing if one has the skills or IQ to do the job. This type of assessment can help ensure that an applicant is more likely to mesh with the team, department and/or overall organization.
Depending on budget, you may not be able to give assessments to each and every applicant for all open jobs. However, in the long run you may opt to use any one of these (or two depending on the type of role involved) to make sure you make the right hire for your company – especially for the positions that are particularly difficult to fill and/or that experience relatively high turnover.
Selecting a partner to help you administer validated, job-relevant pre-employment testing can prevent you from making a bad hiring decision, as well as save you time, money and frustration! ExactHire offers options in all of these assessment categories and can even assist in building customized job pattern models to establish targeted performance ranges for your organization – these models are invaluable when analyzing candidate results.
For more information about our products, please contact ExactHire.
Image credit: Exam 
by Alberto G. (contact)
Eric Stauffer – Chief Technology Officer
Eric Stauffer began working with ExactHire as Chief Technology Officer in 2014 and brings a wealth of development and strategic technology management experience to the team.
Chantel Hatch – Client Services Associate
Chantel Hatch began working with the ExactHire Client Services team in 2011 as a Client Services Associate. She’s available to help ExactHire clients by offering thorough training on applicant tracking system features and ongoing product/tech support. She helps our clients take full advantage of all HireCentric ATS product features; thus, enabling them to use their software applications more efficiently.
Chantel received a degree in Business Management in 1999. She has had 15 years experience working in client services-related positions…from office manager to technical support.
How Do I Calculate ROI For Applicant Tracking System?
There are several ways to calculate the return on investment (ROI) for an applicant tracking system (ATS). But to start, you need to first determine the cost of your hiring activities without an ATS.
Equation #1: Time Cost
Let’s say we have an HR Employee who handles hiring (I’ll call her Joy). Consider the number of hours that Joy works on hiring activities in a week (H) and multiply that number by her amount of pay per hour (P).
If H = 40 hrs.
and P = $20 per hour
Then, H x P = $800 per week focused on hiring activities without an ATS
An applicant tracking system could easily reduce that employee’s work by 25% and cost as low as $30 per week (C). So let’s look at the ROI in that scenario:
If H = 30 hrs.
and P = $20 per hour
and C = $30
Then, (H x P) + C = $630 per week focused on hiring activities with an ATS..a savings of $170 per week or a 560% ROI.
Equation #2: Labor Needs
But what if Joy can only review 40 applications per day and your organization really needs to review 60 applications per day? If you want to get through 60 applications in a day without a backlog–and without investing in applicant tracking software, you’ll need to hire another person.
So if one employee (E) can review 40 applications per day (A) and you need 60 applications reviewed per day (N), let’s determine how many additional employees you’ll need.
If N = 60
and A = 40
Then, N ÷ A = 1.5 employees to review 60 applications per day.
Equations #3: Labor Cost
Now, let’s combine the results of both equations to find the time cost for this scenario where hiring is the solution to meeting capacity requirements.
(H x E) x P = $1200 per week focused on hiring.
Now we have a ball-park figure we can use to see if the cost of the ATS is equal to or less than the additional labor cost.
Reducing Labor Cost With Applicant Tracking Software
An ATS can review applications more quickly than a human through the use of automatic scoring and/or disqualification filters associated with answers given for application screening questions. With the aid of these filters, the applications can be sorted and the reviewing process can begin with those applicants that most closely align with what you are seeking for that given position.
This means that Joy in our example above should have no problem reviewing 60+ applications per day, saving the organization from hiring a part-time employee and saving $400 per week in labor costs…or $1600 per month. When you consider that the price of HireCentric ATS starts at $120 per month, that’s a big return on your investment!
ROI for Applicant Tracking System Analysis Factors
Beyond the time cost savings, let’s consider some of the other items to factor into your ROI analysis:
- Focusing on just the more-qualified applicants (as determined by the screening questions mentioned above) usually leads to better hires, because recruiters and hiring managers are no longer buried by resumes. Better hires tend to ramp up faster, perform better and stay longer. This means a better bottom line for your organization.
