

Copyright © 2019 Talegent

All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the publisher, except by reviewers, who may quote brief passages in a review.

Talegent

Level 18, 48 Emily Place,

Auckland, 1010

New Zealand

Visit www.talegent.com

ISBN: 978-0-473-49775-0 (paperback)

ISBN: 978-0-473-49776-7 (ebook)

The author and publisher have taken great care to ensure accuracy of content but can take no responsibility for actions or liabilities due to using this work as a sole guidance. The author and publisher have made every effort to use reliable sources to provide information that is accurate and compatible with generally accepted standards. The publisher has no responsibility for the accuracy of data from external sources and does not guarantee that information form external sources remains accurate and appropriate.

Editing by Beth Sketcher

Front cover design by Jerry Wang

Book design by Jerry Wang & Milly Jennings

Printed and bound in New Zealand

First printing October 2019
'Today's recruiter must be a marketer, sales person, career coach, and psychologist all in one.'

\- Josh Bersin

Contents

Introduction ..........................................................................1

Competency Models.........................................................5

Values ..................................................................................23

Fairness & Diversity ........................................................37

Selection Methods ..........................................................55

Candidate Experience ....................................................71

Assessment Centres .......................................................91

Personality & Ability Assessment ...........................109

Graduate Recruitment ................................................149

Emotional Intelligence ................................................169

Grit .......................................................................................183

People Analytics ............................................................195

Artificial Intelligence .....................................................213

Behind the Book ...........................................................229

\- 1 -

A paradigm change is underway in the talent measurement space. Traditional psychometric assessments are no longer about gathering static data from candidates; they now help to attract and engage them. Attracting, engaging and selecting the best talent is a journey, not a singular event. The evidence is in that a data-centric approach to identifying and selecting talent will more accurately predict performance and retention than traditional measures. Leveraging big data and science alongside an engaging candidate experience holds a tremendous opportunity for employers to position their organisation as a talent magnet, by identifying and connecting with the very best candidates available. Great candidate experience is all about having an interactive and transparent process where candidates feel valued and motivated.

Big data is now front and centre in employee selection and development. Technology can be leveraged to measure talent in new, convenient and unobtrusive views, thus enabling employers to select candidates that they would perhaps never previously have considered. When many candidates are fit for the job, HR must pinpoint the people with exceptional competencies that will outperform the rest. Possessing the relevant knowledge and experience in a candidate is often key, but will they fit into the company culture? Having a candidate with good job-fit but not culture-fit leads to poor retention rates and replacement costs. Finding a candidate that aligns with the values and goals of the company will decrease the likelihood that you will need to replace them. Attracting and engaging candidates with your employer branding, built through candidates' experiences with your company, as well as the culture and values presented by the organisation, is essential to finding the right fit.

Introduction
\- 2 -

We at Talegent believe that to find the right candidates, we need to focus on more than just psychology. In partnering with clients to help them identify and select candidates for the new age, Talegent delivers creative solutions for predicting human performance by combining the latest psychometric science, data analytics, technology, and design to maximise engagement and predictive accuracy. Talegent is improving the effectiveness of traditional assessment measures by enhancing the candidate experience, streamlining the application process, providing candidates with feedback, and shortening the actual measures as much as possible – while still maintaining psychometric validity.

With the nature of work changing due to increasing technological capabilities, the competencies of the future are changing as well. They now combine hard and soft skills such as technical ability, complex problem solving, and social skills. These can be difficult to assess, but artificial intelligence lets candidates respond in a variety of unstructured, natural ways. Using an objective approach to select candidates earlier in the application process reduces training time and predicts candidate performance better.

\- 3 -

Eventually, the world will progress so fast and far that those left behind can no longer catch up. Getting ahead of the game must become a top priority, and HR plays a crucial role in getting their company ready for the future. But how can we do that? How do we grow employees into leadership roles? Long-term strategies need to be put in place to solve these problems, and that starts with recruitment. The Paradox of Hiring will show you the ease of how technology can refine and improve your processes for screening, selecting, and developing the best candidates.
\- 4 -
\- 5 -

1

What are competencies and why are they important?

Competencies are abilities or attributes that are key to effective performance within a particular job. They demonstrate how a cluster of related knowledge, skills and abilities, along with personal attributes and tendencies, are applied in the context of specific job requirements.

More precisely, we define competencies as underlying, measurable characteristics of an individual that are reflected in observable behaviours1, which in turn drive successful performance in the workplace. They are the result of the abilities, attributes and tendencies that an individual possesses. When measured with accurate tools, such as the Talegent PATH personality questionnaire, competencies can distinguish between high and low performers in the workplace.2

Difference between competencies, KSAs, and job analysis

KSAs, or knowledge, skills, and abilities, are a collection of specific learned capabilities that are acquired through practise or training and relate to carrying out a task well. These can include an employee's knowledge within a particular area, their skills, and their capacity to learn about a topic further.

1 Leigh et al., "Competency Assessment Models," 463-473.

2 Rodriguez et al.,"Developing Competency Models," 309-324.

How to select for job specific competencies

Competency Models

\- 6 -

The figure below illustrates the components that competencies often encompass.

Job analysis looks at what is required for the job and defines the position in relation to the tasks that are necessary to perform it. Competency models focus on how, by studying people who do the job well and defining the job by the characteristics and behaviours of these people.

Competency modelling can help distinguish between an organisation's top and bottom performers and show how proficiency of competency changes with position level.

Review of competency models

Competency models are not without their critics and difficulties. Many issues have been raised concerning their validity, predictive ability, and general lack of empirical evidence to support each model. Competency models are sometimes argued to be too generic, or lacking evidence to support the choice of competencies within the model, often relying solely on face validity. Furthermore, they can often lack empirical data demonstrating a significant, positive relationship between the use of competency models and individual job performance or organisational success.3 Psychologists have debated many of these issues among themselves in relation to competency models of leadership. Some purport that competency models are useless because they often assume:

3 Markus et al., "Confounded by Competencies?" 117-126.

\- 7 -

A single set of characteristics adequately describes all effective leaders,

Characteristics are independent of each other and the context,

Having 'more' competencies makes a person a better leader (as opposed to having a combination of strengths and weaknesses)

As competency models are typically developed as bespoke for an organisation, there is no 'ideal' number of competencies. Research recommends the inclusion of 10 to 20 competencies, allowing models to be comprehensive and useful without being cumbersome or overwhelming.4

In response, other psychologists have stated that competency models have a long way to go, but are still a valuable resource for both individuals and organisations.5 While not all models are well researched or developed, they were created to link to particular knowledge, skills, and abilities, which are well known to relate to individual performance and organisational success. They are also useful for self-development purposes and can help HR professionals to summarise a range of useful leadership behaviours which can then be used in selecting or developing new leaders.

From an organisational perspective, competencies are helpful because they allow senior management to openly communicate which behaviours are important, assess the performance of individuals, and link competencies to the strategic goals of the business. Additionally, they can provide an integrated model of behaviour that is relevant across many positions and leadership situations. It is concluded that while current competency models are far from being faultless, they still serve a variety of purposes for individuals and organisations. As with all scientific endeavours, they are continuously being improved upon by successive approximations, and can only stand to become more robust and valuable in the future

4 Hollenbeck et al., "Theoretical and Practitioner Letters" 398-413.

5 Hollenbeck et al., "Theoretical and Practitioner Letters" 398-413.
\- 8 -

What is a competency model? How do you measure competencies?

A competency model is an underlying construct framework that provides a rational, consistent and practical basis for the purpose of understanding people's behaviours at work and the likelihood of being able to succeed in specific roles and environments.

Psychometric assessments are useful to talent management professionals who focus on implementing strategic HR processes to help maximise the performance of an organisation's human capital. They are tied to measurable competencies that are designed to assess candidates' personality across a variety of domains. These assessments are capable of identifying how an individual is likely to conduct themselves in the workplace and recognises their strengths and weaknesses relative to a relevant population. Psychometric tools can effectively evaluate a variety of individual characteristics including sales potential, conscientiousness, cognitive ability, customer service potential, interpersonal effectiveness, and leadership ability, all of which have been proven to be essential for successful performance in a variety of jobs.

The Talegent competency model underpins all of Talegent's PATH personality assessments. The model informs the reports of the PATH personality questionnaire, providing a logical, practical, and consistent approach to describing candidates' results and effectively summarising the types of behaviours candidates are likely to display in the workplace. To do this, each competency is made up of scales from the PATH personality questionnaire which have been specifically selected to translate candidates' results into a series more meaningful and relevant messages. In some cases, these are combined with relevant cognitive results, so that the competency contains a blend of personality and cognitive components.

For example, an individual's scores on the PATH personality scales of Compliant, Reliable and Meticulous can be grouped together to give an overall picture of Adherence, one of the PATH competencies. In doing 
\- 9 -

so, the PATH Competency Framework can offer an advantageous indication of whether an individual is likely to succeed in a particular role.

The PATH assessments can be applied to roles with any number of applicants, whether you are shortlisting applicants for a leadership role position or narrowing down a pool of graduate applicants to find potential top performers.

Some of the primary uses of a competency model after recruitment is to support organisational change and development. This can include evaluating employees on skill sets and supporting their development of those that may be lacking. In using competency models, employers can accurately identify and measure which competencies an employee may need to develop. When managing changes in the organisation, such as promotions or restructures, organisations are able to ensure retention of key skills, and that peoples' capabilities and positions match.

Key aspects of the competency model

A usable competency model must contain observable and measurable competencies. The competencies need to be behaviourally anchored – focusing on behaviours and the 'how', rather than on actions and outcomes. A competency model should consider future-oriented job requirements and take into account the potential shifts in organisational vision, needs, and skill requirements. The chosen model should reflect the organisation; even if you do not have a tailored competency model, it is important that the one used reflects your organisation's culture. This can be done by adapting the language used, so that it relates to the organisational context and vernacular.

The PATH Competency Framework covers a comprehensive range of job-relevant competencies including previous models developed for our clients and models from other providers. There are five general clusters that cover 23 different competencies in an integrated model that can be applied across all levels and areas of an organisation.

This model brings together particular KSA's which are well known to relate to individual performance and organisational success, and 
\- 10 -

translates them into competencies that are relevant and meaningful to organisations. It allows senior management to openly communicate which organisational behaviours are essential and can be used to link leader behaviours to the strategic directions and goals of the business.
\- 11 -

\- 12 -

Best practises in competency modelling

When using competency models, it is important to maintain best practise in order to collect and interpret the information gathered correctly.

To gather the correct information, the competencies need to be defined and linked to the organisation's goals and objectives. This way they can be easily tied to strategy and employee direction, this includes having a distinct label and detailed description. Competencies should also be defined at different levels of proficiency and can then be used to measure employees at all stages of the organisational hierarchy. When defined in terms of highly observable behaviours they can be used to motivate employees to develop skills and enable managers to assist in developing them.

Organisations should be measuring an appropriate number of competencies at the right level of detail. As each position is different, there is no ideal number of competencies to measure; however a smaller set of more specific competencies is better than a bigger amount that are only loosely defined. Using a competency library is a good starting point as it ensures all relevant competencies are considered.

Why use competencies?

By measuring and developing competencies, organisations are better able to set effective and valid criteria for performance and encourage personal development. Employers can identify and train for any gaps in abilities and skills in current employees, developing them to the best of their abilities, and efficiently hire to fill any remaining skill gaps. Recruiting with competencies can help build the team and can also reduce hiring cost, time, and future training.

Competences can be linked to organisational objectives and strategy; this can improve an organisation's ability to turn their goals into productive employee behaviour. This can be done by measuring existing competencies to better match employees to projects that utilise and develop their strengths. It also helps to ensure the retention of essential staff when undergoing organisational changes. 
\- 13 -

Competencies can be applied across HR functions to align HR systems into a standard set across departments. By developing them from the top down, an organisation can more easily consider the current and future competency requirements needed to implement change in the organisation.

Benefits and applications of a competency model

Competencies are helpful for management as they assist in communicating which behaviours are important for employees to maintain and can help assess individual performance. They can be used to link behaviours to the strategic directions and goals of an organisation, which helps provide an integrated model of leadership and behaviours that are relevant across the organisation.6

Competency models can help HR professionals to summarise a range of useful leadership behaviours which can then be used in selecting or developing new leaders. They are useful for all aspects of the employee lifecycle including selection, and professional self-development, performance appraisal and succession planning processes.

As competency models can be effectively tailored to specific briefs, such as for a particular job, position level, or industry; well-developed competency models are cost and time effective while producing a consistent and high-quality analysis for organisations.

Benefits of a competency-based approach include being able to identify behavioural standards of high performance. This helps in providing a specific assessment of strengths and areas for developmental, while also providing information on how to develop or enhance each area.

For the company:

Competency models can streamline expectations for performance and provide a systematic approach towards professional development, which can increase the effectiveness of training and provide data on development.

6 Sanghi, The Handbook of Competency Mapping.
\- 14 -

A competency model provides a common framework for how to communicate and reinforce corporate strategy, culture and vision. It provides common, organisation-wide standards for career levels that enable employees to move across business boundaries, offering common understanding and requirements of specific roles.

For managers:

Competency models provide more objective performance standards which help clarify performance expectations and foster open communication. A competency-based approach creates a base for more objective dialogues between managers and their direct reports or teams.

For training and recruitment:

By measuring specific competencies, employees can focus on the training needed to bridge any skill gaps they may have or build on the competencies they already possess. Long-term, employees will be more focused and will begin to perform to increased expectations.

Competency models can improve the accuracy and ease of hiring as employers are able to hire for the specific competencies that a position requires. When recruiting, competency models are the foundation of assessment centre design. As competencies are based on the behaviours a candidate possesses, and not the actions or outcomes of those behaviours, it is important to measure them correctly when recruiting.

Competency models function to create a productive work environment in which employees and managers are able to assess and develop their skills. Additionally, they allow employers to recruit candidates who best fit their organisation. When used correctly, these aspects can work together to increase job satisfaction and improve employee retention, stemming from an improved person-job fit.

Key competencies for effective leadership

Leadership styles can vary between organisations and from person to person, but it remains one of the most important factors in running an organisation. There are vast differences in how well companies 
\- 15 -

execute basic tasks like setting targets and grooming talent, and those differences matter. Firms with strong leadership processes perform significantly better on high-level metrics such as productivity, profitability, growth, and longevity.7

Research findings suggest that managerial competencies are broadly similar in importance across cultural environments but can differ in response to the work environment.8 Core management practices are essential when running a business and can't be taken for granted.

Good Management Correlated with Strong Performance

Figure 1. Good Management Correlated with Strong Performance9

7 Sadun et al., "Why Do We Undervalue Competent Management?"

8 Chong, "Managerial Competencies and Career Advancement," 345-353.

9 Sadun et al., "Why Do We Undervalue Competent Management?"

\- 16 -

As competency models are typically customised to an organisation, no empirical evidence exists to support many of the models in use by organisations today. Most models rely strongly on face validity, whereby the competencies that make up the model intuitively look and sound like they would be necessary for a particular role.

A study that investigated the existence of a broad set of competencies that exist across organisations in both British and Singaporean samples, found evidence of nine common competencies that could differentiate between high and low performance in management level professionals.10 These competencies included: strategic perspective, analysis and judgment, planning and organising, managing staff, assertiveness and decisiveness, oral communication, energy and initiative, interpersonal sensitivity, and adaptability and resilience.

Similarly, a recent study asked 195 leaders in 15 countries over 30 global organisations to choose the 15 most important leadership competencies from a list of 74.11 The competency groups that rose to the top were: strong ethics and safety, self-organisation, efficient learning, nurtures growth, and connection and belonging.

A well-organised leader will enable their workplace to run smoothly and encourage their employees to also build on their organisational skills. A leader with high ethical standards conveys a commitment to fairness, instilling confidence that both they and their employees will honour the rules. Similarly, when leaders clearly communicate their expectations, they avoid blindsiding people and ensure that everyone is on the same page.

Competencies associated with planning, organising and motivating others can be used to distinguish rapid career-advancing managers from those who stagnate, or experience slow-growing careers. Well-managed firms are more profitable, grow faster and are less likely to crash than organisations that lack managers with these key competencies.12

10 Chong, "Managerial Competencies and Career Advancement," 345-353.

11 Giles, "Important Leadership Competencies".

12 Sadun et al., "Why Do We Undervalue Competent Management?"
\- 17 -

The Top 10 Leadership Competencies, Grouped Into Five Themes

Figure 2. The Top 10 Leadership Competencies, Grouped Into Five Themes 13

Competencies and Artificial Intelligence

Using artificially intelligent (AI) systems within HR, such as for recruiting, involves training the systems on massive data sets of candidate behaviour that are matched to previous hiring decisions or work performance. This training process brings human intelligence into systems that support recruiters' decision-making and enables them to focus on the more strategic elements of their roles. It is essential for AI technology to work alongside HR and recruiters and not to replace them14. In their recent Global Human Capital Trends Report, Deloitte found that leading companies are recognising that AI must be used to

13 Giles, "Important Leadership Competencies".

14 Goldberg, Interview.

\- 18 -

augment human decision-making, rather than replacing it15. Human oversight of AI systems is required to ensure that the AI system is performing optimally. By incorporating AI technology in this way, organisations are able to increase the speed and quality of human performance, rather than replace roles.

As competency models offer a standardised approach to determining the requirements for each job, they are critical to effectively leveraging AI. Using artificial intelligence systems requires a standardised way of measuring the requirements of any job, which competencies can help provide. To get the most from AI in HR, your competencies need to be16:

Clearly defined

Consistent across the business

Differentiated by function, role, or level

Updated at appropriate intervals

Used to inform decision making in all areas of HR

Competencies in AI recruitment

With the internet, the volumes of candidates applying for jobs has drastically increased, and the time expected to hear back has decreased. With this increased number of applications, it is practically impossible for recruiters to individually screen all the candidates for a given role in an objective way, let alone in a reasonable timeframe. This is an area that can be supplemented with online application systems and video interviewing, as well as with AI. Artificial Intelligence can be used to identify job requirements for specific positions, along with attributes that indicate a candidate is suited to a position. They can then rank candidates based on selection tools, for a final human decision.17

Assessing the soft skills and competencies required for the future can be difficult18, but with competency-based AI systems it can be made easier and more efficient.

15 Deloitte, 2018 Global Capital Trends.

16 Guenole et al., Competencies in the AI Era.

17 Guenole et al., Competencies in the AI Era.

18 Lobosco, "These 4 Ideas Are Shaping the Future"
\- 19 -

Measuring the competencies of tomorrow

A 2018 report by Deloitte19, which surveyed more than 11,000 HR professionals, found that as technology becomes more central to our work, organisations are increasing their focus on hiring for essential skills like complex problem solving, cognitive ability, and social skills. Hence it is crucial to assess these high demand skills in future talent.

Figure 3. Expected emphasis on workforce skills as AI/robotics are integrated.

The skills and abilities that will be important over the next decade have been an area of intense focus for organisations, governments, and special interest groups. Several reports from these groups have found that over the next decade the following skills will be increasingly crucial for work:

Technical skills

Cognitive ability

Data analysis, interpretation, visualisation, and communication

Interpersonal skills such as verbal and written communication and collaboration

Complex problem solving

Judgment and decision making

Growth mindset and life-long self-directed learning

19 Deloitte, 2018 Global Capital Trends.

\- 20 -

The competencies of the future combine hard and soft skills such as technical ability, complex problem solving, and social skills. These can be difficult to measure using traditional assessments but are increasingly being measured through AI-powered assessments.

