Average spend per employees at US Companies. Based on data from Bock, Work Rules!
606 456
T a l e n t Ac q u i s i t i o n
Training Spend ($)
124
RecruitingSpend ($)
If talent identification is more economical than talent development, massive investment in the selection process can pay off. Google and Netflix adopted this approach and succeeded in using this insight to create a sustainable advantage over their competitors. Many companies have taken this lesson to heart and are building up their talent acquisition analytics teams to improve the accuracy of hiring predictions. Yet, many organizations use traditional methods like the unstructured interview to select their workforce. Researches have highlighted that the Success prediction rate of an Unstructured Job Interview is roughly the same as flipping a coin. Analysis of 85 years of research by Frank Schmidt and John Hunter illustrated unstructured interviews can predict only | July 2021
14 percent of an employee’s performance4. Atta Tarki in his book Evidence-Based Recruiting5 substantiated General Mental Ability (GMA) tests as the single best predictor of job performance (Figure 2). It assesses a candidate's ability to learn, understand instructions, and solve problems. Other strong individual techniques include job knowledge tests, integrity tests, and tryout stints such as internships. These measures have a high correlation with on-job-performance6
enable to measure, standardize, and replicate many of the outcomes and qualitative methods offer richness and depth of the insights. When assessing candidates, both methods ought to be used as complementary tools. On par with General Cognitive Ability tests, Structured Interviews (26 percent) is an equally reliable predictor as a selection tool, wherein candidates are asked a consistent set of questions with clear criteria to assess the quality of responses. Structured
Predictive validity for job performance of selection tools. Based on data from Schmidt, Oh, and Shaffer 2016 General mental ability test
0.65
Job Knowledge test
0.48
Integrity tests
0.46
Job tryout procedure
0.44
Grade point average (GPA)
0.34
Work sample tests
0.33
Emotional intelligence tests
0.32
Situation judgement tests Job experience Extroversion
Laszlo Bock in his book Work Rules also describes Work Sample Test (29 percent) as the best predictor of job performance and General Cognitive Ability (26 percent) tests as the second-best predictor7. Selection methods can be qualitative/quantitative. The quantitative methods
0.26 0.16 0.09
interviews are further classified as Behavioral and Situational. Behavioral interviews involve asking candidates to describe prior achievements and matching those to current job requirements like “Tell me about a time... ?”. Situational interviews present candidates with the hypothetical situation