- Candidates no longer “slip through the cracks” — the better ones are more quickly identified and may be contacted quickly to avoid them going elsewhere.
- You’re now building an actual candidate pool from which to draw later. This means fewer postings to paid job boards and dollars saved because of it.
- Jobs may be shared through social media by both your applicants and your existing employees. Again, this means more quality applicants without over-relying on paid job boards.
My experience is that focusing ROI efforts on time savings alone tends to fall on deaf ears when approaching a CEO or CFO for approval. Using some of these alternative ideas, along with the time savings and low cost nature of an applicant tracking software tool, should improve your odds of making a business case to executive management and getting the solution your organization needs.
If you would like to discuss pricing and/or ROI for ExactHire’s applicant tracking software further, please contact us today.
Are Electronic Signatures Valid?
Because our employee onboarding software utilizes electronic signatures, we are quite frequently asked “are electronic signatures valid?” The short answer is…yes.
Requirements for Valid Electronic Signatures
However, for this to hold true, there are conditions that have to be met. These were established with the Electronic Signatures in Global and National Commerce Act (ESIGN) of 2000. While you may wish to consult your Labor & Employment attorney for more details, I’ve listed below the core requirements that must be met for an electronic signature to be valid:
- The person signing the document must be allowed to view the completed document before being asked to provide his/her signature — this is to prevent any potential fraud in these types of transactions.
- The signature must be unique and verifiable — whatever device or software tool is being used to capture this must be able to record how the signature was entered, when (time & date), and how it is tied to that individual (password, IP address, etc.).
- The document may not be altered after the signature is affixed — as with the first point above, this is designed to make sure agreements can’t be changed after a person has signed them.
- The signature must capture the consent and understanding of the person providing it — this may be accomplished a number of ways, but is designed to make sure any “fine print” is made clear and obvious to any parties involved in the electronic signature process.
These guidelines are based on the federal ESIGN Act (referenced above), and apply to interstate commerce. However, there are states that will occasionally designate certain documents as not eligible for electronic signature recognition. While this doesn’t happen frequently, you should certainly check with your organization’s attorney before moving ahead with any service/solution that utilizes this process.
That exception notwithstanding, most any new hire documents are certainly eligible for e-signature. This includes files like I-9’s, W4’s, direct deposit forms, company policies and procedures, employee handbook acknowledgments, etc.
Selecting an Onboarding Software Vendor
Because this is a newer type of offering for most HR software providers, when going through the process of selecting a partner, please be sure to confirm that the vendor’s electronic signature process will pass muster, if challenged. The benefits of onboarding software are compelling, but you want to be sure you partner with a provider who understands and can explain how their tool complies with these protocols.
If you’d like to learn more about ExactHire and how our paperless onboarding software can benefit your organization, please visit our resources section or contact us today.
How Do You Assess Employees On The Job?
Well, this blog about assessing employees hits home as I just had my one-year work anniversary with ExactHire. I love my job, by the way, and wish everyone could enjoy coming to work as much as I do! (I am not kissing up because I have already had my annual review!) But, it brings up a good question that affects all employers regardless of size of company or industry…how do you assess employees?
There are multiple traits that can be reviewed to assess your employees:
Quantitative Measurements – these should be the most obvious characteristics to review
- Performance Objectives – These could be set by management as goals for the employee or for the overall organization. Examples might include sales goals of a specific dollar amount, obtaining a set number of new accounts/clients or safety goals in a production facility.
- Cost Effective – The employee’s productivity during his/her time at work vs. the cost to have him/her there. This can be a simple measurement for some types of jobs, like in the manufacturing industry where it is easy to count output of units produced, but it may be more complicated to compute in other industries such as consulting or healthcare.
- Absenteeism or Timeliness – Here is an easy one – most companies have some type of system in place to keep track of tardiness or absenteeism of their employees. Make sure that your employees are not abusing the system.
Personal Behavior – how the employee conducts himself/herself on a daily basis
- Works well with team – This is important to all jobs but is much more imperative to certain positions or industries. Depending on the nature of the business, if an employee is not a team player, that can make a work situation miserable for many people.