Competency models can improve the accuracy and ease of hiring by allowing employers to hire for the specific competencies that a position requires. By knowing which future skills and competencies are needed in the workforce, businesses can make sure they form part of candidate assessments, enabling them to hire for the future. A competency model creates a framework to promote key organisational strategies, providing an integrated model of leadership and behaviours that are relevant across the organisation. They are useful for all aspects of the employee lifecycle including selection, professional development, performance appraisal, and succession planning.

Key Points

Competencies turn drive successful performance in the workplace.

The competencies of the future combine hard and soft skills such as technical ability, complex problem solving, and social skills.

Competency models can improve the accuracy and ease of hiring by allowing employers to hire for the specific competencies that a position requires.

These can be measured through AI-powered assessments.

A competency model forms a framework to promote key organisational strategies and behaviours that are relevant across the organisation.
\- 21 -

Chong, E. 2013. "Managerial Competencies and Career Advancement: A Comparative Study of Managers in Two Countries." Journal of Business Research, 66 345-353.

Deloitte. 2018. "2018 Global Capital Trends." Accessed 06 10, 2019. https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2018/ai-robotics-intelligent-machines.html..html

Giles, Sunnie. 2016. Important Leadership Competencies, According to Leaders Around the World. 15 03. Accessed 06 27, 2019. https://hbr.org/2016/03/the-most-important-leadership-competencies-according-to-leaders-around-the-world.

Goldberg, Ken, interview by Frieda Klotz. 2018. How AI can Amplify Human Competencies (2018 08).

Guenole, Nigel, Chris Lamb, and Sheri Feinzig. 2018. Competencies in the AI Era. New York: IBM Corporation.

Hollenbeck, G.P., M.W. McCall, and R.F. Silzer. 2006. "Theoretical and Practitioner Letters: Leadership Competency Models." The Leadership Quarterly, 17 398–413.

Leigh, I.W., I.L. Smith, M.J. Bebeau, J.W. Lichtenberg, P.D. Nelson, S. Portnoy, N.J. Rubin, and N.J. Kaslow. 2007. "Competency Assessment Models." Professional Psychology: Research and Practice, 38 463-473.

Lobosco, Mark. 2019. These 4 Ideas Are Shaping the Future of HR and Hiring. 10 06. https://business.linkedin.com/talent-solutions/blog/trends-and-research/2019/global-recruiting-trends-2019

Markus, L.H., H.D. Cooper-Thomas, and K.N. Allpress. 2005. "Confounded by Competencies? An Evaluation of the Evolution and Use of Competency Models." New Zealand Journal of Psychology, 34(2) 117-126.

Rodriguez, D., R. Patel, A. Bright, D. Gregory, and M. K. Gowing. 2002. "Developing Competency Models to Promote Integrated Human-Resource Practices." Human Resource Management, 41(3) 309-324.

Sadun, Raffaella, Nicholas Bloom, and John VanReenen. 2017. Why Do We Undervalue Competent Management? 9. Accessed 07 05, 2019. https://hbr.org/2017/09/why-do-we-undervalue-competent-management

Sanghi, Seema. 2007. The Handbook of Competency Mapping: Understanding, Designing and Implementing Competency Models in Organizations. California: Sage Publications Inc.

CHAPTER ONE: REFERENCES
\- 22 -
\- 23 -

2

What is a value?

Values represent the belief system a person or organisation holds about what is important to them. For individuals, values underpin decisions and behaviours; for organisations, they provide a guide for employees for how they should behave.1 Workplace values drive the attitudes and behaviours that the company wants to encourage.

Employee Values are actions and behaviours that people seek to reinforce in themselves and others. Individual values are usually implicit and tend to align with attitudes and personality.

Organisational Values are the behaviours that the organisation explicitly states that it wants to see across all employees throughout the hierarchy. They provide employees with a guide for how they should behave across situations.

Organisational values often manifest as the corporate mission or vision statement, providing a guideline for how the organisation will behave and engage with customers and the community. Aligning formal values with actual practice is critical in promoting the values of ethics and integrity.2 Having values that are upheld by management, through policies and actions, is important to prevent the values simply being 'buzz words' that hold little meaning or relevance to employees. Values and culture are often discussed within the same context, as team or organisational culture is a combination of the policies, values, and behaviours upheld.

1 Knight-Turvey and Maierhofer, "Person-Organisation Fit and Employee Proactivity".

2 Fichter, "Do the Right Thing," 69-84.

Why person culture fit is important

Values
\- 24 -

Cultural Fit

Your organisational culture is made up of the workplace environment, values and ethics of the organisation. Person-culture fit is the degree of match between the values, purposes, and goals of employees, and those of the organisation. Greater alignment between an individual's values and an organisation's values promotes higher levels of happiness at work.3 Shared values are positively related to constructive work attitudes, including employee satisfaction, commitment, and involvement.4 This means values are a good indicator to an individual as to whether they "fit" with an organisation.

Benefits of person culture fit

Well-thought-out values that are implemented throughout the organisation can help create a high-performance culture.5 Employees aligned with the values and direction of the company usually have increased on-the-job satisfaction, engagement and resilience – leading to decreased turnover.

Job Satisfaction

One of the most common positive outcomes to value compatibility is job satisfaction. The basic definition of job satisfaction is how content an individual is with their job. A more scientific definition states that job satisfaction is an enjoyable psychological situation that results from having appraised one's job experience.6 In short, when employee and organisational value align, staff are more likely to be happy and content at work.

Engagement

The second domain where person-culture fit may manifest is work engagement. Employees that fit well with the company are likely to be more committed and confident, whereas teams work better when they have the same core values and aligned goals. When an employee

3 de Sousa and Porto, "Happiness at Work," 211-220.

4 Paarlberg and Perry, "Values Management" 387-408.

5 Friedman, "How to establish values"

6 Locke and Latham, "Work Motivation and Satisfaction" 240-246.
\- 25 -

has value compatibility with a workplace, they are more likely to be engaged in their job and the organisation than those who do not.

Resilience

Another benefit of person-culture fit is the positive effect it has on individual resilience and grit. A lack of match between an employee and the organisational values can affect employee well-being by creating a significant source of exhaustion. This can happen when organisational demands are not aligned with the employee's resources.7 Research suggests that when an employee has compatible values with a company, it will lead to greater resilience, as individuals are likely to have the resources to deal with adversity.

Increased Retention

Employees who do not share the same values as the organisation may feel dissatisfied and are more likely to leave, while those who do share the values are more likely to remain. Companies with a strong culture will find that their employees who believe in the goals and values of the business are generally more productive and motivated to stay.

Selecting for cultural fit

Cultural fit is becoming one of the essential criteria in the process of recruiting for a job. Candidates are looking for a company with values and a culture that aligns with their own specific needs, ideas, and personalities, just as much as employers are looking for employees with good 'fit'.

Candidate self-selection

With the internet and the uptake of social media, most candidates begin the process of selecting for cultural fit before they even apply for a role. As 70% of 18-34-year olds have found jobs through social media8, it is important that organisations can connect with potential candidates through social media channels and showcase their employer brand. An employer brand is the perception by current and prospective

7 Roczniewska et al., "How Person-Organization Fit Impacts Employees"

8 Slater, "Employer Branding".
\- 26 -

employees of what it's like to work for your firm. As companies with great branding gain twice as many applicants compared to companies with poor branding9, it is vital to use it as a tool to promote your unique organisational culture. Branding allows candidates to self-select for their best fit prior to application.

Employer selection

Assessing for cultural fit first eliminates the candidates who won't align with the principles, ethos, and behaviours of your company. The fit between an individual and the organisation is incredibly important because having candidates who are engaged with your culture and values will create a more productive workforce.10 As a result, when assessed correctly, there are usually higher retention rates and lower turnover.

In order to assess applicants for their fit with an organisation, it is important to understand what the culture and needs of the organisation are. By monitoring the work environment and using job analysis, employers can infer the abilities, skills, personality characteristics, and values required for each role. Using an application process that allows both the organisation and the individual to assess fit will ensure that the best-suited candidate is selected.

Using a values model helps to measure an applicant's value alignment with the organisation. The model can be developed from the organisation's understanding of their values and culture or can be adopted from an existing one, such as the Talegent PATH values model.

9 Career Arc, The State of the Candidate Experience.

10 Bowen et al., "Hiring For the Organization, Not the Job," 35-51.
\- 27 -

Structured interviews can be a good way to help assess cultural fit alongside value assessments. Here are some questions that can help determine culture fit in an interview11:

What type of culture do you thrive in? (Does the response reflect your organisational culture?)

What values are you drawn to, and what's your ideal workplace?

Why do you want to work here?

How would you describe our culture based on what you've seen? What appeals to you about it?

What best practices would you bring with you from another organisation? Do you see yourself being able to implement these best practices in our environment? How?

Tell me about a time when you worked with an organisation where you felt you did not fit well with their culture. What made you feel this way?

PATH Values Model

The PATH Values Model is designed to be used to measure a candidate's values and compare these with the organisation. The model is used in both of Talegent's Values solutions: Values Insights, and Values Alignment. The former, Values Insights, gives clients an option of using a traditional assessment framework to measure a candidate's affinity with the fifteen values that form the Talegent Values Model. The second tool, Values Alignment, is a short version of Insights which is designed for use during pre-screening and measures the 4 or 5 values most crucial to an organisation in an interactive framework with real-time feedback.

11 Bouton, "Recruiting for Cultural Fit".
\- 28 -

The Talegent Values Model contains fifteen values split across five clusters, which are outlined below.

Altruism

Exhibiting a selfless desire to help and support others, even at their personal expense. Willing to 'go the extra mile' for people and derives pleasure from improving the lives of others in any way possible.

Collaboration

Being driven to work closely with others, promoting team unity and encouraging the sharing of tasks and ideas to achieve team goals.

Social Responsibility

Recognising that helping society helps everyone and striving to achieve this through actions. Works for the 'greater good', placing collective needs above commercial, individual, or team needs.

Learning

Adopting a growth mindset, being curious about the world. Passionate about expanding knowledge and skills in multiple areas, enjoying the experience of learning as well as the outcome.

\- 29 -

Passion

Valuing positivity, enthusiasm, and fun. Ensuring they bring energy and a 'can-do' attitude to their work, no matter the task. Striving to be captivated.

Recognition

Being motivated by recognition for personal achievements and effort. Thriving on reward, public praise, and reinforcement from others.

Diversity

Wanting an environment with a diverse range of people and perspectives. Valuing individual differences, and actively seeking to include unique viewpoints.

Integrity

Acting ethically, following their morals and beliefs and doing the right thing despite the difficulty. Following through on their promises.

Justice

Wanting fair treatment and equal opportunities for all. Considering others when making decisions to ensure no one is disadvantaged, prioritising fairness over standardisation.

\- 30 -

Ownership

Being accountable for the decisions, outcomes, and consequences of your work. Even when things go wrong, retains accountability and does not disengage.

Excellence

Setting their own high standards of achievement and striving to meet these. Taking pride in delivering top quality work, often delivering beyond requirements.

Innovation

Generating new ideas and approaches, feeling excited about being at the 'leading-edge'. Looking for new technologies to utilise and aiming to break away from tradition.

Balance

Achieving harmony between work and other aspects of life. Managing workload effectively, being transparent about commitments, and adjusting their energy or effort based on demands.

Safety

Being in a safe environment where risks are minimised. Actively monitoring potential hazards and taking action to mitigate these. Believing in the value of enforcing and adhering to safety processes.

Structure

Operating within clearly defined parameters, knowing how the organisation works and exactly what is expected of them. Appreciating order, clarity, and consistency.

\- 31 -

Figure 1. Talegent PATH Values report

The Talegent PATH values tools offer an interactive report for recruiters to help match potential employee values to an organisation in order to get the most aligned candidate for the role. The values assessment report indicates what is important to a candidate, what they are likely to value in their working environment, and what motivates them. The information contained within the reports is intended to support selection, onboarding and development decisions. Specifically, the report is designed to provide information about an individual's self-reported values, assess the strength of their alignment with each value, and enable recruiters to draw on hypotheses for further exploration.

Values Profile

MOST ALIGNED

ALIGNED

LESS ALIGNED

Social Responsibility

MOST ALIGNED

Balance

ALIGNED

Excellence

LESS ALIGNED

Ownership

ALIGNED

Diversity

MOST ALIGNED

\- 32 -

How values link to competencies

Values are intangible; they form an internal code that influences how we experience and interpret the world. Values are the beliefs or ideals shared by those in an organisation, and they are a guide that specifies how those in the organisation should behave.12 Competencies are underlying, measurable characteristics of an individual that are reflected in observable behaviours13 that employees demonstrate on the job. They are a result of the various knowledge, skills and abilities an employee may possess and utilise at work. Competency models define on-the-job behaviours that can be observed and measured by the people around us. They enable organisations to translate their values into day-to-day workplace behaviours that can be identified, measured, supported, and developed using specific HR tools.14

Remember what culture fit is not

Hiring for culture fit comes down to making sure employees respect and align with your company values. What it doesn't mean is overlooking different cultures and lifestyles or dismissing personal values with which you disagree.15 Different people can have differing personal values based on their background, upbringing, generation, and culture. For example, research has shown that Generation Y employees tend to place high importance on autonomy and work-life balance, while Generation X employees often value freedom and autonomy16. However, this does not mean that they cannot work well together or align themselves with the same organisation's goals.

A risk when hiring for culture fit is that a team may be built with people who think and act the same way.17 This can mean that while the team may work well together, it drastically limits the ideas and developments

12 Knight-Turvey and Maierhofer, "Person-Organisation Fit and Employee Proactivity".

13 Leigh et al., "Competency Assessment Models," 463-473.

14 Beckett, "The Difference Between Core Competencies and Values".

15 Maza, "What It Means To Hire For 'Culture Fit'"

16 Cennamo and Gardner, "Generational Differences in Work Values," 891-906.

17 Maza, "What It Means To Hire For 'Culture Fit'"
\- 33 -

that they can produce. Developing well thought out organisational values can help increase diversity while building a positive company culture. It can enable employees to reflect on their personal goals and values, which can impact their performance and align them with the organisation further. For example, reflecting on core personal values improves women's performance in competitive environments, reducing gender performance gaps.18 By having a diverse team, employers can increase innovation and often productivity through a broader range of experience, opinions and ideas.19

18 Kinias and Sim, "Facilitating Women's Success in Business," 1585-1597.

19 Leonardi and Contractor, "Better People Analytics," 70-81.

Key Points

Values represent the belief system a person or organisation that underpin decisions and behaviours.

Greater alignment between an individual's values and an organisation's values promotes higher levels of happiness at work

Employees aligned with the values and direction of the company usually have increased on-the-job satisfaction, engagement and performance – leading to decreased turnover

Developing well thought out organisational values can help increase diversity while building a positive company culture
\- 34 -

Beckett, Sarah. 2015. The Difference Between Core Competencies and Val-ues. 09 24. Accessed 07 05, 2019. https://resources.hrsg.ca/get-start-ed-with-competencies/the-difference-between-core-competen-cies-and-values

Bouton, Katie. 2015. Recruiting for Cultural Fit. 07 17. Accessed 07 10, 2019. https://hbr.org/2015/07/recruiting-for-cultural-fit.

Bowen, David, Gerald Ledford, and Barry Nathan. 1991. "Hiring for the Organization, not the Job." Academy of Management Perspectives 5, no. 4 35-51.

Career Arc. 2016. The State of the Candidate Experience. Recruitment Study, Career Arc.

Cennamo, Lucy, and Dianne Gardner. 2008. "Generational Differences in Work Values, Outcomes and Person-Organization Values Fit." Journal of Managerial Psychology 23(8) 891-906.

de Sousa, Juliana, and Juliana Porto. 2015. "Happiness at Work: Organiza-tional Values and Person-Organization Fit Impact." Paidéia (Ribeirão Preto), 25(6) 211-220.

Fichter, Rachel. 2018. "Do the Right Thing! Developing Ethical Behavior in Financial Institutions." Journal of Business Ethics 151(1) 69-84.

Friedman, Amelia. 2018. How to Establish Values on a Small Team. 04 13. Accessed 07 03, 2019. https://hbr.org/2018/04/how-to-establish-values-on-a-small-team

Kinias, Z., and J. Sim. 2016. "Facilitating Women's Success in Business: Interrupting the Process of Stereotype Threat through Affirmation of Personal Values." Journal of Applied Psychology 1585-1597.

Knight-Turvey, Neal, and Naomi Maierhofer. 2005. "Person-Organisation Fit and Employee Proactivity: Do Shared Values Matter?" Engaging the Multiple Contexts of Management: Convergence and Divergence of Man-agement Theory and Practice: Proceedings of the 19th ANZAM Conference. Canberra.

Leigh, I.W., I.L. Smith, M.J. Bebeau, J.W. Lichtenberg, P.D. Nelson, S. Portnoy, N.J. Rubin, and N.J. Kaslow. 2007. "Competency Assessment Models." Professional Psychology: Research and Practice, 38 463-473.

Leonardi, Paul, and Noshir Contractor. 2018. "Better People Analytics." Harvard Business Review., 11-12: 70–81.

Locke, Edwin A., and Gary P. Latham. 1990. "Work Motivation and Satisfaction: Light at the End of the Tunnel." Psychological Science 1(4) 240-246.

Maza, Vivian. 2018. What It Means To Hire For 'Culture Fit,' And How To Do It Right. 09 28. Accessed 07 10, 2019. https://www.forbes.com/sites/forbeshumanresourcescouncil/2018/09/28/what-it-means-to-hire-for-culture-fit-and-how-to-do-it-right/#61480f587986

CHAPTER TWO: REFERENCES
\- 35 -

Paarlberg, Laurie E., and James L. Perry. 2007. "Values Management: Align-ing Employee Values and Organization Goals." The American Review of Public Administration, 37(4) 387-408.

Roczniewska, Marta, Sylwiusz Retowski, and E. Tory Higgins. 2018. "How Person-Organization Fit Impacts Employees' Perceptions of Justice and Well-Being." Frontiers in Psychology.

Slater, Ben. 2017. Employer Branding. 07. Accessed May 27, 2019. https://beamery.com/blog/employer-branding
\- 36 -
\- 37 -

3

Diversity is important. We live in a global world that is massively interconnected, leading to better performance for more diverse companies.1 When recruiting, it is crucial to find employees with the necessary abilities as well as ones who are a good fit for the position and organisation. Organisational culture-fit does not mean that each employee looks, acts and thinks the same, but rather that their work goals and values align with those of each other, and with the organisation.2 It is important to maintain a fair process which ensures the best candidates are hired based on their abilities and organisational fit.

Diverse workplaces have been proven to lead to a more profitable working environment, as well as a happier and more innovative workforce. A key way to develop diversity within the workplace is to work on the talent pipeline: attracting, developing, mentoring and retaining the next generation of global leaders at all levels of the organisation.3

Companies need to be aware that diversity is not the same as inclusion. Employers and organisations need to give the same level of development opportunities, and potential of promotion, to all their employees to maintain an inclusive environment.

