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THE CASE FOR EMPLOYMENT TESTING
The Problem
Hiring mistakes lead to unnecessary business
expenses such as employee turnover. Terminating a poorly chosen
employee can lead to EEO issues which cost employers even more.
Employee theft and other
integrity based issues like fraudulent worker compensation clams are
also very expensive for employers.
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Employee Turnover
Some thoughts on the cost of turnover
from, Keeping the People Who Keep You in Business;
The cost of hiring and training a new employee can vary greatly—from
only a few thousand dollars for hourly employees to between $75,000 and
$100,000 for top executives. Estimates of turnover costs
may range from 25 percent to almost 200 percent of annual compensation.
Costs that are more difficult to estimate include customer service
disruption, emotional costs, loss of morale, burnout/absenteeism among
remaining employees, loss of experience, continuity, and “corporate
memory.” The real turnover cost for one employee making minimum wage
is $2678.
KEEPING THE PEOPLE WHO KEEP
YOU IN BUSINESS: 24 Ways to Hang on to Your Most Valuable Talent
by F. Leigh Branham (AMACOM; October 2000)
Employee Theft
Here are some startling
statistics from the, 2002 National Retail Security Survey;
"... they believed employee theft to be the single most significant component of inventory shrinkage."
"...Specifically, retailers attributed 48% of their inventory shrinkage to employee theft."
"...employee theft continues to increase significantly."
"...there is no other other form of larceny that annually costs American citizens more money
than
employee theft.
"...this translates into an annual employee theft price tag of slightly over $15 billion."
2002 National Retail Security Survey
Richard C. Hollinger, PhD., Jason Davis, University of Florida
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An Incomplete Solution
The three most common methods employers use in the hiring process are interviews, background checks and drug screens.
The big three have their place in the in the hiring process but are not by themselves fool proof.
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Drug Testing
Urine based drug testing is the most widely used form of screening
for drugs of abuse in the hiring process. The problem with this
form of testing is the wide array of adulterates available to defeat
them. An internet search of the term "drug test" will produce more
websites that sell products to defeat urinalysis drug tests than drug testing
providers and some of them work. Click
here to see why we recommend saliva drug testing.
Background Screening
Background screens which most companies rely upon to
ferret out the bad apples can add an additional level of false
confidence to the hiring process. There are over 3000 counties in
the United States that have criminal courts. Some of the conviction
data is reported on a timely basis and some of it is not. Background
screening companies are only as good as the information provided to them
by the courts. Another issue with background screening is that the
vast majority of states do not have a central repository for conviction
data. The result is that employers must do a county search to find
the information that is so vital to their hiring process. You only
get the information you need if you search the right county. Remember that
there are over 3000 counties.
Click
here to see why background screening is not all you need in your
hiring process.
Employment Interviews
"Most managers don't know how to conduct a proper interview.
Even managers trained in behavioral interviewing don't use it because it's too complicated.
Instead, they substitute their emotions, gut feelings, and intuition. Making
matters worse, they don't know what they're looking for with respect to real
job needs."
Lou Adler Of the Adler Group a training and consulting firm helping
companies hire more top talent by implementing performance-based hiring. |
The Missing Piece
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Excerpts from the Academy of Management Journal
A 1990 review of the research on the validity of Integrity-honesty
tests performed by the U.S. Congress's Office of Technology Assessment
found no studies conducted by independent researchers in which detected
theft was used as the criterion.
In the first such study, we
found that scores on an honesty test successfully predicted detected theft
for a group of convenience store employees. No significant differences on
the test emerged as a function of race, gender or age.
Why individuals would
knowingly present themselves as sympathetic to theft is not well
understood but is perhaps related to their thinking that those attitudes
are normal and not unsavory. Research has shown that the job applicants
most likely to engage in theft-related activity perceive themselves as
average people in a basically dishonest world. According to one popular
theory, by projecting their own dishonesty, dishonest people can
rationalize that everyone steals, so they are acting according to accepted
norms.
VALIDITY OF AN HONESTY TEST IN
PREDICTING THEFT AMONG CONVENIENCE STORE EMPLOYEES;
H. John Bernardin, Donna K. Cooke, Florida Atlantic University
Attitude based Pre-Employment Testing
It has been our firm belief for the past three decades that attitudes are
measurable; that attitudes and behavior are inseparable; and that knowing
an applicants attitude is a window into the future. Attitudes can
predict behavior and indicate relative risk levels far better than any
other information or method, including traditional confession based
integrity tests.
THE IMPORTANCE
OF HIRING THE RIGHT JOB CANDIDATE
Robert W. Cormack, Personnel Systems Corporation - Publisher
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Conclusion
Hiring a well qualified and motivated workforce is one of the most important
and difficult challenges companies face. Adding a validated pre employment test has proven to be an
effective way to reduce the risk associated with the hiring process. Hiring
the right person the first time is worth the small additional cost and
does provide a substantial return on investment.
It adds an element of objectivity into an
otherwise subjective or "seat of the pants" process. It also provides
additional insight on each applicant which adds to the accuracy of the
selection process.
In labor intensive
industries, pre employment testing can provide a more significant return on investment than any
other profit enrichment strategy.
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