- Creativity – Again, this one can depend on the position, but overall, reviews how well the person handles change, problem solving and other situations that require the employee to “think outside the box.”
- Follows policies – Whether in management or low man on the totem pole, this one says a lot about people. Is your employee a strict follower of the policies or is he/she a “rule breaker”? Review how this can affect his/her performance and the performance of others.
Appraisals – evaluations done by various people anytime of the year for various reasons
- Self – Asks the employee to look at himself/herself to review how he/she thinks he/she is performing at current position.
- Manager – This is the most standard evaluation given…what does the boss think of the employee? This is important but is far more useful when combined with other evaluations.
- Peer – This one can be tricky but is equally important. Peers often have a lot of insight into the employee’s overall productivity.
- 360 Degree – All of the above! ExactHire offers a “360 degree survey” that takes into account all of these appraisal types to produce an overall summary or performance picture of the employee. These are very useful for a company to use for an annual snapshot of the team dynamics as a whole, as well.
Employers can use assessments to reevaluate employees at any time, measuring their cognitive and behavioral traits. If you have any concerns regarding a new hire, keep in mind that the use of employee assessments can help retain talent. In the long run, you will be able to find a good fit for your company as well as for the job at hand. The right person for the job will be more productive and stay engaged in his/her work…creating a positive atmosphere for everyone.
Image Credit: By Employeeperformance (Own work) [Public domain], via Wikimedia Commons
7 Ways Human Resources Can Use Application Management Software
When you purchase software, it’s always nice to learn everything about what the software can do right away. However, we all know this is not always a realistic possibility depending on the extent of available features. Sometimes, you have to “grow” into the application. With ExactHire’s applicant application management software we are occasionally asked for ideas on other ways this employment application software can be used. Here are the highlights:
As An External Employment Application
Let’s start with the most traditional and primary use of the ATS – an external application to invite applicants to apply to open positions.
As An Internal Application For Interoffice Transfers
The ATS can also be used for existing employees that want to transfer to another position within the company. You can create an internal employment application and post jobs exclusively to your internal job board. If you would like to, you can also post the jobs to both job boards – internal & external. The advantage of a separate internal application is that you can ask your internal applicants different questions and allow the application to be shorter. For internal applicants you may want to know how long they’ve been in their current positions or if they have been on a performance plan in the last six months.
Additional Applications For Volunteer Management, Internships, Executive Candidates, etc.
If your regular external application won’t meet the needs of all your external applicants, you can have separate applications attached to job postings focused on volunteer opportunities, internships and/or executive positions. These applications may either ask different questions than your regular external application; or, they may just need to be shorter in order to engage these audiences of individuals to apply.
Build An Applicant Pool Over Time
You can also post jobs for future opportunities at your company. Adding screening questions that ask what type of job one would seek and/or why the applicant is interested in your company is a good way to help you review those applications. This helps you to have a reservoir of applicants for when you’re ready to begin an active search down the road.
Record The Applicants’ Movement And Notes
In addition to simply collecting applications, the ATS is really wonderful to help record where applicants are in the process for you and your team. First interview, second interview, etc. This work flow record keeping ability comes in handy when you have more than one person touching applicant records. Notes, in addition to statuses, can be recorded…including the author of the note.
Applicant Reporting
All of the recordkeeping comes in handy when it’s time to access reporting options in the system. If you are subject to Affirmative Action Reporting or Equal Employment Opportunity Commission reporting, the software can help simplify that process. Some reports come standard with the software, and others can be built in the reports section. Even if you are not required to do compliance reporting for governmental purposes, chances are your financial department will want to see efficiency reporting to justify your recruitment spending…all of which can be pulled from the software, as well.
Requisition Management To Approve Positions
Requisition management is another feature available for use within the ATS. Requiring approval on potential positions is often a critical piece of the hiring process. After all, budgets are critical in successful businesses and if you’re hiring someone, it’s good to know if you have the budget, as well as management approval, for such activities.
There are many other benefits applicant tracking software can bring to your organization. If you have questions, please feel free to contact us. It never hurts to ask the question!