1 Lorenzo and Reeves, "How and Where Diversity Drives Financial Performance".

2 de Sousa and Porto, ""Happiness at Work," 211-220

3 Hunt et al., Diversity Matters.

The importance of fair recruiting and a diverse work place

Fairness & Diversity
\- 38 -

Benefits of a diverse workforce

Diversity has a positive impact on many aspects of an organisation's performance. It can help attract skilled individual employees and develop the organisation. Diversity in the workplace acknowledges that every person can contribute with different ideas and solutions.4 By working together towards a common goal using different sets of skills, diversity can help increase productivity and deliver better results by encouraging creativity and problem-solving. An example of the benefit this can have is that gender-diverse companies are 21% more likely to outperform their less diverse counterparts, and ethnically diverse companies are 33% more likely to do the same.5

Diversity management helps to:

Figure 1. Diversity Matters6

4 Sokolova, "Why Diversity Is Important In Organisations?"

5 McKay, "How Competencies Can Help You Build a More Diverse Workforce"

6 Hunt et al., Diversity Matters.

\- 39 -

Genuine diversity helps to build a stronger brand and create a positive reputation, making the company a more interesting and desirable employer. In supporting and encouraging employees to develop and build professional connections, employers can attract and retain talents. Employing people from different cultures and backgrounds can help you to compete internationally and provide enhanced customer support. A diverse workforce can optimise an organisation's ability to meet the needs of different markets and increase its global presence.7

Employee turnover costs will be reduced if people feel comfortable, valued and happy in a workplace with an ethical culture.

Diversity benefits in performance

People with different lifestyles and backgrounds challenge each other more than people with the same experiences.8 The most innovative teams have disagreements and discussion, sometimes even conflict, that can generate the creative friction necessary to produce breakthroughs.9

In a multi-country diversity study, less than 40% of the organisations studied created conditions that enabled diversity, including fair employment practices (such as equal pay), participative leadership, top management support for diversity, and open communication practices. Companies that had these practices in place had better diversity scores, and as a result, better innovation performance compared to the others. This strongly suggests that diversity represents significant earning potential for most companies. In total, the presence of these enabling factors can create up to a 12.9% increase in innovation revenue.10

Another study of 366 organisations revealed that companies in the top quartile for gender diversity were 15 percent more likely to have financial returns that were above their national industry median, and the companies in the top quartile for racial/ethnic diversity were 35 percent more likely to have financial returns above their national

7 Law at Work, "The Benefits of Diversity in the Workplace".

8 Groysberg and Connolly, "Great Leaders Who Make the Mix Work," 68-76.

9 Leonardi and Contractor, "Better People Analytics," 70-81.

10 Lorenzo and Reeves, "How and Where Diversity Drives Financial Performance".
\- 40 -

industry median (Figure 2). This correlation indicates that companies that commit to diverse leadership are more successful. The existence of the relationship is statistically significant and consistently present in the data.11

Figure 2. How diversity correlated with better financial performance12

Discrimination

While candidate selection is all about discrimination between applicants, there is a considerable difference between fair and unfair discrimination. Fair discrimination distinguishes between applicants based on their abilities and aptitudes that are related to job performance through assessments or relevant biodata such as right to work. Unfair discrimination is when candidates are discriminated against due to factors that are not based on relevant standards, or when the method of assessing is particularly unreliable.

The United Kingdom's Equality Act defines different forms of unfair discrimination13:

11 Hunt et al., Diversity Matters.

12 Hunt et al., Diversity Matters.

13 Parliament of the United Kingdom, Equality Act 2010.

\- 41 -

Direct discrimination involves treating someone less favourably because of their ethnic group or gender, and it is usually deliberate.

Indirect discrimination occurs when an employer applies a condition or requirement to applicants (such as obtaining a score above a particular point on a test) and this requirement is such that one group (defined by gender or race) finds it considerably harder to meet the requirement. This is known as adverse impact and is often unintended.

How can unfair discrimination be recognised?

The main sign that an assessment or exercise may be discriminating unfairly is a large difference in performance for two distinct groups, such as between males and females. To ensure that a procedure is not causing a disproportionately large number of a specific gender or racial group to be rejected, the results need to be monitored and reviewed. When there are different pass rates for members of different groups, the relationship between scores and job performance should be explored. If the scores do not relate to job performance, the use of the method or exercise could be classed as unfair discrimination, or even unlawful. However, if validation shows the use of the technique is helping to select better quality people then the difference in selection rates for the groups can probably be justified.

Research has shown that the interpretation of assessment scores and exercises, and how they are used, is as crucial to the avoidance of unlawful discrimination as the actual content of the activity itself. It should be noted that the employer with an active equal opportunity policy may still be concerned with finding ways to reduce discrimination and promote fairness. Increasing the number of criteria measured, and providing adequate preparation and targeted training, can all contribute to reducing performance differences between groups.14

14 Hunt et al., Diversity Matters.
\- 42 -

Recruiting with fairness and creating a diverse workforce

By recruiting a diverse employee workforce, there will likely be an increase in creativity and innovation because workers from different backgrounds will approach problems and projects in different ways. The first step in recruiting for diversity is to attract a wide range of applicants. This can mean extending your sourcing strategy and building your employer brand. If applications are open and accessible to a broader talent pool, not just a select few people, recruiters can be confident that they are hiring the top talent.

Ensuring applicants are treated impartially during the hiring process is essential when recruiting, to both comply with legal requirements and to benefit the organisation. Fair assessments focus on the requirements of the job and testing the relevant attributes of the applicant, thereby removing human biases. When going through a fair application process, applicants will know that they've been hired based on their aptitude and are less likely to have negative feelings towards the organisation if they do not get hired.

If there is a diverse panel of people working on a project, objections and alternatives can be explored more efficiently and in different ways, which leads to well-thought-out solutions that can be readily and confidently adopted. Research indicates that the presence of women and minority members on a leadership team enhances problem-solving in the same way, since they add new perspectives.15 A team that reflects the key decision-makers, in terms of an organisation's products and services, will have a better understanding of their market behaviour and how to adjust it to the benefit of their company. Diversity helps companies react more effectively to market shifts and new customer needs.16

15 Page, The Difference.

16 Hunt et al., Diversity Matters.
\- 43 -

Diversity increases employee satisfaction and fosters positive attitudes and behaviours in the workplace. Workplace diversity increases job and life satisfaction for women and members of other minority groups, provided the workforce is diverse enough.

Ensuring fairness in assessment centres

Behavioural indicators for successful performance are the building blocks for the design of an Assessment Centre. These should be defined with a careful job analysis study and should accurately reflect the behaviours required to perform the given job. If the identification of key performance competencies through a job analysis is based on existing employees, particularly when the position is a senior management one where the proportions of minority candidates are likely to be very small, there is a risk that it could be disproportionately reflecting existing biases.

It is important to work to counteract this type of bias to create a more accurate picture of the job and to avoid working with criteria which will tend to discriminate against certain groups. Where at all possible, establish a balanced sample of existing job holders on which to conduct the job analysis study

Testing people with disabilities

It is essential, and a legal requirement, not to let the recruitment procedure hinder the employment of people with disabilities who have appropriate skills to do the job. In addition to ensuring that relevant measures are used appropriately, some disabled people may have difficulty with the mode of administration of a test or some other aspect of the selection procedure. Because of a disability, a candidate may perform the job differently which can require changes to the skills needed for the role and how they are measured, for example a deaf person may communicate with others using a minicom rather than a standard telephone. This requires some typic skill, rather than a clear speaking voice.
\- 44 -

Ethics and Bias

Recruiters need to hire from a diverse pool for a diverse workforce; however, it is essential to hire the person most qualified for the position regardless of diversity requirements. Hiring decisions made in an environment that values diversity may create tension between an organisation's diversity goals and equal employment opportunity guidelines.

Underlying reasons for bias

Research in cognitive psychology and behavioural economics over the past 40 years has established that human behaviour is heavily influenced by subconscious, instinctive, and emotional responses, rather than being under the exclusive control of rational, deliberate thinking.17 This can lead to unintended biases that are not accounted for during the selection process.

Implicit stereotypes: or "subconscious bias" is the association of people or groups with certain traits or activities, such as men with science and mathematics and women with arts and languages. Without being aware of it, these associations can powerfully influence decisions such as which candidate to hire.18

Ingroup favouritism: is a preference for people who are like us, so that an individual might choose to work with someone of the same nationality, gender, and race.

Outgroup bias: is the tendency for an individual to think that the group of people they belong to (their ingroup) is more diverse, while an "outgroup" is made up of members who appear alike or even interchangeable.19

Removing bias

Biases can be removed or minimised by training and educating people, as well as by adjusting organisational processes to take bias

17 Kahneman, Thinking, Fast and Slow.

18 Nosek et al., "Math = male, me = female, therefore math ≠ me," 44-59

19 Plous, Understanding Prejudice and Discrimination. 
\- 45 -

out of decision making. By incorporating behavioural principles in the organisation, such as through the design of diversity programmes and development of values, biases can be minimised. Diversity programs seek to increase levels of diversity and can highlight unconscious bias.20 Removing bias can lead to increased employee engagement. Behaviours do however, need to come from the top down, especially with diversity programs, as the management behaviour most likely to affect engagement is demonstrating a strong commitment to diversity.21

Key steps for successful diversity programs

Figure 3. Key steps for successful diversity programs22

One approach to reduce bias in recruitment is to define scoring criteria for each candidate and use an algorithm rather than human judgement to make decisions based on the requirements. Another technique is to nominate an individual to act as devil's advocate and challenge assumptions, such as implicit stereotypes, behind decisions. Several

20 Hunt et al., Diversity Matters.

21 Gallup, State of the Global Workplace.

22 Hunt et al., Diversity Matters.

\- 46 -

studies have shown that this approach leads to better decisions.23 A similar approach to this is creating a decision challenge team which can challenge assumptions behind decisions around the organisation.

Successful diversity programmes have clear objectives and are led from the top. They should encourage involvement from the wider organisation and have the infrastructure to actively manage against targets to hold individuals accountable for outcomes.24

Artificial Intelligence (AI)

While removing bias from a human is close to impossible, it is possible to remove them from an algorithm. The output of algorithms can be trained to be replicable and can be pre-tested to be bias-free.25

It is important to acknowledge that artificially intelligent systems are not fool proof. As people design them, there is room for them to learn unconscious biases if not tested correctly. For example, if the system is trained on a data set of employees that could be the result of prejudice, the resulting AI decisions will reflect the existing biases. By training and testing the artificially intelligent technology, the algorithm can be adjusted to account for these biases before assessment.26

The goal is to give all applicants an equal chance at being considered for a job regardless of their gender, ethnicity, socioeconomic background, or other potentially discriminating factors.

How AI can help

Artificial technology can be utilised in the initial stages of an application. In testing a candidate on their ability to solve job-related tasks, an AI system can select the top performing candidates to progress to interview or the second round of assessments. This works very similar to the blind-screening methods that assist with avoiding bias in selection methods like interview, whether it is a result of direct

23 Hartwig, "Facilitating Problem Solving," 17-31

24 Hunt et al., Diversity Matters.

25 Polli, "Can AI make your company more diverse?"

26 Tugend, "The Commonality of A.I. and Diversity". 
\- 47 -

or indirect discrimination. When blind auditions were used for orchestras, the percentage of females hired increased from 5 percent to 25 percent.27 From Fortune 500 companies through to start-ups, many firms currently have women assuming only 5% of leadership roles28, it seems that a 'blind audition' screening method is needed across the workforce. If AI systems are designed and implemented well, they can be the ultimate tool to create the kind of selection blindness that is necessary.

These technical solutions can help people with more diverse backgrounds get their foot in the door, but it is necessary to also maintain fairer hiring policies and human resource practices so that the same fairness is devoted to promotions and development opportunities for diverse employees. The potential for artificial intelligence systems to promote equality and reduce bias in the recruitment process is profound.

Case Study

It is important that an assessment method for recruitment or development won't disadvantage demographic groups, such as those separated by gender or ethnicity. Talegent assessed the adverse impact of the PATH Cognitive & Personality assessments for recruitment with a large-scale equality analysis (n=6,888 to date), investigating the mean differences between protected groups and minority groups.

The study found that there were no overall differences between males and females. Most competencies assessed showed trivial differences between males and females, which suggests that there are no meaningful differences between the male and female samples. Four competencies showed differences, and of those, only one may potentially adversely impact females during recruitment when assessed in isolation.

27 Goldin and Rouse, "Orchestrating Impartiality," 715-741

28 Polli, "Can AI make your company more diverse?"
\- 48 -

The study found that there were no overall differences between European and New Zealand Māori. Most competencies assessed showed trivial differences between European and New Zealand Māori, which suggests that there is no meaningful difference between the European and New Zealand Māori samples. Three competencies may potentially adversely impact New Zealand Māori during recruitment when assessed in isolation.

The study found that there were small differences between European and Polynesian samples. Most competencies assessed showed trivial differences between European and Polynesian, which suggests that there are no meaningful differences between the European and Polynesian samples. Seven competencies showed differences, but of those, 4 of them were in favour of the Polynesian applicants. Overall Polynesian applicants are unlikely to be adversely impacted with the use of the assessment for recruiting.

\- 49 -

Results reinforce that assessment is fair to all demographics when part of a robust recruitment process. There are no differences between demographics (such as NZ Māori and Polynesian) and the assessment is working fairly for NZ Māori . There was no systematic score difference between males and females, or European and New Zealand Māori applicants.

Diversity and Inclusion

It should come as no surprise that more diverse companies and institutions are achieving better performance. It is also suggested that diversity beyond gender and ethnicity, such as diversity of experience, is likely to bring competitive advantage for firms that are able to attract and retain such diverse talent.29

29 Hunt et al., Diversity Matters.

\- 50 -

While companies should set targets, goals, and incentives, as a way to foster a more diverse workforce, they shouldn't be used in isolation. To be truly diverse and inclusive, a company must change its culture, and that must come from the top down.30 Values and goals should be upheld by management, through policies and actions, and visible in top-level leaders.31 Aligning formal values with actual practices in diversity is critical in promoting ethics and integrity behind pure diversity goals. Given the increasing returns that diversity is expected to bring, it is better to develop a diverse workforce now, as those who don't will fall behind.

30 Tugend, "The Commonality of A.I. and Diversity".

31 Fichter, "Do the Right Thing," 69-84.
\- 51 -

Key Points

Diverse workplaces lead to a more profitable working environment, as well as a happier and more innovative workforce.

The first step in recruiting for a diverse workforce is to attract a wide range of applicants.

Successful diversity programmes have clear objectives and are led from the top leadership team.

Algorithms can be designed to be bias-free to assist with recruiting and assessing candidates.

Organisations need to give the same level of development opportunities, and potential of promotion, to all their employees to maintain an inclusive environment. 
\- 52 -

de Sousa, Juliana, and Juliana Porto. 2015. "Happiness at Work: Organizational Values and Person-Organization Fit Impact." Paidéia (Ribeirão Preto), 25(6) 211-220.

Fichter, Rachel. 2018. "Do the Right Thing! Developing Ethical Behavior in Financial Institutions." Journal of Business Ethics 151(1) 69-84.

Gallup. 2013. State of the Global Workplace. Workplace Study Report, Gallup Inc.

Goldin, Claudia, and Cecilia Rouse. 2000. "Orchestrating Impartiality: The Impact Of 'Blind' Auditions On Female Musicians." American Economic Review, 90(4) 715-741.

Groysberg, Boris, and Katherine Connolly. 2013. "Great Leaders Who Make the Mix Work." Harvard Business Review, 09: 68-76.

Hartwig, Ryan T. 2010. "Facilitating Problem Solving: A Case Study Using the Devil's Advocacy Technique." Group Facilitation: A Research and Applications Journal 17-31.

Hunt, Vivian, Dennis Layton, and Sara Prince. 2014. Diversity Matters. Research Report, McKinsey & Company.

Kahneman, Daniel. 2011. Thinking, Fast and Slow. Allen Lane.

Law at Work. 2017. The Benefits of Diversity in the Workplace. 08 09. Accessed 07 15, 2019. https://lawatworkci.com/the-benefits-of-diversity-in-the-workplace/

Leonardi, Paul, and Noshir Contractor. 2018. "Better People Analytics." Harvard Business Review., 11-12: 70–81.

Lorenzo, Rocio, and Martin Reeves. 2018. How and Where Diversity Drives Financial Performance. 30 1. Accessed 07 19, 2019. https://hbr.org/2018/01/how-and-where-diversity-drives-financial-performance

McKay, Lorraine. 2018. How Competencies Can Help You Build a More Diverse Workforce. 17 12. Accessed 07 19, 2019. https://resources.hrsg.ca/blog/competencies-diversity

Nosek, Brian A., Mahzarin R. Banaji, and Antony G. Greenwald. 2002. "Math = Male, Me = Female, Therefore Math ≠ Me." Journal of Personality and Social Psychology, 83(1) 44-59.

Page, Scott E. 2007. The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies. New Jersey: Princeton University Press.

Parliament of the United Kingdom. 2010. "Equality Act 2010." UK Public General Acts. London: Parliament of the United Kingdom, April.

Plous, Scott. 2003. Understanding Prejudice and Discrimination. New York: McGraw-Hill.

CHAPTER THREE: REFERENCES
\- 53 -

Polli, Frida. 2017. Can AI Make your Company more Diverse? 11 06. Accessed 07 8, 2019. https://www.linkedin.com/pulse/can-ai-make-your-company-more-diverse-frida-polli/

Sokolova, Siyana. 2015. Why Diversity Is Important In Organisations? 23 05. Accessed 07 19, 2019. https://www.linkedin.com/pulse/why-diversity-important-organisations-siyana-sokolova/

Tugend, Alina. 2018. The Commonality of A.I. and Diversity. 6 12. Accessed 7 20, 2019. https://www.nytimes.com/2018/11/06/business/dealbook/the-commonality-of-ai-and-diversity.html
\- 54 -
\- 55 -

Recruiters who assume that information on candidates gathered from resumes, interviews and reference checking can successfully predict future job performance, in a world where jobs are changing faster than ever, are living in the past. Organisations are increasingly applying data from candidates and using more objective applications to reduce training time and to predict candidate performance weeks, months, or even years, into the future.

Hiring practices are linked to an ever-increasing, measurable, impact on organisations financial performance1. For example, Google's data showed that only 10 percent of applicants, at best, will be top performers, and a top-notch engineer has been calculated to be worth 300 times more than an average engineer2.

Accurately predicting employee behaviour based on the limited information companies are able to collect from applicants during the hiring process seems likely to be a challenging exercise. Nevertheless, extensive research has shown that gathering employment data in a consistent and objective way, such as through assessment, is indeed predicting job performance3.

How assessments predict job performance

Research has shown that combinations of assessment techniques are most effective at predicting individual performance since the data is gathered in a consistent way across time and workplace environments.

1 Fitz-enz, How to Measure Human Potential.

2 Bock, Work Rules, 62

3 Schmidt et al., "Personnel selection." 627-670

4

Choosing among different selection methods

Selection Methods
\- 56 -

Assessments can predict an individual's behaviour because applicants are most likely to behave in a reliable and predictive manner when completing these objective measures, often whether they want to or not.

The consistency of an applicant's behaviour during the assessment journey enables the gathering of accurate data. This accumulation of data enables you to apply it in a way that validly predicts immediate and future job performance.

Although data from assessments is accurate, it doesn't mean that people are unable to change their behaviour. Employee job performance is heavily influenced by things that lie outside the world of work, but also by conscious behaviours on the job in response to the work environment. Research shows that around 50 percent of job performance can be predicted with assessments. The other 50 percent of an employee's job performance can depend on things that happen after being hired.

Clearly assessments are not a sole predictor of job performance; however, the value of applying selection assessments outweighs the costs of integrating them into your candidate selection journey. So, when properly developed, assessments are the most valuable tools for predicting on the job performance4. Thus, there are three different factors to calculate when demonstrating the value of selection assessments. Specifically, how effectively assessment predicts job performance, its ability to provide a comprehensive and diverse candidate pool, and of course, that it provides a spread of scores to enable you to select the very best candidates.

Why our instincts are not good interviewers

The challenge with interviews is that our instincts keep us from being good interviewers. Frank Bernieri reported in his 2000 research5 that judgements made in the first 10 seconds of an interview often predict

4 Schmidt and Hunter, "The Validity and Utility of Selection Methods in Personnel Psychology," 264-274

5 Prickett et al., "The Importance of First Impressions in a Job Interview" 
\- 57 -

the outcome in selecting a candidate. This study showed that the interviewer ceased collecting data ten seconds after the interviewee took a seat, and that these ten-second ratings of candidate potential correlated significantly with the final evaluation of the interview by the interviewer. This research reinforced that impressions based on a handshake and brief introduction predict the outcome of a structured employment interview.

The problem, of course, is these predictions from the first ten seconds of an interview are useless. Over 90 percent of the time untrained interviewers, which many hiring managers are, will spend their time confirming what impression they formed of the candidate, falling into the trap of confirmation bias – which is the tendency to search for one's beliefs when processing data and interpreting it accordingly6.

So, when do interviews work?

If the interview is structured, with a consistent set of questions and clear criteria to assess the quality of responses, then they can be effective. There are two types of structured interviews: behavioural, and situational.

Behavioural interviews request candidates to describe past situations with specific behaviours that match a requirement for success in the advertised role. For example, a question that starts with, "Tell me about a time...?" is a behavioural prompt for a candidate to answer with specific examples of behaviour that is relevant to, and predictive of, potential job performance.

Situational judgment interviews are where a candidate is provided with a job-related scenario. For example, "What would you do if...?". This type of interview is valid if you as an employer know what the required behaviours are for a successful on-the-job performance. If it is just your opinion of success, this situational interview approach will be ineffective. Situational interviews are often polluted by recruiters who have no on-the-job experience or context in which to evaluate a

6 Bock, Work Rules
\- 58 -

candidate's answer to the scenario, whether it is relevant or irrelevant to the job for which they are applying.

See Figure 1 for an example of interview questions that are applied effectively, where they are anchored against relevant assessment data to prompt the interviewer to follow-up accordingly.

Figure 1. Structured Interview Questions aligned with results from assessment in Talegent's PATH Competency Detail Report

Interview Questions

Negotiation

Well Above Average

Talk me through a scenario where you used your understanding of a person's or organisation's needs to better position an idea during a negotiation.

Tell me about a difficult negotiation you managed, including the techniques you used and concessions you made to achieve a good outcome.

Tell me about a time when you had to push an unpopular idea through the business to achieve something you believed in. What resistance did you meet? How did you overcome it?

2

3

1

Building Relationships

Below Average

Please share an example of a time when you have demonstrated active listening or relationship building skills to gain critical information from someone.

Describe a time when you were required to build productive relationships across a diverse work group or with people in different locations. How did you approach this? What was the outcome?

Tell me about a time where you needed to adjust your interpersonal style to really connect with someone. What were the circumstances? How did you approach the situation?

2

3

1

\- 59 -

These structured interview questions are actually measuring how a candidate solves problems. If there is a connection between the scenario, the correct answer and the candidate's response, it can be linked to low or high performance. Specifically, candidates can demonstrate their cognitive ability to enable interviewers to make a less biased judgment.

Structured interviews are predictive, and can lead to a positive candidate experience, as they are often perceived to be the fairest part of the process by candidates7.

Why aren't organisations using them more widely?

Organisations are not using structured interviews widely enough because they are challenging to develop. A structured interview needs to be derived through a thorough understanding of the job, developed together with subject-matter experts who know the job inside and out, such as high-performing incumbents and team leaders8.

Subject matter experts are essential sources of data, not just at the screening stage, but are building blocks of the entire selection process. According to the Equal Employment Opportunity Commission's (EEOC) Uniform Guidelines on Employee Selection Procedures, for selection tools to be valid, they must measure knowledge, skills and abilities that are a "necessary prerequisite to performance of critical or important work behaviour(s)"9. In order to realise the validity of a structured interview, a job analysis must be conducted to ascertain predictive data.

Interviewers need to continuously refresh interview questions to keep them relevant as jobs are changing.

What is a better way to assess candidates?

Research is showing that combinations of assessment techniques, with or without structured job interviews, are better than any individual

7 Schmidt et al., "The Validity of Employment Interviews," 599-616

8 Bohnet, "How to Take The Bias Out of Interviews"

9 Equal Employment Opportunity Commission, Uniform Guidelines on Employee Selection Procedures
\- 60 -

selection method. For example, a test of cognitive ability (which can predict over 25 percent of job performance) when combined with a measure of conscientiousness (10 percent), is better able to predict those who will be successful in a job (36 percent performance predicted), compared to a structured interview which predicts only 24 percent10. Those high in conscientiousness, or "working to completion", will not stop until the job is done, and are more likely to feel personally responsible for the task they have been assigned.

When is it useful to use employment assessments?

So if ability measures and job-related measures of working style are amongst the most valid and reliable methods in predicting on-the-job performance, then what are some of the most important reasons for using assessment?

A shorter candidate experience.

Talent assessments are cost and time effective, allowing a recruiter to optimise the candidate applicant pool. Assessments can make the recruitment process more efficient, as less time is spent with individuals who are not the optimal fit for the job, while the candidates who do have the key characteristics and the abilities to undertake role requirements are identified and engaged with more quickly.

The costs of making a wrong decision are high.

For many roles, a wrong decision has an ever-increasing cost in terms of training time, employment errors and replacement cost. For recruitment decisions, investing time in gathering data that has predictive links to job performance is a valid and proven reducer of risk.

Key capabilities are hard to change.

In particular, conscientiousness and problem-solving are two key characteristics that are very difficult to develop and may require extensive training. In some cases, they may not be able to be developed at all.

10 Schmidt and Hunter, "The Validity and Utility of Selection Methods in Personnel Psychology," 264-274
\- 61 -

Gathering objective data earlier in the candidate journey.

Not only do talent measurement assessments collect data quickly and effectively, they also provide a perspective that is not available through other lenses. Data can also be gathered with minimum effort, before valuable time is invested in interviewing.

Consistency and scalability of process.

A standardised and well-mapped candidate journey empowered by an objective collection of valid data enables less objective analysis, and allows for us as humans to make decisions in a more consistent, fairer and unbiased way.

High applicant volumes.

Increasingly, applicants can apply for multiple roles in a short space of time, which can overwhelm already stretched recruiters. This can lead to employers making decisions based on less objective data. Thus, when you have a high number of applicants and you can only hire a few, you need reliable and predictive data in order to separate the top performers early.11

So, in evaluating how well an assessment actually predicts job performance and retention, it is important to be aware of the most widely used method to understand validity. This involves applying a big data model referred to as a validity coefficient which ranges from 0 to 1. A validity coefficient of 0 indicates that a selection method has no relationship in predicting job performance and a validity coefficient of 1 means that a selection technique (e.g. assessment) predicts job performance perfectly.

In Figure 2, you can see how cognitive ability measures (0.65) and structured interviews (0.58) are both more effective than reference checking, job experience and education levels are combined (0.52). This application of big data applies correlation coefficients to explain the strength of a selection technique in determining the relationship between candidate scores and job performance. "Only 10 percent of

11 Society for Industrial and Organizational Psychology, "Employment Testing".
\- 62 -

applicants (at best) will be top performers, thus only ten percent can fall in the top decile for potential job performance12.

Figure 2. Compiled by Talegent; adapted from Schmidt, Oh, & Shaffer, (2016). The validity and utility of selection methods in personnel psychology: practical and theoretical implications of 100 years of research findings; De Meuse, Hallenbeck, Dai, & Tang, (2009). Global talent management: Using learning agility to identify high potentials around the world.

In many cases, multiple assessment scores can be combined with other candidate data. For example, utilising cognitive, personality, and interview data from within the recruitment journey enables hiring managers to make work-relevant, data-driven decisions. This provides a predictive perspective of a team member's ability and potential.

Assessments are most valuable when used to identify candidates for roles that have high levels of performance variance, compared to tasks or positions that require the candidate to undertake few cognitively demanding tasks. However, if a lot of employees are needed for non-cognitively demanding tasks, assessments can still provide value.

12 Bock, Work Rules, 62

Selection Procedures

Validity

Relative Strength of Procedure

Description

Cognitive Ability Measures

0.65

Very Strong

Relatively inexpensive and generalisable.

Structured Job Interviews

0.58

Strong

Expensive to develop and time consuming.

Assessment Centres

0.36

Moderate

Resource, time and cost expensive. Challenging to standardise and scale.

Personality based EQ

0.32

Moderate

Relatively inexpensive, standardised and useful for development.

Learning Agility

0.30

Moderate

A key measure of high-performance potential.

Situational Judgement Tests (SJT)

0.26

Moderate

Needs to be customised. Excellent for engaging candidates and providing a realistic job preview.

Reference Checks

0.26

Moderate

Depends on the quality of references and questions asked.

Personality based Conscientiousness

0.22

Moderate

Relatively inexpensive, standardised and a valid personality measurement.

Graphology

0.20

Weak

The study of handwriting for evaluating job performance.

Years of Job Experience

0.16

Weak

Often the same amongst entry level applicants

Years of Education

0.10

Weak

Quickly outdated in a rapidly changing work environment.

Age

0.00

Very Weak

Not applicable to assess on.
\- 63 -

The best predictor of how an individual performs in the workplace is a work sample, or job try-out scenario. This is achieved by providing candidates with a simulation of the role, such as by combining realistic job previews with measures of ability in realistic problem-solving situations.

Equally significant predictive measures come from instruments measuring ability with a typical correlation of around 0.3 to 0.45. These are particularly effective for screening in roles that have high levels of performance variance. Specifically, the assessments differentiate employees who can perform better where higher levels of problem-solving are required for successful job performance.

In terms of comparing different types of assessment measures, it is important to reinforce that cognitive ability assessments have right and wrong answers and are often adaptive. Adaptive assessments work by asking a candidate a set of questions with mixed levels of difficulty. Depending on how the candidate responds to these initially questions will dictate the next question they see. If the candidate then gets this question right, the next question will be more challenging and vice versa, which enables shorter tests while retaining high validity. These measures typically have time limits. Personality measures don't have time limits, and instead focus on an individual's work style, preferences, interests, values, or motivators. This may include constructs such grit, emotional intelligence, self-awareness, and conscientiousness.

Increasingly, attracting and identifying the right talent quickly and in an engaging way, is becoming essential in a tight talent market for hard to find roles. Due to this, leading organisations are front-loading investments in attracting, screening, and assessing talent, leveraging predictive measures.

In recognising that the most time-intensive techniques are often the least valid, you can refocus your resources on structuring your interviews with consistent questions. This enables candidates to display examples of behaviour including humility and conscientiousness, with 
\- 64 -

strong behavioural examples. And with training being a less effective investment than selection, sometimes with 90% of training not resulting in a substantial improvement in performance13, it reinforces that hiring is the single most important people activity for any leader in any organisation.

Why do assessment centres receive mixed reviews?

Early Schmidt and Schmidt research had positioned assessment centres as the most predictive selection techniques. Their meta-analysis of the assessment validity of assessment centres, which reviewed 26 studies and 27 validity coefficients14, suggested that a validity estimate of 0.36+ for assessment centres is conservative, and often is affected by indirect range restriction. Indirect range restriction is when only a part of a group, such as only applicants to get through the first screening, are used for validation of the system but are not used in the decision-making process. This level of validity within assessment centres suggest that they can accurately assess candidates and predict future job performance.

What are assessment centres?

Assessment centres are designed to measure the key capabilities required for on-the-job performance in an interactive manner. They are renowned for exercises that are often realistic job previews simulating potential workplace scenarios. For example, candidates applying for a contact centre role will regularly participate in roleplays around handling a dissatisfied customer and be tested on their composure and ability to solve problems in a manner that ensures first call resolution.

An assessment centre uses multiple raters \- often line managers and leaders, recruiters, and HR personnel, to evaluate performance. At the end of the centre, the raters consolidate data before selection decisions are made. There are many advantages and disadvantages to assessment centres, which are explored below.

13 Bock, Work Rules

14 Lievens, "The Validity of Assessment Centres," 405-411
\- 65 -

Advantages

Engaging hiring managers

Providing hiring managers with the support and skills to be valid judges of talent has been shown to improve their ability to make predictive inferences for organisational performance.

Candidate engagement

Engaging experience reflects well on employer branding; minimising candidate drop out as potential hires have invested time and are prequalified and remain engaged through to offer.

Interactive exercises

Measure data that can be challenging to assess through traditional measures. For example, actual displays of interpersonal sensitivity are best validated with on-the-job performance in a relevant exercise.

Rich candidate data

Feedback can be provided to managers who are participating as observers of candidate performance, thus enhancing their ability to optimise candidate selection decisions.

Minimises gender and racial bias

Providing the integration session and pre-assessment centre training is administrated professionally, it ensures that all applicants are evaluated on the same qualities.

Disadvantages

Time lost and expensive

Particularly if candidate attendance is low and leaders are taking significant time off-site.

Very resource-intensive

Involving assessors and role players for exercises that are more challenging to prepare for and administer consistently. This is very challenging for role plays and presentation events, compared to an assessment which is more standardised, and shorter in duration.
\- 66 -

Integration of data

When not correctly facilitated, can often lead to 'halo and horns' stereotype sessions reinforced by managers and leaders.

An increasingly important reason for using assessments to gather candidate data earlier in the selection journey is to optimise candidate experience by enabling hiring managers to select candidates for interviews earlier and with greater confidence. Using a more objective approach to select candidates earlier in the application process reduces training time and predicts candidate performance more than solely relying on past experience, references, and job interviews.

Accurately predicting employee behaviour based on the information companies collect from applicants during the hiring process helps predict future job performance and company fit. This mutually benefits both the employer and the applicant, as the employer can find the best applicant for the position and the applicants can find the best organisations for them.

People are not your most valuable asset; the right people are15. Accurately and consistently predicting behaviour and performance on limited and often biased applicant data during the hiring journey, or even just a LinkedIn profile is a difficult task. However, extensive research over the decade is showing assessment data is predicting job performance and increasingly, organisational culture fit16.

Talent measurement assessments are designed increasingly to be used as early as possible in the candidate journey. This is to gather data to predict relevant on the job behaviours.

As there are tasks that differ in terms of their complexity, repetition, and their reliance on working with others, it is not possible to obtain a complete picture of a candidate's future potential and behaviour.

15 Collins, Good to Great.

16 Schmidt and Hunter, "The Validity and Utility of Selection Methods in Personnel Psychology," 264-274
\- 67 -

Key Points

Combinations of assessment techniques are most effective at predicting individual performance.

Talent assessments are cost and time effective, allowing recruiter to optimise the candidate applicant pool.

Accurately predicting employee behaviour based on the information companies collect from applicants during the hiring process helps predict company fit and future job performance.

Using an objective approach to select candidates earlier in the application process reduces training time and predicts candidate performance.

However, there is an opportunity to gather predictive data through assessments, structured interviews and video interviews, together with assessment centres for high volume roles. And of course, drug screens, background checks ad reference checks.

The best hiring procedures gather the right data at the right time.
\- 68 -

Bock, Laszlo. 2015. Work Rules! Insights from Inside Google that will Transform how you Live and Lead. London: John Murray.

Bohnet, Iris. 2016. How to Take the Bias out of Interviews. 18 04. Accessed 06 26, 2019. https://hbr.org/2016/04/how-to-take-the-bias-out-of-interviews

Collins, Jim. 2001. Good to Great: Why Some Companies Make the Leap... And Others Don't. New York: Harper Collins.

Equal Employment Opportunity Commission. 2017. "Uniform Guidelines on Employee Selection Procedures." Code of Federal Regulations. 1 7.

Fitz-enz, Jac. 2002. How to Measure Human Potential. New York: McGraw-Hill Education.

Lievens, Filip. 2007. "The Validity of Assessment Centres for the Prediction of Supervisory Performance Ratings." International Journal of Selection and Assessment 15 (4): 405-411.

Prickett, T, N Gada-Jain, and F. J Bernieri. 2000. The Importance of First Impressions in a Job Interview. Chicago, IL: Midwestern Psychological Association.

Schmidt, F.L., and J.E. Hunter. 1998. "The Validity and Utility of Selection Methods in Personnel Psychology: Practical and Theoretical Implications of 85 Years of Research Findings." Psychological Bulletin 124: 264-274.

Schmidt, F.L., D.S. Ones, and J.E. Hunter. 1992. "Personnel Selection." Annual Review of Psychology 43: 627-670.

Schmidt, Frank L., Michael A. Mcdaniel, Deborah Whetzel, and S.D. Maurer. 1994. "The Validity of Employment Interviews: A Comprehensive Review and Meta-Analysis." Journal of Applied Psychology 79 (4): 599-616.

Society for Industrial and Organizational Psychology. n.d. Employment Testing. Accessed 06 26, 2019. http://www.siop.org/Business-Resources/Employment-Testing/Testing-Overview

CHAPTER FOUR: REFERENCES
\- 69 -
\- 70 -
\- 71 -

5

Today's candidates are looking for a fundamentally different experience during the recruiting process compared to 10, or even 5, years ago. As candidate expectations shift, the recruitment process must follow suit in order to deliver a quality candidate experience and employ top talent. The way people interact with businesses online has changed, and candidates want the same level of personalisation they receive when purchasing something online. Great candidate experience is about having an engaging process where candidates feel valued and that recruiters are engaging with their application, not just processing their résumé. With 85% of candidates doubting that a human being has even seen their application1, and as a variable of candidate drop out is a lack of human interaction, it is essential to communicate and engage with your candidates throughout the process.

Candidate experience can be simplified as 'a job seeker's feelings about a company's brand through their recruitment process'. A positive candidate experience can create value for organisations, as by actively keeping the candidate at the forefront of your recruitment process, you decrease the likelihood of them having a poor experience. By reducing the chances of candidates sharing negative experiences online,2 you can avoid a decline in the number of future applications. Nearly 60% of candidates have had a poor candidate experience at some point. Most candidates aren't just keeping it to themselves either! 72% of those candidates have shared their bad experience online or with someone directly.3

1 Career Arc, The State of the Candidate Experience.

2 Robinson, "Rethink Your Candidate Experience"

3 Career Arc, The State of the Candidate Experience.

Optimise candidate experience to engage and retain the best

Candidate Experience
\- 72 -

A candidate's application process begins before applying for a position with your company. It starts with finding the job and viewing your employer branding, and it continues beyond getting, or not getting the position. Your employer branding is the organisation's reputation, built through people's experiences with a company as an employer, as well as the culture and values presented by the organisation. Candidate experience directly feeds into your employer brand and company reputation, which can increase the number of your applicants; yet only 45% of employers are putting HR resources towards protecting their employer brand4. All too often, when people apply for jobs and don't hear back, they leave the process with a very different opinion of your company than when they started it.