Image credit: Number 7 by Eric Gravengaard (contact)
5 Reasons Why Companies Need Human Resources
I was talking with a friend yesterday who does “life coaching,” and she asked a great question … “Why do you like your job so much?” My answer was simple…ExactHire is a small company so everyone here has to wear many different “hats” and no day is ever the same. We have fun together and work as a team!
The more I thought about it, I was struck by the ironic fact that we work in the Human Resources (HR) industry but don’t have a specific Human Resources department or even an HR manager. Every company needs to practice HR-related activities, but that does not mean each organization is required to have a designated person or department for this function; it really just depends on the size of the company. At ExactHire, since we are a small business, we split the standard human resources duties among several staff members, and also utilize a professional employment organization (PEO).
Regardless of the size of your company, it is imperative that you consider how the following HR-related responsibilities are being handled for your business. That way, you can be confident that the employment brand you are presenting to individuals is positive.
Recruiting New Employees
At some point, every business needs to recruit new employees…whether due to growth or turnover. An effective recruiting process is key to an organization’s ability to grow and succeed. After all, how can you take on new projects / clients without more employees? In your business, who seeks out job applicants and screens them? You may have a designated recruiter in HR; or, individual departmental hiring managers may handle this duty for their respective areas. Applicant tracking systems (ATS software) can make the process of sourcing and screening job applicants streamlined and paperless, but someone in your business, preferably with an HR background, still needs to champion the recruitment function at your company.
Administering Employment Paperwork
I know…employment paperwork = BORING! But without it, your employees (and you!) wouldn’t get paid, taxes wouldn’t be properly recorded and benefits would not be available to your staff. Don’t forget about worker’s compensation and unemployment – those items require lots of time and paperwork, too! Also, HR should help to keep your business in compliance with federal and state laws. Many small companies can be overwhelmed with these compliance-related tasks, but it is still necessary to perform these responsibilities. Consider a paperless employee onboarding software solution, to make hiring new employees much easier on everyone involved.
Training & Employee Development
When a new employee is hired, who leads the orientation session(s) in your company? Normally, it’s the head of the employee’s department and/or the HR manager. Without HR, new employees might fail to learn critical company policies, and might fall short of feeling truly assimilated into the organization’s culture. Human resources professionals often head up other training programs such as health and safety programs for employees; as well as, sexual harassment or performance management training, too.
Compensation & Benefits Administration
When first accepting an offer with a company, some of the initial questions asked by new employees include “What is the pay?” and “What are the benefits?” HR typically handles all types of employee benefits, from insurance to 401k to educating employees about a flexible spending account. Medical, dental, vision, life, disability…the list of insurance types alone can get very long. Your human resources department coordinates these policies with the broker/provider and on behalf of the employee. HR business partners also manage benefit open enrollment for employees. When you have an issue with insurance, or a change in deductions for a flex account, or want to increase your 401K contribution, you will likely always seek out your HR guru first. Make sure your business has a “guru” resource.
Employee Relations & Evaluating Performance
Lastly, but certainly, not least – HR is usually tasked with championing a consistent and helpful performance evaluation process for employees. This is a big one! If policies are not being followed, the HR manager, in conjunction with hiring managers/department heads, has to step in and correct the situation…whether it’s a safety issue; or, perhaps an employee not showing up to work on time.
This wheelhouse also includes how well an employee is performing his/her function. Maybe the manager thought an employee would be a good fit for a position but it is not working out as expected. Could that employee thrive elsewhere in the company? Using an employee assessment recommended by HR, the organization may be able to help find the right fit for the department among other candidates; or, a new place for the existing employee. Performance evaluation also serves as a mechanism to review progress, and then effectively and sufficiently reward those that are doing a great job for a business.
As you can tell, there are MANY important duties that human resources performs in any company, of any size. Individuals tasked with these types of duties play the role of cheerleader for the employee, and also serve as the middleman between management and the employee. If you are not sure what you can do to improve your employment brand, ExactHire offers several web-based software tools to streamline HR-related tasks…making them easier and more efficient. Contact us today for more information or visit our resources section.
Image credit: Question mark made of puzzle pieces by Horia Varlan (contact)