Figure 1. Business of Talent newsletter (2016) survey on employer focus

Enhancing the candidate experience is essential for employers. In fact, 73% of employers questioned by Josh Bersin5 stated that improving candidate experience was a priority, ranking it at number one, above both diversity and assessment investment.

A candidate's journey through a job application is something often looked at from the employer's side, but attention also needs to be given to the candidate's journey. By enhancing the candidate journey the employer benefits by finding the best fitting candidate for the job, and the candidate is more likely to think positively about the company –

4 David, "23 Surprising Stats"

5 Bersin, "Business of Talent"

\- 73 -

even if they do not get the job. You need to be able to differentiate your application process from every other company that's hiring, otherwise 'assessment fatigue' may kick in for candidates. In order to keep your organisation front of mind for those you want to hire, you need to make the time they spend on the application process as engaging as possible.

There's a large disconnect between what candidates experience and what the employer thinks candidates are experiencing. For example, the average candidate spends at least 3-4 hours completing an application that 70% of employers believe take less than 1 hour6. This disconnect comes from a misunderstanding of the application process. While it may only take 20 minutes for a candidate to apply for the role from a company's career site, there are hidden stages that only the candidate will experience which can be very time-consuming. These 'hidden' stages include company research and CV creation/adaptation. 60% of candidates spend at-least an hour researching and résumé prepping before they start the online application process7, and creating or adapting a CV for a specific position can take a couple of hours to complete.

While employers may think that a lengthy application process can help narrow down the candidate pool, it can narrow it in the wrong places. Yes, lower quality applicants may drop out but so may the best candidates. The best candidates have plenty of options and may prioritise less complicated applications, so you need to make sure that the time candidates are putting into your application is worth it.

6 Slater, "Employer Branding".

7 David, "23 Surprising Stats".

\- 74 -

For these reasons, forward-thinking recruiters have been seeking an objective system that attracts and engages large numbers of applicants and can accurately predict on-the-job performance.

Optimising the application process

Thanks to the internet, the time and effort required to post jobs and apply for them have been greatly reduced – but it has also resulted in recruiters being swamped with thousands of applicants. Traditional methods of job applications and candidate assessments are very employer focused, rather than candidate focused. As an employer you need to make sure that each applicant gets a unique and tailored experience.

Interacting with applicants and including assessments that keep them interested helps in avoiding the repetitive nature of applications. By making candidates fill out form after form, such as the one below, you can lose their interest; especially if the content they are submitting is repeated or included in their CV which they may also need to upload. Many applicants will drop out of the application process when they are required to enter excessive or repeated information.

Condensing the parts of your application that may repeat helps to keep applicants engaged throughout your process.

Around 60% of candidates will not finish an application because it is too long8. While there are sections of an application process that are essential for a candidate to answer, at least 41% of candidates ranked fast applications as one of the most important things to improve within a hiring process9. Lengthiness and engagement go hand-in-hand. Cutting down the length is one thing, but you must make sure the content is actively engaging, while still retaining the necessary questions and assessments. By engaging candidates from the get-go, you can capture their attention while simultaneously feeding your employer brand.

8 Slater, "Employer Branding".

9 Bissing, "2019 Recruiting Trends"
\- 75 -

The application, interview, and offer process will influence candidates' decisions on whether to accept the job or not, so invest time in reviewing and enhancing your application process.

Figure 2. The screens encountered in a typical online job application

The typical online application experience has too many screens

Figure 3. Traditional vs Updated High Volume Hiring Processes

\- 76 -

Employer Branding

It all starts with employer branding

As 70% of 18-34-year olds found their current or previous jobs through social media10, it is important that your employer brand can connect with potential candidates through this medium. 9 out of 10 potential candidates would apply for a job from a company with an active presence on social media. However, if your employer brand is badly represented or you have a poor social media content strategy, you face losing applicants.

Your employer brand is a vital aspect to invest in to make your company stand out and to attract the best talent. With 55% of job seekers not applying for a job at an organisation with a bad reputation or negative reviews11, you cannot afford to have a bad employer brand.

Test for cultural fit

Workplace environment, values and ethics make up your organisational culture. Assessing this fit first eliminates the candidates who simply won't align with the culture of your company. This is incredibly important because having candidates who are engaged with your culture and values will result in a more productive and satisfied workforce. As a result, this often leads to lower turnover.

Expressing your brand through the recruitment process

A candidate's opinion on the employer brand is developed throughout the application process. It is constructed through their interaction with the messages, logos and images seen prior and during recruitment, as well as any contact between the company and the candidate, and anything else well beyond the job offer.

Enhancing your employer brand can give you the edge on the competition and increase employee engagement significantly if utilised thoroughly and correctly. In fact, companies with excellent branding gain twice as many applicants compared to companies with inferior branding12.

10 Slater, "Employer Branding".

11 Career Arc, Future of Recruiting

12 Career Arc, The State of the Candidate Experience.
\- 77 -

Your brand is the perception by current and potential employees of what it's like to work for your firm. Branding is often the differentiating factor when a candidate is faced with two companies that they are interested in. It's all about creating transparency into your company culture, values, and benefits, and giving a realistic job preview of the role. A Realistic Job Preview (RJP) is used to communicate both the good and bad aspects of a job. Primarily, it is used to provide a prospective employee with a richer description of the company and the job (e.g., work environment, duties, expectations) to help them decide if they are a good match.

A branding video provides candidates with an opportunity to self-select for the role before progressing further with the application process . It is a chance to star current employees and give a taste of what it's like to work at your workplace, while exhibiting your unique employer brand. It allows you to showcase your values and create a realistic job preview of what the candidate can expect at your organisation. Employer branding and market positioning encourage greater candidate engagement, and minimise candidate drop-out rates.

Your candidates are looking for a company with a culture and values that align with their own specific needs, ideas and personalities. They want to know the benefits of working at your company; that there are professional development opportunities and that you are willing to invest in their careers, rather than focusing only on what they can bring to your company right now. You can show candidates all of these things with a branding video, helping them self-select for the best job-fit.

\- 78 -

Accurately predicting employee behaviour during the hiring process can be a difficult exercise. Nevertheless, extensive research has shown that gathering employment data consistently and objectively, such as with assessments, can predict person-job performance and organisational culture-fit.13 Talent measurement assessments can predict an individual's behaviour, as when completing these objective measures, applicants are likely to behave in a reliable and predictive manner.

Gamification

Gamified assessments are not necessarily about adding games into an application, but instead introducing gaming elements (such as points, levels or badges) within scientific psychometric tests. Leveraging game elements and narrative, gamified assessments create a more positive experience for candidates, along with the opportunity to experiment and learn. It is believed that a combination of interactivity, entertainment, and novelty could provide greater attraction and engagement, especially for new entrants to the workforce who grew up in the digital age.

Validation results from thousands of graduates indicate that gamified assessments provide a more positive and engaging candidate experience than traditional assessments. At the same time, the data shows that gamified assessments can deliver valid and reliable measures of cognitive ability and Learning Agility.

Interactive Gamified Measure of Learning Agility

The fact that candidates are learning during a gamified assessment, and the speed at which they do so, is observed in their response data.

13 Schmidt et al., "Personnel selection." 627-670

\- 79 -

From there, Learning Agility can be calculated by looking at the rate at which a candidate's scores improve. Learning Agility encompasses how quickly a candidate learns, their ability to teach themselves, and how skilled they are at picking up new information and concepts and apply these to solve problems.

Figure 4. Interactive gamified assessment assessing learning agility and ability from Talegent

\- 80 -

Game-based assessments that directly measure Learning Agility provide an engaging candidate experience that differentiates your company and assesses grads on the unique skills that today's roles require.

Measure key capabilities throughout candidate journey

Gamification is able to assess and measure different capabilities throughout an application. Specific personality items are embedded throughout the candidate journey in the most engaging way possible, to measure predictive constructs that can be gathered with a self-report measure. One of these is Grit, which is the dedication to a singular goal, coupled with the determination to see it through. Candidates with true grit can overcome obstacles to reach goals and be confident and composed in the face of challenges. Cognitive tests measure how quickly candidates can accurately distinguish between and interpret information.

Figure 5. Personality test within a Gamified Assessment

\- 81 -

Screen candidates efficiently and facilitate self-expression

Video interviewing involves utilising video technology to better record and review candidate responses. 60% of recruiters14 are using video interviewing as it offers candidates the opportunity to express themselves while measuring their communication skills and ability to think on their feet. Candidates can record their interview on a range of devices, not limiting them to a desktop.

A video interview eliminates the staff time and cost required for setting up conventional phone or in-person interviews, while still allowing you to include your own questions and time parameters. Most applicant tracking systems (ATS) can automatically send candidates a single link for their assessment pre-screening test and video interview.

14 Westfall, "Video Interviewing Software"

Figure 6. Talegent Video Interview shown on different devices

\- 82 -

Pre-record your own questions

With video interviewing, you are able to pre-record unique questions for the position, while giving candidates the ability to answer freely.

Accurately predicting employee behaviour based on the information companies collect from applicants during the hiring process helps predict future job performance and company culture fit. This is mutually beneficial to both the employer and the applicant, as the employer can find the best applicant for the position, and the applicant can find the best organisation for them.

Assessment centres can be used to measure job-related skills and abilities as well as interpersonal skills such as communication and teamwork. Usually an assessment centre will consist of exercises that are designed to simulate the work environment, and often include problems commonly faced on the job. As well as simulated job exercises, assessment centres often use other types of tests such as cognitive ability and personality tests to assess a candidate15. Using an objective approach to select candidates reduces training time and predicts candidate performance more accurately than simply relying on experience, references, and job interviews.

Assessment centres are used to assess a candidate's performance and behaviours and compare these against role requirements. The assessment centre uses multiple raters who observe, classify, and evaluate performance. At the end of the centre, these raters make overall judgements about each candidate's performance in the assessment centre, and whether or not they should progress to the next stage.16

15 Society for Industrial and Organizational Psychology, "Types of Employment Tests".

16 Psychometric Success, "Assessment Centres".
\- 83 -

Figure 7. Candidate Score from the Candidate feedback report

Why Net Promoter Score is important for Candidate Experience

One of the most effective ways to ensure you're providing a good experience to job seekers is to treat them like your customers. And it is tough since ATS' are traditionally systems of record and not systems of engagement, hence they can often miss the mark on candidate experience.

Most companies try to compensate by bringing in a creative firm, but they still fall short in delivering the functionality expected by today's candidates. A good way to measure candidate experience is with the net promoter score (NPS).

A net promoter score is used to assess customer satisfaction, and similarly can be used to assess candidate engagement and happiness. To calculate the NPS, candidates should be surveyed on their

Collaborative

Collaborative

Independent

Development Tips

Distribute the workload. As a naturally collaborative person, watch that you don't end up taking on the lion's share of the work. Everyone is accountable for their commitments they make to the team

Your responses suggest you enjoy working as a team, and are happy to help others achieve their objectives

Always project a shared team mentality, yet continue to treat people as individuals. Keep using 'we' and 'us', rather than 'me' and 'I'

\- 84 -

experience at the end of the application. The survey should ask them to anonymously rate how likely they are to recommend the company to a friend or colleague on a scale of 1-10. Break the results into these three sections:

Ratings from 0-6 are detractors

Ratings from 7-8 are passive

Ratings from 9-10 are promoters

To calculate your NPS, use this equation17:

NPS = % Promoters \- % Detractors

Figure 8. Process for measuring Employee Net Promoter Score

Candidate Feedback

Feedback is crucial to improving your application process; yet 35% of employers only ask for feedback after the candidate is hired, and 20% of employers never ask for feedback18. This means that many employers don't know why candidates are dropping out and what sort of negative experiences they may have during the application process. By asking for candidate feedback throughout the application process, you show that you are a company that respects their candidates and staff. It also decreases the chance of candidates sharing negative feedback verbally or on social media and allows you to make adjustments to future application processes based on the feedback you collect.

17 Reh, "How to Avoid Excessive Employee Turnover"

18 McLaren, "Improve the Candidate Experience"

\- 85 -

Feedback on the candidate experience is not just limited to candidates giving feedback during the application process but can also include feedback from the employer on the candidates' application. Candidates who are not informed of the progress of their application are 3.5 times less likely to apply for future positions with your organisation, yet 65% of candidates rarely receive any information surrounding their application.19 Companies need to move from a transactional approach (filling a role) to a relationship-first approach (building value with candidates whether they apply or not).

If you want to make talent your competitive advantage you need to learn from marketing departments and focus on building relationships, not collecting résumé.

It can be as simple as having an application process tracker that candidates can check while applying,20 or an automated message at each stage of their application. An automated email is useful as a confirmation of step completions (such as submitting the application form), however sending personalised updates during the application process can build stronger relationships with candidates. Let candidates know the expected timeline of their application and make sure you give them a guideline on when they will hear from you.21 Further feedback may include:

How the candidate performed at the previous stage.

Any preparation they may need to do before the next stage.

Asking if they have any feedback or questions

These consistent updates will keep the candidates engaged. This makes candidates feel valued before they have been offered a role, which means they will have had a more positive experience than if they were not being notified, regardless of their application outcome.

19 Career Arc, The State of the Candidate Experience.

20 Huppert, "Insights on How to Improve Your Candidate Expereince".

21 Lewis, "9 Ingredients to Recruiting Success".
\- 86 -

By providing feedback to the candidates, you can position your company as a future employer of choice and improve your business relationship with each candidate. With candidates who are given feedback on the day that they were interviewed being more likely to increase their relationship with the company compared to those who did not receive this22 , it is clear that feedback is an invaluable tool for recruiters.

A positive candidate experience can uniquely benefit a company, with 74% of candidates saying that having a positive experience can lead to referrals, brand loyalty and reapplication23 \- even if they do not get the job initially. If candidates have a bad experience, they are unlikely to want to work with your company in the future, and almost three-quarters of candidates who have a negative experience pass on negative feedback about the process to others.

It is important to take the time to review your application process from a candidate's perspective and to engage candidates with innovative technology that offers them a unique application experience. Encourage feedback from candidates who are hired and those who are not.

It is important to take the time to review your application process from a candidate's perspective and to engage candidates with innovative technology that offers them a unique application experience. Encourage feedback from candidates who are hired and those who are not.

22 McLaren, "Improve the Candidate Experience".

23 Min, "5 Important Stats On Candidate Experience".
\- 87 -

Key Points

Great candidate experience is about having an engaging process where candidates feel valued and that recruiters are engaging with their application.

Attract and engage candidates with your employer branding, built through people's experiences with a company as an employer, as well as the culture and values presented by the organisation.

The application, interview, and offer process will influence candidates' decisions on whether to accept the job or not, so invest time in reviewing and enhancing your application process.

Providing candidate feedback at all stages is essential for building and maintaining a positive relationship.

Predicting performance by measuring core capabilities that predict person-job and organisation culture fit.
\- 88 -

Bersin, Josh. 2016. "Business of Talent."

Bissing, Melissa. 2018. 2019 Recruiting Trends That Will Change How You Hire. 10 12. Accessed May 27, 2019. https://www.montagetalent.com/blog/2019-recruiting-trends-that-will-change-how-you-hire/

Career Arc. 2017. Future of Recruiting. Recruitment Study, Career Arc.

Career Arc. 2016. The State of the Candidate Experience. Recruitment Study, Career Arc.

David, Tallulah. 2017. 23 Surprising Stats on the Future of Recruiting – Infographic. 4 04. Accessed 05 27, 2019. https://www.careerarc.com/blog/2017/04/future-of-recruiting-study-infographic/

Huppert, Maxwell. 2018. Insights on how to Improve Your Candidate Experience. 17 1. Accessed 06 18, 2019. https://business.linkedin.com/talent-solutions/blog/trends-and-research/2018/5-insights-on-how-to-improve-your-candidate-experience

Lewis, Gregory. 2018. 9 Ingredients to Recruiting Success. 6 2. Accessed 06 18, 2019. https://business.linkedin.com/talent-solutions/blog/recruiting-tips/2018/stacy-zapars-secret-sauce-9-ingredients-to-recruiting-success

McLaren, Samantha. 2019. Improve the Candidate Experience. 4 06. Accessed 06 20, 2019. https://business.linkedin.com/talent-solutions/blog/candidate-experience/2019/one-tactic-to-improve-candidate-experience-and-hiring-process

Min, Ji-A. 2018. 5 Important Stats On Candidate Experience: New Candidate Research. 22 08. Accessed May 27, 2019. https://ideal.com/stats-candidate-experience/

Psychometric Success. n.d. Assessment Centres. Accessed May 20, 2019. https://www.psychometric-success.com/assessment-centers/acfaq-what-is

Reh, F. John. 2019. How to Avoid Excessive Employee Turnover. 10 01. Accessed 07 02, 2019. https://www.thebalancecareers.com/employee-turnover-2275788

Robinson, Amy. 2018. Statistics: Rethink Your Candidate Experience or Ruin Your Brand. 1 10. Accessed May 27, 2019. http://www.hci.org/blog/statistics-rethink-your-candidate-experience-or-ruin-your-brand

Schmidt, F.L., Ones, D.S., & Hunter, J.E. 1992. "Personnel selection." Annual Review of Psychology 43: 627-670.

Slater, Ben. 2017. Employer Branding. 07. Accessed May 27, 2019. https://beamery.com/blog/employer-branding

Society for Industrial and Organizational Psychology. n.d. Types of Employment Tests. Accessed May 20, 2019. http://www.siop.org/Business-Resources/Employment-Testing/Test-Types

CHAPTER FIVE: REFERENCES
\- 89 -

Westfall, Brian. 2015. Video Interviewing Software. 8 1. Accessed 06 18, 2019. https://www.softwareadvice.com/hr/industryview/video-interview-report-2015/
\- 90 -
\- 91 -

6

What is an assessment centre?

Assessment centres are commonly used selection tools that combine a mixture of assessment techniques and exercises to help recruiters test skills that are not easily assessable in other parts of the process. The tests conducted at the assessment centres are used to predict a candidate's suitability for a role, and their fit with the company culture.1

An assessment centre should have a variety of selection techniques that are based on a clearly defined set of dimensions, criteria, or competencies. These exercises can differ depending on the key selection criteria, but may involve group exercises, ability and personality tests, discussions, presentations, or an interview.2 For example, candidates applying for a contact centre role will often participate in roleplays around handling a dissatisfied customer and be tested on their composure and ability to solve problems in a manner that ensures first call resolution. Recruiters often use assessment centres for large amounts of applicants as it is one of the most effective methods for assessing and selecting from a larger pool.

The International Task Force on Assessment Centre Methods in the Guidelines and Ethical Considerations for Assessment Center Operations3 outline the following nine elements that must be present in an assessment centre4:

1 Assessment-Training, "What to expect at an Assessment Center?"

2 Mason, "Assessment Centres"

3 Rupp et al., "Guidelines and Ethical Considerations for Assessment Center Operations"

4 Collins and Hartog, "Assessment Centers: A Blended Adult Develop-ment Strategy," 231-250

Evaluate and integrate multiple data points when selecting employees

Assessment Centres
\- 92 -

Job Analysis

A job analysis identifies the important knowledge, skills, abilities, and other personal characteristics of the job for which participants are being assessed. They also provide information about roles, responsibilities, and critical incidents that drive the development of assessment exercises and simulations.

Behavioural Classification

Evaluations of participant behaviour must be classified into meaningful categories or dimensions that are critical to success. The classifications can be according to assessment exercises, behavioural aspects identified through the job analysis, or both.

Assessment Techniques

The job-relatedness of each exercise needs to be established to ensure content validity. This means clearly outlining the critical task areas and competencies that each activity represents.

Multiple Assessments

This is one of the trademarks of an assessment centre. Multiple assessments or exercises are used to evaluate each of the dimensions assessed. In this manner, there is an overlap in the evaluation so that behaviour can be observed across multiple activities.

Simulations

Assessment techniques should include at least one job simulation, such as roleplay, but can also include other tools such as interviews, tests and business cases.

Assessors

More than one assessor needs to observe and evaluate each participant to enhance the accuracy and the reliability of the ratings.

Assessor Training

Assessors must be appropriately trained on each of the dimensions to be assessed; guidelines on observing, recording, classifying and 
\- 93 -

evaluating behaviours; the exercises and dimensions targeted; and the avoidance of common rating errors.

Recording Behaviour and Scoring

Behavioural observations need to be recorded and scored systematically to ensure a rigorous, standardised, and reliable process.

Data Integration

Assessor observations of each exercise or activity need to be combined into competency or exercise ratings, and possibly an overall rating.

So why do assessment centres receive a mixed review?

Figure 1. Compiled by Talegent; adapted from Schmidt, Oh, & Shaffer, (2016). The validity and utility of selection methods in personnel psychology: practical and theoretical implications of 100 years of research findings; De Meuse, Hallenbeck, Dai, & Tang, (2009). Global talent management: Using learning agility to identify high potentials around the world.

Schmidt and Schmidt's meta-analysis of the validity of assessment centres, which reviewed 26 studies and 27 validity coefficients5, suggested as a result of the meta-analysis that a validity estimate of .36+ for assessment centres is conservative and is often affected by indirect range restriction. Indirect range restriction is where only part

5 Lievens, "The Validity of Assessment Centres," 405-411.

Selection Procedures

Validity

Relative Strength of Procedure

Description

Cognitive Ability Measures

0.65

Very Strong

Relatively inexpensive and generalisable.

Structured Job Interviews

0.58

Strong

Expensive to develop and time consuming.

Assessment Centres

0.36

Moderate

Resource, time and cost expensive. Challenging to standardise and scale.

Personality based EQ

0.32

Moderate

Relatively inexpensive, standardised and useful for development.

Learning Agility

0.30

Moderate

A key measure of high-performance potential.

Situational Judgement Tests (SJT)

0.26

Moderate

Needs to be customised. Excellent for engaging candidates and providing a realistic job preview.

Personality based Conscientiousness

0.22

Moderate

Relatively inexpensive, standardised and a valid personality measurement.

Years of Job Experience

0.16

Weak

Often the same amongst entry level applicants

Years of Education

0.10

Weak

Quickly outdated in a rapidly changing work environment.
\- 94 -

of a group, such as applicants who pass the initial screening, are used for validation of the system but are not used in the decision-making process. As such, the true validity estimate of assessment centres is likely to be higher; however even a .36 validity coefficient suggests that they can accurately assess candidates and predict future job performance.6

Advantages and disadvantages of assessment centres

There are many discussions surrounding the effectiveness of using assessment centres. Some of the advantages of assessment centres are the quality of data and bias minimisation; some of the disadvantages include the resource-intensive nature and the time needed for them.7

Advantages:

Hiring manager engagement:

Actively engaging hiring managers, provided they are valid judges of talent, has been shown to improve the predictive inferences for organisational performance.

Candidate engagement:

Positive candidate experiences reflect well on an employer's brand. Using assessment centres minimises candidate drop out, as potential hires have invested time and are prequalified and remain engaged through to offer.

Interactive exercises:

These provide data that can be challenging to assess through traditional measures. For example, actual displays of interpersonal sensitivity are best validated with simulated job performance in a relevant exercise.

Rich candidate data:

Feedback can be provided to managers who are participating as observers of candidate performance, thus enhancing their ability to optimise candidate selection decisions.

6 Schmidt et al., "The Validity and Utility of Selection Methods in Personnel Psychology"

7 Lievens, "The Validity of Assessment Centres," 405-411.
\- 95 -

Minimise gender and racial bias:

Provided the integration session and pre-assessment centre training is administrated professionally, assessment centres enable all applicants to be evaluated on the same qualities against the same benchmarks.

Disadvantages:

Time and cost intensive:

This is particularly true if candidate attendance is low and leaders are taking significant time off-site to observe or participate in the assessment centre.

Very resource heavy:

When involving assessors and role players for exercises that are more challenging to prepare for and administer consistently, the amount of resource needed is greater than that of an assessment, which is more standardised and shorter in duration.

Integration of Data:

When not correctly facilitated, data integration can often become 'halo and horns' stereotype sessions reinforced by managers and leaders.

An increasingly important reason for using assessment to gather candidate data earlier in the selection journey is to optimise candidate experience by enabling hiring managers to select candidates for interviews earlier, and with greater confidence. Using this approach early in the process reduces training time and predicts candidate performance more than simply relying on past experience, references, and job interviews.8 Traditionally, assessment centres are held in person and at set over a few days; however this can be an expensive and time-consuming undertaking. Some assessment centres can be conducted online with candidates proceeding through individual assessments.

8 Ballantyn and Povah, Assessment and Development Centres. 
\- 96 -

Competency models are the foundation of assessment centres

Competencies are the cluster of observable behaviours and actions which can include personality, ability, interests, and motivations etcetera. Competency definitions can draw on some or all of these psychological constructs, and often form a competency model which provides a guideline of necessary behaviours for an organisation.9

Part of best practice assessment centre design is ensuring that any assessed behaviours or competencies are both observable and measurable. When a competency is a discreet attribute, such as honesty or maturity, it can be challenging to assess in an assessment centre. The assessments should focus on how people perform set tasks, and the behaviours or competencies required to do so, and not the outcome of them.10

Why are competency models important in assessment centres?

A well-researched competency model is essential for assessment centre design. It provides a framework for effective job performance and helps create a base for the following:

9 Sanghi, The Handbook of Competency Mapping.

10 Leigh et al., "Competency Assessment Models," 463-473.

\- 97 -

Choosing assessment centre exercises:

This choice should be focused on those that will provide opportunities to observe relevant behaviours and have high face validity for the organisation's culture.

Assessor observations and evaluations:

There need to be clear guidelines around categorising and evaluating candidates' performances. Competency models will assist in reducing subjectivity by defining behaviours to be assessed.

Conducting reviews and validations:

This process will be facilitated more easily as the design and implementation of the centre will have been focused on relevant behaviours. Qualitative and quantitative reviews of how the exercises and assessors worked will also be more targeted.

Uses of assessment centres

Assessment centres can be used for multiple purposes, the most common of which is for hiring or promotion.11 Employers use assessment centres to gain an accurate profile of candidates' abilities, knowledge, personality, and motivations to select the person most suited to the position, or to identify areas for staff development. Studies show that 70% of large organisations and 40% of smaller ones are using assessment centres for graduate recruitment.12

The combination of various exercises and assessments are designed to give recruiters a balanced evaluation of each candidate.13 Most assessments have a standard rating scale for each candidate and exercise, and a team of assessors consolidates their findings at the end of the session.

11 Rupp et al., "Guidelines and Ethical Considerations for Assessment Center Operations"

12 University of Canterbury, Assessment Centres & Psychometric Tests.

13 Byham, The Assessment Centre Method, Applications, and Technologies. 
\- 98 -

Methods of assessment in assessment centres

There are various methods of assessing performance available which are diverse in terms of their style, structure, objectivity, and competencies measured.14 Some frequently used exercises and techniques are outlined below.

In-tray exercises are situational tests in which candidates are asked to deal with various items in the in-tray that they may encounter while on the job. Using a task like this brings a hypothetical question such as "how would you deal with this request or requirement?" into reality. The idea is that candidates will approach the paperwork in the in-tray as they would on the job itself. These tasks will vary depending on the job and its requirement, but they are intended to assess candidates' ability to organise and prioritise their work.15

Role play exercises involve the candidate and assessor adopting roles to act out in a simulation of a job-relevant scenario, such as a sales meeting or a customer call. These situations will change depending on which job is being recruited.

Presentations can sometimes consist of a talk on a subject of the candidate's choice, or it can be more structured by providing a theme or background data for a presentation on a set topic. This is designed to measure presentation skills, including a candidate's ability to organise and structure the information, as well as their ability to communicate their points clearly and concisely.

Psychometric tests can objectively measure an individual's capacity in a specific area under standardised conditions which allow the tester to make a direct comparison between individuals. This can involve a series of assessments and questionnaires that are used to measure a person's ability, personality, interest, and aptitude.

Aptitude and ability tests

Designed to measure cognitive abilities, these standardised tests are

14 Monster, "What is an assessment centre?"

15 Bray, "The Assessment Center and the Study of Lives." 180-189
\- 99 -

comprised of multiple-choice questions. Popular test areas are verbal ability, numerical ability, abstract reasoning, spatial reasoning, or mechanical reasoning.

Personality tests

These standardised questionnaires reveal aspects of a candidate's character, and their likely workplace tendencies. Personality tests are used to determine what a candidate's typical reaction or behaviour of a candidate to various situations, such as being part of a team, building relationships with others, handling pressure, or responding to change.

Analysis exercises involve participants analysing and interpreting information, then communicating their conclusions and recommendations to assessors.

Listening exercise

The material is presented orally or on a video, followed by an exercise to test the accuracy of a candidate's observation and their conclusions are drawn.

Written exercise

Often based on a dossier of documents. The candidate is asked to summarise, reach conclusions, and make recommendations based on the information presented to them.

Fact-finding exercises

A basic brief is provided, and an assessor is available to answer supplementary questions. The candidate is asked to report back on what they found and deliver their recommendations.

Group Exercises, such as case studies and discussions, are used by 75% of assessment centres16. These exercises are typically designed to measure interpersonal skills such as emotional intelligence, leadership, teamwork, negotiation, and group problem-solving skills.

16 Assessment Day, "Assessment Centre Guide". 
\- 100 -

A competency-based interview is one of the most widely used methods for selection. The challenge with unstructured interviews is that interviewers cease collecting data ten seconds after the interviewee takes a seat. Research demonstrates that these ten-second ratings of candidate potential correlate significantly with the final evaluation of the interview by the interviewer.17 If the interview is structured, with a consistent set of questions and clear criteria to assess the quality of responses, they are more effective.

Assessment Centre Matrix

An assessment centre matrix incorporates assessment results which allow assessors and recruiters to maintain an objective and consistent selection process. Talegent's assessment centre matrix (ACM) is a paperless and self-administered system designed to minimise human error and maintain reliable record keeping. It reduces the number of platforms required, automating and integrating various touchpoints. The Talegent ACM is designed to decrease the time and cost to hire while increasing the quality of hire. It does this by increasing the objectivity and scalability of the recruitment process.

Talegent's ACM provides multiple views to better monitor and assess candidate performance:

Recruiter summary view

The recruiter summary view allows recruiters to compare candidates across all assessments and exercises. This assists them in selecting which candidates should progress as they can easily see how candidates are ranked in each section.

17 Prickett et al., "The Importance of First Impressions in a Job Interview".

\- 101 -

Recruiter detailed view

This enables recruiters to look at individual results in detail, which can be helpful when deciding between two or more high performing candidates.

Assessor view

The assessors view on the ACM makes it easier for assessors to view all the information they need during the assessment centre in one paperless system. Assessors are able use specific assessor rating forms for each exercise. The ACM also provides the assessment centre timetable, including room allocations and scheduling.

The Talegent ACM can be configured to suit individual recruitment processes by providing automated assessment data to refer to during the assessment centre, such as psychometric scores or video interview results. Having individual candidate profiles with candidate data like transcripts and résumés available during the assessment centre assists recruiters in their decision making by making all the information they need at their fingertips.

\- 102 -

How assessment centres differ from development centres

The difference between a development centre and an assessment centre boils down to their purpose. Assessment centres are programmes seeking a "yes/no" answer for recruitment, whereas development centres focus on identifying skills for learning and development with current employees. Often an assessment centre is undertaken towards the end of a recruitment process, while a development centre is used at the start of a training process to assess and develop skillsets.18 A fundamental difference for participants is that they will actively be involved in assessing themselves in a development centre. They are given detailed feedback on their results and what they mean for their future development and will be expected to 'own' the requirements as part of their continuous professional development.19

18 Ballantyn and Povah, Assessment and Development Centres.

19 Psychometric Success, "What is a Development Centre?"

\- 103 -

A development centre is held over one or more days to identify key strengths and weaknesses in order to diagnose areas that require training. In a development centre, participants are actively involved in the assessment of their behaviours as part of their professional development. There are two main types of development centres: identification centres and diagnostic centres. Identification-based development centres aim to assess people with high potential to enable rapid advancement. Diagnostic-based development centres aim to improve current performance and employee motivation.20

Case Study

As assessment centres can be very time-intensive, it is crucial to be able to make them as effective as possible. One way to do this is with an assessment centre matrix. These can help make assessment centres more efficient by collating all relevant information in one place.

Talegent created an assessment centre matrix for a large Australian financial organisation, to use within their graduate & intern recruitment. The key goal for the tool was a paperless assessment centre, to streamline process, remove friction and promote brand to hundreds of candidates involved annually. Enhancements were also targeted to minimise the time requirements from the business, and ensure objective decision-making was as easy as possible.

The fully configured ACM solution was specific to the activities, competencies, and scoring rubric of the existing AC process. This allowed rapid implementation and delivery of the solution and created a platform to facilitate continuous improvement.

Having individual candidate profiles with candidate data such as transcripts and résumés available during the assessment centre assisted recruiters in their decision making by having all the information they need at their fingertips. By increasing the objectivity and scalability of the recruitment process, the Talegent ACM is designed to decrease the time and cost to hire while improving the quality of hire. When using

20 Ballantyn and Povah, Assessment and Development Centres. 
\- 104 -

Key Points

Assessment centres are designed to measure the key capabilities required for on-the-job performance in an interactive manner.

An assessment centre should have a variety of selection techniques that are based on a clearly defined set of dimensions, criteria or competencies.

As part of an assessment centre it is important that any assessed behaviour or competency is observable and measurable.

An assessment centre matrix incorporates assessment results which allows for assessors and recruiters to maintain an objective and consistent selection process.

Assessment centres are programmes seeking a "yes/no" answer for recruitment and development centres focus on learning and development.

the Talegent ACM, alongside a review of the assessment methods, the financial organisation was able to massively reduce their elapsed time of assessment centres from five weeks to five days.

The flexibility of the tool allows adaptation and change with needs of the business. Specifically, ensuring the right competencies are measured in the right way at the right time. This enables businesses to audit their recruitment journey, focus on competencies which predict success and shorten the process where there is "over-measurement". Enterprise expansion of the tool can also reduce the number of platforms the recruitment team utilises, as well as automation of user touchpoints.
\- 105 -

Assessment Day. 2016. Assessment Centre Guide. Accessed 07 26, 2019. https://www.assessmentday.co.uk/assessmentcentre/index.html

Assessment-Training. 2016. What to expect at an Assessment Center? Accessed 7 26, 2019. https://www.assessment-training.com/blogs/what-to-expect-at-an-assessment-center

Ballantyn, Iain, and Nigel Povah. 2016. Assessment and Development Centres. Taylor & Francis Group.

Bray, Douglas W. 1982. "The Assessment Center and the Study of Lives." American Psychologist, 37(2) 180-189.

Byham, William C. 2002. The Assessment Centre Method, Applications, and Technologies. Pittsburgh, PA: Development Dimensions International.

Collins, Lynn G., and Sandra B. Hartog. 2011. "Assessment Centers: A Blended Adult Development Strategy." In The Oxford handbook of lifelong learning, by Manuel London (Ed.), 231-250. New York, NY: Oxford University Press.

Leigh, I.W., I.L. Smith, M.J. Bebeau, J.W. Lichtenberg, P.D. Nelson, S. Portnoy, N.J. Rubin, and N.J. Kaslow. 2007. "Competency Assessment Models." Professional Psychology: Research and Practice, 38 463-473.

Lievens, Filip. 2007. "The Validity of Assessment Centres for the Prediction of Supervisory Performance Ratings." International Journal of Selection and Assessment 15 (4): 405-411.

Mason, Dan. 2019. Assessment Centres. 06. Accessed 07 30, 2019. https://www.prospects.ac.uk/careers-advice/interview-tips/assessment-centres

Monster. 2018. What is an Assessment Centre? Accessed 07 26, 2019. https://www.monster.co.uk/career-advice/article/what-is-an-assessment-centre

Prickett, T, N Gada-Jain, and F. J Bernieri. 2000. The Importance of First Impressions in a Job Interview. Chicago, IL: Midwestern Psychological Association.

Psychometric Success. 2017. What is a Development Centre? Accessed 8 1, 2019. https://psychometrictests.com/assessment-centers/acfaq-development-centre

Rupp, D., B. Hoffman, D. Bischof, W. Byham, L. Collins, A. Gibbons, S. Hirose, et al. 2015. "Guidelines and Ethical Considerations for Assessment Center Operations: International Taskforce on Assessment Center Guidelines." Journal of Management 41(4).

Sanghi, Seema. 2007. The Handbook of Competency Mapping: Understanding, Designing and Implementing Competency Models in Organizations. California: Sage Publications Inc.

Schmidt, F. L., I. S. Oh, and J. A. and Shaffer. 2016. "The Validity and Utility of Selection Methods in Personal Psychology: Practical and Theoretical Implications of 100 years of Research Findings."

CHAPTER SIX: REFERENCES
\- 106 -

University of Canterbury. n.d. "Assessment centres & Psychometric tests." University of Canterbury. Accessed 07 30, 2019. https://www.canterbury.ac.nz/media/documents/careers-internships-and-employment/brochures/Assessment-centres-&-psychometric-tests.pdf
\- 107 -
\- 108 -
\- 109 -

7

Personality and intelligence (cognitive reasoning) have a long history of use in selecting and developing the best talent. Over the last 30 years, research in the field of human resource assessments, including the rise of digital tools, has evolved personality and ability assessments into predictable and accurate recruitment solutions.1 There is consistent evidence about their growing power in predicting job performance,2 and an increasing number of top companies are using professional personality and cognitive assessments as a tool for selection decisions.

The relationship between personality, cognitive ability, and job performance has been a frequently studied topic in psychology.3 Franziska Leutner and Tomas Chamorro-Premuzic conducted a review of studies dating back more than 30 years, finding evidence that personality and ability assessments are effective in predicting individual on-the-job performance, yet are underutilised in companies globally.4 Perhaps of more concern is the existence of a large discrepancy between research findings and HR practitioners beliefs as to the validity of objective selection techniques. Specifically, research from over 5,000 HR professionals revealed that practitioners have far less faith in personality and ability assessments as predictors of job performance than the research should indicate.5

A growing number of leading companies are using personality and cognitive assessments as a model for the identification, selection, and

1 Clarke, "Personality Assessment and Big Data"

2 Forsey, "Personality Indicates Job Performance"

3 Barrick et al., "Personality and Performance at the Beginning of the New Millennium" 9-30

4 Leutner and Chamorro-Premuzic, "Stronger Together"

5 Rynes et al., "HR Professionals' Beliefs about Effective Human Resource Practices" 149-174

Personality & ability as predictors of job performance

Personality & Ability Assessment
\- 110 -

development of top talent. For example, Google employs the most valid assessment techniques to select their staff, ignoring résumés and grades, and instead combining personality and cognitive measures to gain an insight into a candidate's problem-solving ability, conscientiousness, and leadership potential.6

In an age where it is habitual for organisations across all industries to embrace a data-driven approach to decision making regarding prospective and current employees, the use of scientifically defensible personality and intelligence tools is far from widespread.7 The opportunity is there, as there are approximately 40 million assessments sold per year, not all of which are reliable or valid, yet an estimated 4 billion people in the global workforce. That is only a 1% market penetration rate, so many people go through their careers without very having their potential, performance, or development areas measured through a valid and predictive assessment.

Today, using an assessment model integrating the most job-relevant and predictive components of personality and ability beats any interview three times.8 Big data and talent analytics are decidedly the future of HR, as they are incredibly powerful predictive and descriptive tools for selection decisions. By assessing personality and cognitive ability, recruiters are able to embrace talent analytics to find and hire the best candidates. It is crucial, however, to make note of the difference between data derived from good and bad assessments – as only wrong decisions can be made from a poorly structured assessment that collects the wrong data.9

More than ever, job performance is becoming a multi-dimensional construct that indicates how well employees perform their tasks, take initiative, and solve problems creatively.10 Furthermore, it indicates the extent to which they complete tasks, utilise available resources,

6 Bock, Work Rules.

7 Leutner and Chamorro-Premuzic, "Stronger Together"

8 Clarke, "Personality Assessment and Big Data"

9 Schmitt, "Personality and Cognitive Ability" 45-65

10 Rothmann and Coetzer, "The Big Five Personality Dimensions and Job Performance" 68-74
\- 111 -

and spend their time and energy. So, how do we fully understand the predictive power of cognitive reasoning and personality in predicting job performance?

The predictive power of cognitive reasoning

General mental ability (GMA), or cognitive reasoning, is the speed at which a person can process information, and it comes as no surprise that it has been found to be one of the most powerful and reliable predictors of job performance.11 People with higher GMA find it easier to develop relevant job knowledge, solve problems, build logical arguments, make effective decisions, and adapt to complex or novel situations.12 When combined with other selection methods, such as work sample tests or interviews, cognitive tests add significantly to the predictive information available to the decision-maker.13

Measuring cognitive ability is not only helpful for predicting performance potential, it also helps to determine person-job fit. The better the person-job fit, the higher the job satisfaction and the lower the chance of turnover. When making selection decisions, a primary goal should be to find a candidate who best matches the job requirements.14

History of cognitive tests

From as early as the 7th century, the Chinese were testing civil servants using written tests of their verbal reasoning and creative ability. One thousand years later in the 1700's, assessments of navigation skill were being used to measure the ability of applicants for the British navy.15 Measuring ability and potential was a better predictor of performance at sea than status.

Fast forward to 1905 where Alfred Binet and Theodore Simon developed the first widely used ability test, the Binet-Simon

11 Forsey, "Personality Indicates Job Performance"

12 Schmidt and Hunter, "General Mental Ability in the World of Work" 162-173

13 Schmidt et al., "The Validity and Utility of Selection Methods in Personnel Psychology"

14 Schmidt and Hunter, "General Mental Ability in the World of Work" 162-173

15 Vernon, "Statistical Methods in the Selection of Navy and Army Personnel," 139-153
\- 112 -

Intelligence Scale. They produced an assessment of 30 items that measured attention, memory, and verbal reasoning ability to identify school children that needed remedial studies. A later revision which is known as the Stanford-Binet Intelligence Scale is still in use today, and remains one of the most widely used intelligence tests.16

Figure 1. The Seven Intelligences table17

Based on these intelligence scales, Guilford developed a more structured approach incorporating multiple intelligences. His three-dimensional model included five types of components, five types of operations, and six types of product, linking to 150 independent abilities which predicted an intelligence score.18 From this complex

16 Cherry, "Alfred Binet and the History of IQ Testing"

17 Gardner and Hatch, "Multiple Intelligences Go to School" 4-10

18 Guilford, "The Stucture of Intellect," 267-293

Intelligence

End-States

Core Components

Logical-mathematical

Scientist

Mathematician

Sensitivity to, and capacity to discern, logical or numerical patterns; ability to handle long chains of reasoning.

Linguistic

Poet

Journalist

Sensitivity to the sounds, rhythms, and meanings of words; sensitivity to the different functions of language.

Musical

Composer

Violinist

Abilities to produce and appreciate rhythm, pitch, and timbre; appreciation of the forms of musical expressiveness.

Spatial

Navigator

Sculptor

Capacities to perceive the visual-spatial world accurately and to perform transformations on one's initial perceptions.

Bodily-kinesthetic

Dancer

Athlete

Abilities to control one's body movements and to handle objects skillfully.

Interpersonal

Therapist

Salesman

Capacities to discern and respond appropriately to the moods, temperaments, motivations, and desires of other people.

Intrapersonal

Person with detailed, accurate self-knowledge

Access to one's own feelings and the ability to discriminate among them and draw upon them to guide behaviour; knowledge of one's own strengths, weaknesses, desires, and intelligences.
\- 113 -

model came a simpler approach by Howard Gardner and Thomas Hatch, who identified seven relatively independent forms of information processing. Their model incorporated logical, linguistic, musical, spatial, bodily, intrapersonal, and interpersonal factors which are perhaps a precursor to emotional intelligence. The focus needs to be on detecting distinctive human strengths and using these as a way for an employer to understand person-job fit and identify areas of development and improvement for employees.

Cognitive testing today

There is consistent proof that ability tests are some of the best methods for predicting simple job performance. Metanalyses published over the years have provided a review of general cognitive ability, as well as specific aspects of cognitive ability, as predictors of training success and performance.19 Simple measures of general cognitive ability account for about 20-25% of the variance in job performance, and as job become more complex, cognitive ability tests will become an even more important predictor of potential and performance.20

Figure 2. Compiled by Talegent; adapted from Schmidt, Oh, & Shaffer, (2016). The validity and utility of selection methods in personnel psychology: practical and theoretical implications of 100 years of research findings; De Meuse, Hallenbeck, Dai, & Tang, (2009). Global talent management: Using learning agility to identify high potentials around the world.

19 Ones et al., "In Support of Personality Assessment in Organizational Settings." 995-1027

20 Schmitt, "Personality and Cognitive Ability" 45-65

Selection Procedures

Validity

Relative Strength of Procedure

Description

Cognitive Ability Measures

0.65

Very Strong

Relatively inexpensive and generalisable.

Structured Job Interviews

0.58

Strong

Expensive to develop and time consuming.

Personality based EQ

0.32

Moderate

Relatively inexpensive, standardised and useful for development.

Learning Agility

0.30

Moderate

A key measure of high-performance potential.

Personality based Conscientiousness

0.22

Moderate

Relatively inexpensive, standardised and a valid personality measurement.

Years of Job Experience

0.16

Weak

Often the same amongst entry level applicants
\- 114 -

\- 115 -

The ability to work with data and make data-based decisions will become an increasingly vital skill across many jobs as employers build a workforce with solid skills in data analysis and presentation. This is resulting in shifts in expected skill requirements. From a skills perspective, employers will need to understand the impact this may have on their employees' current skillsets and work practices, and what can be done to develop them.21

Figure 3. Expected emphasis on workforce skills as AI/robotics are integrated in the enterprise.

A recent Global Trends report by Deloitte, which surveyed more than 11,000 HR professionals, found that as technology becomes more central to our work, organisations are increasing their focus on essential skills such as complex problem solving (63%), cognitive ability (55%), and social skills (52%) when hiring. Overall, a wide range of occupations will require a higher degree of cognitive ability as part of their core skill set. In fact, more than half of all jobs that are expected to increase the need for cognitive abilities and complex problem-solving skills as part of their core skill set. Only 6% of jobs requiring high cognitive ability today are expected to see this decline in future. And it is very likely that that ability tests have a key role to play in

21 World Economic Forum, The Future of Jobs.

\- 116 -

sourcing and selecting talent for these cognitively complex roles.22 It is, therefore, crucial to assess these high demand skills and abilities in future talent.

The usage of ability tests in work relevant contexts has come a long way. Today, Talegent's portfolio of aptitude tests includes not only six different cognitive ability measures in a traditional framework, but also the change to measure learning agility through gamification.

Talegent tests available

Numerical reasoning

The ability to understand, apply, and make decisions based on numerical information. This score should indicate how easily candidates will understand data presented in tables and graphs.

22 Deloitte, 2018 Global Capital Trends.

\- 117 -

Verbal reasoning

The ability to understand verbal and written information, apply it, and draw accurate conclusions. This score should indicate how easily candidates will understand relatively complex material, such as research information, reports, and correspondence.

Logical reasoning

The ability to pick up on trends and patterns within data and apply these to solve problems. This score should indicate how easily candidates will learn new information and integrate this with their existing knowledge, particularly in regards to strategic or intangible concepts.

\- 118 -

Mechanical reasoning

The ability to understand the effects of physical forces on elements within a mechanical system. This score should indicate how well candidates will be able to comprehend relationships between mechanical elements and forces in practical situations.

Spatial reasoning

The ability to understand the effects of physical forces on elements within a mechanical system. This score should indicate how well candidates will be able to comprehend relationships between mechanical elements and forces in practical situations.

Fault finding

The ability to understand complex systems and diagnose faults. This score should indicate how easily candidates can locate precisely where a system has broken down.

\- 119 -

Competencies and cognitive reasoning

Specific competencies incorporate personality together with cognitive reasoning results to provide an integrated understanding of an individual's anticipated behaviour in a certain realm. By combining personality scales generated through self-report data with ability results, we get an understanding of an individual's expected work style or preferences, along with their mental ability. For example, the Talegent's 'Communication' competency combines verbal reasoning results with their behavioural responses around social awareness, influencing, and self-confidence. In this way, we not only see how skilled a candidate is at interpreting and applying verbal or written information (verbal reasoning), but also how well they can leverage that ability to adjust their style (social awareness), persuade others (influencing), and come across as confident (self-confident), to be an

\- 120 -

effective communicator. All this is presented in an interactive report which demonstrates a candidate's performance against a relevant comparison group.

Intelligence measures are consistently proven to be valid predictors of career-related outcomes. Extensive meta-analytic studies of the various predictors of job performance report validities of r = 0.65 for cognitive ability.23 The maximum incremental validity from interviews is only 20%.24 Thus, having a selection technique in your back pocket that is consistent, scalable, and objective as well as being more effective than a traditional interview is a no brainer. Not only has this research been reinforced for the last 50 years, it has also been recently validated by Lazlo Bock, former SVP of People Operations at Google, in his book Work Rules.25 Cognitive ability tests are an easy-to-administer, cost-effective method of assessing candidates that have been found to be very consistent and valid in their measurements.26

Adaptive testing

Adaptive testing is a new form of testing in which the assessment adapts itself to the ability level of the test taker in order to increase precision and reduce assessment length. The principal difference between traditional and adaptive testing is how questions are administered. A traditional test asks candidates every question from a set list and uses this to determine their ability. Adaptive assessments present different items to different candidates, based upon the estimated ability level of the candidate. Therefore, the test cannot use the number of correct items to calculate a candidate's percentile score, as candidates have been asked different questions. In contrast, non-adaptive assessments present the same items to each candidate completing the assessment. Thus, they use the number of correct answers in the calculation of the candidate's percentile score.

23 Schmidt et al., "The Validity and Utility of Selection Methods in Personnel Psychology"

24 Leutner and Chamorro-Premuzic, "Stronger Together"

25 Bock, Work Rules.

26 Butcher, Oxford Handbook of Personality Assessment. 
\- 121 -

Advantages of adaptive testing

Tests are faster:

Perhaps the most significant advantage of adaptive testing is that it makes candidate testing faster than ever before. Because adaptive testing is targeted to the ability level of each specific candidate, it avoids asking questions which are too hard or too easy for that candidate, and consequently contains fewer questions.

Tests are more accurate:

Adaptive testing is often more precise than traditional testing methods, and is especially good at identifying candidates who lie at the extreme ends of ability. Because of this, it outstrips traditional testing at detecting the subtle differences between top scorers and differentiating their performance. Conversely, traditional testing is good at accurately categorising candidates in the mid-range, but increasingly loses precision as results get more extreme.

It's harder to cheat:

Psychometric testing has become increasingly sophisticated to the point where it's hard to cheat – but not impossible. Someone could conceivably get a hold of the questions and work out how to answer. But the beauty of adaptive testing is that no two candidates are given the same test, so they can't give one another a heads up as to which questions to expect.

\- 122 -

How does adaptive testing measure ability?

As each candidate is presented with different items, they cannot be scored based on the number of correct or incorrect items. The assessment is set up so that each item has an associated difficulty. This difficulty is calculated through an analysis of thousands of real candidate responses. As a candidate progresses through the assessment, every question allows the system to estimate their underlying ability, using item difficulty. This is why it is valid to compare candidate results when they have answered different questions, because it is the underlying ability of the candidate which is being compared, not the number of items they got right or wrong.

How to make the most of adaptive testing

Answering more items correctly does not necessarily mean that a higher score will be obtained, because the system is looking at the difficulty of each item, rather than the number of items. To gain a more in-depth understanding of a candidate's ability, we encourage the use of the full version of Talegent's adaptive assessments. However, where timing is a critical factor, the express versions will still offer a solid understanding of the candidate's cognitive ability in a shorter assessment.

Adaptive testing offers numerous advantages over traditional testing initiatives including test length, test precision, and cheating difficulty. As we move into the future, adaptive testing is more and more likely to be adopted by recruiters due to these factors, and the improved candidate experience it offers.

The predictive power of personality testing

Personality is a key aspect of employability. When recruiters assess a candidate's ability to perform a job, they not only look at their cognitive ability, but also their motivations, conscientiousness, and how they interact with others.27 Like cognitive assessments, personality questionnaires are a consistent predictor of subjective career success,

27 Heggestad and Morrison, "An Inductive Exploration of the Social Effectiveness Construct Space" 839-874
\- 123 -

influencing how people evaluate their own careers. Equally, leaders with problematic personality characteristics create high levels of turnover and underperformance in their teams and organisations.

History of personality testing

Personality is a highly complex topic that has fascinated researchers and theorists for the past few centuries. Personality testing, as we know it today, has its roots in nineteenth-century Europe, and was pioneered by Sir Francis Galton, who conducted several experiments on mental processes and the measurement of psychological attributes.28 One of the first standardised objective tests was the 1943 Minnesota Multiphasic Personality Inventory (MMPI), which was not only standardised but also provided validity scales designed to detect impression management.29

Carl Jung published a typology of personality including the concepts of introversion and extraversion in the 1920s,30 which were built on by Katharine Cook Briggs and Isabel Briggs Myers who developed the Myers-Briggs Type Indicator (MBTI) in order to help people

28 Butcher, Oxford Handbook of Personality Assessment.

29 Framingham, Minnesota Multiphasic Personality Inventory (MMPI.

30 Jung, Psychological Types.

Factor

Associated Trait

Extraversion

Sociable, gregarious, assertive, talkative, active

Conscientiousness

Dependable, thorough, careful, responsible, organised, hardworking

Openness to Experience

Imaginative, cultured, curious, original, broad-minded, intelligent, artistically sensitive

Agreeableness

Courteous, flexible, trusting, good-natured, cooperative, forgiving, soft-hearted, tolerant

Neuroticism

Anxious, depressed, angry, embarrassed, emotional, worried, insecure
\- 124 -

find jobs that matched their personalities.31 Several researchers have independently assessed and identified five similar personality dimensions: Extraversion, Conscientiousness, Openness to Experience, Agreeableness, and Neuroticism (or Emotional Stability). These are now commonly known as the Big Five, while the model itself is referred to as the Five Factor Model. The Big Five been used extensively in personality assessment.32

Personality testing today

Personality assessments have changed in other ways since their initial conception. One main development is in their validity, which has increased significantly over the years.33 In many countries, psychological associations have developed strict standards and guidelines for the design and use of psychological tests. Norming procedures have improved, scoring has been standardised, and measures – such as impression management scales – have been introduced to minimise distortion.34 As such, an extensive range of tests have been developed for different purposes, including selection and development, and with different underlying models of personality.

While the Big Five remain a core tenet in personality research, there is also compelling evidence for the validity of other constructs to predict career-related outcomes. For example, other components of personality that have been linked to career success include self-evaluations, proactivity, entrepreneurial personality, and integrity.35 An advantage of personality measures is that they do not have an adverse impact on increasing workforce diversity.36 Personality is not just an essential predictor of career-related outcomes, it also enables higher levels of career success and job performance by increasing self-awareness and

31 Briggs Myers, The Myers-Briggs Type Indicator.

32 Rothmann and Coetzer, "The Big Five Personality Dimensions and Job Performance" 68-74

33 Butcher, Oxford Handbook of Personality Assessment.

34 Schmitt, "Personality and Cognitive Ability" 45-65

35 Rothmann and Coetzer, "The Big Five Personality Dimensions and Job Performance" 68-74

36 Hunt et al., Diversity Matters.
\- 125 -

guiding developmental interventions, particularly in leaders.37

The Talegent PATH® Personality Questionnaire has two different scales assessing response style.

Talegent tests

Talegent has developed the PATH Personality Questionnaire which gives employers deep insight into the behaviours and tendencies of individuals – the way they think, how they relate to others, their preferred work style, and more. These measures can be analysed in relation to the key role competencies exhibited by top performers for a given role.

37 Barrick et al., "Personality and Performance at the Beginning of the New Millennium" 9-30

The degree to which an individual is receptive to feedback. Low scorers on this scale may tend to resist feedback, and are more likely to be defensive when faced with criticism. Low scorers are therefore more likely to distort their responses in a defensive or favourable manner than high scorers.

The degree to which an individual is aware of their own strengths and limitations. Low scorers on this scale are more likely to have a limited understanding of their weaknesses, or may seek to conceal them in order to positively manage their impression on others. Therefore, their responses may be unintentionally distorted and may not accurately reflect the respondent's true nature.

Receptive

Self-Aware

\- 126 -

Interpersonal

Candidates high in the scales on this cluster are confident in their powers of persuasion, and are able to confidently take lead and motivate a team. They connect easily with others, are comfortable discussing feelings, and trust quickly. These candidates can adapt their behaviour to suit different situations and enjoy working with a wide range of people.

Temperament

This cluster identifies candidates who strongly believe in their capability to succeed, and rarely display signs of stress. They can easily adapt to change, enjoy variety, and maintain a positive outlook despite challenge.

Thinking

Candidates with high scorers here should evaluate information critically, use past experience and data to solve problems, and be driven to develop their skills and knowledge. They seek new and creative solutions and enjoy applying abstract concepts to solve problems. These candidates are able to focus on the big picture for long-term impact.

\- 127 -

Execution

This cluster shows a candidate's tendency towards following rules and guidelines, and taking a methodical and detail approach in their work. High scorers make fulfilling promises a priority, but are not afraid to take risks. They remain focused and engaged despite distractions.

Drive

Candidates who are high in this cluster thrive in a fast-paced environment and a full workload. They are competitive and highly motivated to succeed, and are comfortable making quick, confident decisions.

Self presentation

These two scales identify candidates who are aware of their strengths and limitations, and are welcome feedback from others in order to improve. 
\- 128 -

Personality and cognitive testing: stronger together

Personality and reasoning ability can account for different domains of on-the-job performance, providing incremental validity. Specifically, this combination predicts performance for individual contributors through to leadership roles. While personality and cognitive ability are not the only factors linked to job performance, and their combined performance power is hard to match.

However, correlations between cognitive ability measures and personality measures are typically low. Meta-analytic correlations between four of the Big Five constructs and cognitive ability have been reported to be less than .10.38 So the bottom line is, given the lack of relative correlation between cognitive and personality, there is real hope that combinations of the two do indeed produce a superior predictor of job performance. This is further enhanced by the fact that there are low intercorrelations of the Big 5 measures; thus the magnitude of combining relevant personality constructs with cognitive measures are incrementally and consistently predictive of performance as this data can be gathered in a standardised way.39 Similarly, Schmidt et al. have shown that combining other selection tools such as cognitive ability tests or work samples with personality measures adds to the accuracy of the selection process.40

Applications of personality and ability assessments

Talegent's PATH suite, which contains a personality questionnaire and a range of cognitive ability assessments, generates several reports that can be applied both pre-hire and post-hire.

The epicentre of these reports is the Cognitive & Competency report, which provides detailed insights into a candidate's strengths and weaknesses in relation to a competency set of your choosing. Not only

38 Barrick et al., "Personality and Performance at the Beginning of the New Millennium" 9-30

39 Ones et al., "In Support of Personality Assessment in Organizational Settings." 995-1027

40 Schmidt et al., "The Validity and Utility of Selection Methods in Per-sonnel Psychology"
\- 129 -

does the report contain comprehensive interpretation text that changes based on how a candidate has profiled, it also includes interview questions, development tips, and an onboarding guide for each specific candidate.

Personality profile charts and cognitive reports can be derived from the same data, along with Talegent's EQ, Leadership Potential, Grit, and Team Types report. Using a combination of reports that are fit for purpose based on a single data source can provide a well-rounded picture of an individual's ability, style and potential in the workplace.

\- 130 -

Profile

Figure 4. Interactive Personality Profile

Interactive personality profile

\- 131 -

Based on an analysis of a candidates preferred tendencies gathered from their self-report data, and the standardised PATH personality profile is sorted by cluster.

Each personality scale is reported on with a narrative description outlining the strengths and development areas based on a candidate's item responses.

\- 132 -

Figure 5. Competency & Cognitive Report

Competency and Cognitive

An overall recommendation is calculated based on a derived weighting of each competency. Typically competencies are equally weighted to contribute equal variance to the overall score. These weightings can be adjusted through the results of validation studies. Some competencies contain cognitive scores, such as Evaluation which includes logical reasoning, together with self-report items from the personality questionnaire. Other competencies like Directing Action, Flexibility, Self Insight and Resilience are based entirely on personality questionnaire responses. 
\- 133 -

Each competency is described with narrative text that outlines the subtle nuances of the candidate's personality tendencies within that competency. Comments on ability are also made where the competency includes a cognitive component.

Behavioural interview questions with specific probes are available to explore and confirm candidate scores on each competency.

\- 134 -

Hiring Manager Report:

Similar to the Cognitive & Competency report, the Hiring Manager report provides detailed information as to how a candidate profiled at the competency level. However, this information is presented in a more summarised format, without percentiles, enabling hiring managers who are not trained in psychometrics to get the most out of the data.

Figure 6. Hiring Manager Report

\- 135 -

Standard Terminology

Other Terminology

(Well) Above Average

Key Strength

Above Expectations

Average

Capable

Competent

Similar to most

Typical

Meets expectations

(Well) Below Average

Potential to develop

Development area

Below expectations

Developing

\- 136 -

Figure 7. Candidate Feedback Report

Candidate Feedback Report:

More than ever, candidates who apply for jobs at your company may also be clients. For this reason, providing them with feedback not only aids selection and increases the candidate experience, it also benefits your brand. The candidate feedback report is designed to give a candidate a snapshot of how they performed in the assessment in an engaging and digestible format. It contains interpretation text as well as development tips to help candidates improve in certain areas.
\- 137 -

Figure 8. Delivering Feedback Report

Delivering Feedback Report:

An alternative to the candidate feedback report, the delivering feedback report is designed to be used by HR practitioners or hiring managers to provide verbal feedback to candidates. The report guides you through the feedback process, using prompts and candidate-friendly text that can be read verbatim.

\- 138 -

Figure 9. Emotional Intelligence Report

Emotional Intelligence:

The Emotional Intelligence (EQ) report can be derived from an individual's responses to the PATH personality questionnaire. The report shows how a candidate has profiled against the four facets of emotional intelligence: self-management, relationship management, social awareness, and self-awareness. It contains interpretation text, development tips, and employer recommendations for each competency.
\- 139 -

Figure 10. Grit Report

Grit:

The Grit report can be derived from an individual's responses to the PATH personality questionnaire. The report shows how a candidate has profiled against the four facets of grit: self-belief, self-control, problem analysis, and persistence. It contains interpretation text, development tips, and employer recommendations for each competency.

\- 140 -

Figure 11. Leadership Report

Leadership:

The Leadership Potential report can be derived from an individual's responses to the PATH personality questionnaire, and their results on the logical reasoning assessment. The report shows how a candidate has profiled against the six facets of grit: inner drive, novel problem solving, social intelligence, growth mindset, self-management, and desire to lead. It contains interpretation text, development tips, and employer recommendations for each competency.

\- 141 -

Figure 12. Team Types Report

Team Types:

The Team Types report can be derived from an individual's responses to the PATH personality questionnaire. The report shows how likely a candidate is to adopt each role within a team, and to what extent. It contains behavioural text for each of the eight team types, shown below, along with employer recommendations.

\- 142 -

In addition to the interactive reports, the data from PATH assessments can be displayed in an interactive stack rank table, as seen below. This provides recruiters with an easy way to view the scores of multiple candidates across dimensions. The user is can order the table by any score below by clicking the column name.

Figure 13. Stacked rank table

Summary

Over 50 years of literature, containing thousands of studies on cognitive ability and personality, has provided human resource professionals with findings that can be applied in sourcing, selecting and developing talent. Measures of cognitive ability consistently predict job performance in most, if not all, jobs and situations.

Modern personality constructs are sub facets of the Big Five, and their associated personality items are valuable measures of incremental job performance. Combining personality and cognitive measures into a tight competency model provides a useable framework for HR practitioners and hiring managers to apply in selecting the best talent.

Administration of candidate assessment measures in adaptive scenarios, rather than a static model, enables the measurement of applied cognitive reasoning. The quality of the candidate experience 
\- 143 -

needs to be considered carefully when designing the selection journey. This very much affects how candidates perceive the relevance of the measures being administered to gather predictive data, and may well affect their validity as well. With an increasing focus on the candidate experience, the utility of cognitive ability as a predictor of job performance is moderated by the tools with which it is measured and interpreted.

Faking and cheating on cognitive and personality constructs does occur. However, this can be minimised by using adaptive testing, and considering where and how data is collected throughout the candidate journey. Clear communication to the candidate on the importance of accurate and honest responses is critical. Relationships between predictor variables, such as interviews or cognitive measures, and the outcome variable of job performance, need to be continually explored. Continued caution regarding the existence of faking on noncognitive measures is warranted.

Overall, personality measures predict job performance if the constructs are chosen and applied based on a job analysis that has identified the key competencies critical for success. HR professionals, hiring managers, and researchers need to be fully aware of the changes in skills required so that they can design their selection system a create a more integrated candidate experience and collect predictive data throughout the candidate journey. This research on selection helps us to understand the utility of accurately measuring ability and personality constructs to predict individual job performance.
\- 144 -

Key Points

By assessing personality and cognitive ability, recruiters can find and hire the best candidates.

Cognitive ability measures are some of the most powerful and reliable predictors of job performance.

Adaptive testing in which the assessment adapts itself to the ability level of the test taker increases precision and reduces assessment length.

Personality enables higher levels of career success and job performance by increasing self-awareness and guiding developmental interventions.

Combining assessments of personality constructs and cognitive measures are incrementally and consistently predictive of performance.
\- 145 -

Barrick, Murray, Michael Mount, and Timothy Judge. 2001. "Personality and Performance at the Beginning of the New Millennium: What do we know and where do we go next?" Personality and Performance, 9 9-30.

Bock, Laszlo. 2015. Work Rules! Insights from inside Google that will transform how you live and lead. London: John Murray.

Briggs Myers, Isabel. 1962. The Myers-Briggs Type Indicator. Manual, Palo Alto, CA, US: Consulting Psychologists Press.

Butcher, J. N. 2012. Oxford Handbook of Personality Assessment.

Cherry, Kendra. 2019. Alfred Binet and the History of IQ Testing. 07 02. Accessed 08 11, 2019. https://www.verywellmind.com/history-of-intelligence-testing-2795581

Clarke, Rebecca. 2017. Personality aAsessment and Big Data have Evolved into the Leading HR Tool. 12 1. Accessed 08 11, 2019. https://www.hrreview.co.uk/hr-news/personality-assessment-big-data-evolved-leading-hr-tool/109278

Deloitte. 2018. "2018 Global Capital Trends." Accessed 06 10, 2019. https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2018/ai-robotics-intelligent-machines.html..html

Forsey, Caroline. 2019. Personality Indicates Job Performance. 3 13. Accessed 08 7, 2019. https://blog.hubspot.com/marketing/personality-indicates-job-performance

Framingham, Jane. 2018. "Minnesota Multiphasic Personality Inventory (MMPI)." Psych Central.

Gardner, Howard, and Thomas Hatch. 1989. "Multiple Intelligences Go to School: Educational Implications of the Theory of Multiple Intelligences." Educational Researcher, 18(8) 4-10 .

Guilford, J. P. 1956. "The Structure of Intellect." Psychological Bulletin, 53(4) 267-293.

Heggestad, E.D., and M.J. Morrison. 2008. "An Inductive Exploration of the Social Effectiveness Construct Space." J. Personal, 76 839–874.

Hunt, Vivian, Dennis Layton, and Sara Prince. 2014. Diversity Matters. Research Report, McKinsey & Company.

Jung, C. G. 1921/1971. Psychological Types: Collected Works 6 . Princeton [R.F.C.Hull translation].

Leutner, Franziska, and Tomas Chamorro-Premuzic. 2018. "Stronger Together: Personality, Intelligence and the Assessment of Career Potential." Journal of Intelligence, 6.

Ones, Deniz S., Stephan Dilchert, Chockalingam Viswesvaran, and Timothy A. Judge. 2007. "In Support of Personality Assessment in Organizational Settings." Personnel Psychology 995-1027.

CHAPTER SEVEN: REFERENCES
\- 146 -

Rothmann, S., and E. P. Coetzer. 2003. "The Big Five Personality Dimensions and Job Performance." South African Journal of Industrial Psychology, 29(1) 68-74.

Rynes, Sara L., Amy E. Colbert, and Kenneth G. Brown. 2002. "HR Professionals' Beliefs about Effective Human Resource Practices: Correspondence Between Research and Practice." Human Resource Management, 41(2) 149-174.

Schmidt, F. L., I. S. Oh, and J. A. and Shaffer. 2016. "The Validity and Utility of Selection Methods in Personal Psychology: Practical and Theoretical Implications of 100 years of Research Findings."

Schmidt, Frank, and John Hunter. 2004. "General Mental Ability in the World of Work: Occupational Attainment and Job Performance." Journal of Personality and Social Psychology, 86(1) 162-173.

Schmitt, Neal. 2014. "Personality and Cognitive Ability as Predictors of Effective Performance at Work." Annual Review of Organizational Psychology and Organizational Behavior, 1 45-65.

Vernon, P. E. 1946. "Statistical Methods in the Selection of Navy and Army Personnel ." Supplement to the Journal of the Royal Statistical Society, 8(2) 139-153.

World Economic Forum. 2016. The Future of Jobs. World Economic Forum.
\- 147 -
\- 148 -
\- 149 -

8

Keeping up with the millennials

While Generation X has dominated the workforce for decades, millennials are set to make up 75% of the working population by 20251. Millennials have vastly different expectations to their elders, and many businesses struggle to find a balance between these varying expectations. A fat pay check is no longer enough, as there are many factors that millennials deem as more important.

When asked, HR professionals ranked early career development programs at the bottom of their priority list. However, as new graduates are set to become the world leaders and experts of tomorrow, more attention needs to be given to them. Recruiters need to look beyond academic achievement when hiring graduates and focus on finding those who fit well with the business. By recruiting graduates with a range of skills and attributes, recruiters inject a diversity of ideas, experience, and capabilities into the company.

Employers should be hiring graduates with a plan to develop them into the future leaders of their company, rather than simply to fill junior positions. In doing so, recruiters will be shaping their graduates for the future. This requires selecting the right attributes to measure from the beginning – not just attributes that suit a junior position, but ones that align with leadership requirements.

Millennials own the future of work, and it starts today.

1 Donston-Miller, "Workforce 2020"

Engaging and identifying the best graduates

Graduate Recruitment
\- 150 -

Why millennials are a different breed of employee

Today's grads are not like the workers of previous generations. Being the first generation to grow up with the internet, they're more connected, media-savvy, socially committed, and demanding of employers2. While a ton of attention has been devoted to how they need to be managed differently, not a lot of people have looked at how they need to be hired differently.

Millennials want instant feedback in order to streamline their career advancement. They dislike managers who assign tasks and expect results without interaction. When a manager invests in developing their strengths, millennials feel valued and are more willing to stick around. All good graduate programs should have mentors who are willing to develop their protégées into future leaders.

More than anything, millennials look for a place where they can fit in. They want to self-select for this need by aligning your company values with their own. Finding graduates with compatible personalities will create a strong and friendly atmosphere. This is not to say everyone must be exactly the same, but common points of interest and complementary team types are a good place to start. Although veterans of the workforce have found success through being forced to perform in high-pressure situations, this toxic environment is no longer condoned by the new age of employees. Millennials are more likely to actively disengage, become less productive, and even quit. By maintaining a positive culture, you'll also get a much larger pool of applicants applying. Top graduate candidates look for happy current graduates, so a positive culture is an engagement tool in and of itself.

How many times have you heard a graduate wanting to find purpose? Millennials are impatient to make a difference – they want to come in and immediately start making an impact on the business. They develop tunnel vision and only see the so-called difference at the end of it, not always appreciating the hard work in the journey to get there. So empower them early and involve them in the process to make them feel

2 Donston-Miller, "Workforce 2020"
\- 151 -

like they can hit the ground running. Graduate application processes should adjust for this need to feel engaged by using an interactive application and supplying feedback throughout the process.

Creating a level playing field: Selecting from student grades is not predicting job performance

With roles changing so fast in today's work environment it is worth bearing in mind that any work experience is not only less predictive of job performance than other measures, but also less likely for graduates to have. There is a real need, and opportunity, to objectively identify and leverage big data to predict immediate performance and future potential in hiring graduates, particularly as age and qualification are not strongly linked to performance on the job.

What then should you be using to identify the best grads? Figure 1 shows that applying an objective data-centric approach incorporating cognitive ability, personality measures and a well-structured interview is the best way to identify your top applicants.

Figure 1. Compiled by Talegent; adapted from Schmidt, Oh, & Shaffer, (2016). The validity and utility of selection methods in personnel psychology: practical and theoretical implications of 100 years of research findings; De Meuse, Hallenbeck, Dai, & Tang, (2009). Global talent management: Using learning agility to identify high potentials around the world.

Selection Procedures

Validity

Relative Strength of Procedure

Description

Cognitive Ability Measures

0.65

Very Strong

Relatively inexpensive and generalisable.

Structured Job Interviews

0.58

Strong

Expensive to develop and time consuming.

Assessment Centres

0.36

Moderate

Resource, time and cost expensive. Challenging to standardise and scale.

Personality based EQ

0.32

Moderate

Relatively inexpensive, standardised and useful for development.

Learning Agility

0.30

Moderate

A key measure of high-performance potential.

Situational Judgement Tests (SJT)

0.26

Moderate

Needs to be customised. Excellent for engaging candidates and providing a realistic job preview.

Reference Checks

0.26

Moderate

Depends on the quality of references and questions asked.

Personality based Conscientiousness

0.22

Moderate

Relatively inexpensive, standardised and a valid personality measurement.

Years of Job Experience

0.16

Weak

Often the same amongst entry level applicants
\- 152 -

The graduate recruiter's mission

As demand grows for new and differentiated skills, especially in rapidly changing fields, it will become more complex and problematic for employers to hire graduates based on specific skills and technical expertise alone.

The graduate recruiter's challenge is fourfold:

Attract and engage

Using a positive brand message to tap into the best candidates

Minimise drop out

Keeping candidates engaged throughout the selection journey

Predicting performance

Measuring core capabilities that predict person-job and  organisation culture fit.

Provide candidate feedback

Positioning their company as an employer of choice

Thanks to the internet, the time and effort required to post jobs and apply for them have reduced dramatically – but it has also resulted in recruiters being swamped with thousands of applicants. Recruiters typically rely on industry experience as a key filter to quickly narrow the field, but with recent graduates, that screening criteria can no longer be used. As a result, many recruiters use candidate grades as a predictor of performance. However, research has found that grades have a relatively weak relationship with work performance, and in some cases can be discriminatory against certain cultural groups. Numerous other factors also compound this hiring challenge:

Varying standards between degrees from different educational institutions

Graduates are often hired to fill unspecified roles within the organisation

Time pressure to hire quickly due to competition for the best graduate candidates

The prodigious volume of applicants 
\- 153 -

There is real competition when recruiting graduates. Employers need to be able to differentiate their application process and assessments from every other company that's hiring, otherwise 'assessment fatigue' may kick in. In order to keep your organisation front of mind for those you want to hire, you need to make the time they spend on the application process as engaging as possible. Employers need to find a way to interact with their applicants, treating graduates as individuals and including recruitment tests that keep them interested – and avoiding the weariness of repetitive applications and assessments.

For all these reasons, forward-thinking recruiters have been seeking an objective methodology for accurately predicting on-the-job performance that can not only attract, but also process, large numbers of applicants quickly. This millennial-optimised recruitment process scales to match bigger candidate pools, saving both time and effort. The balance of power has shifted. Today, millennials expect MORE.

Figure 2. Selection tools used by graduate recruiters surveyed by the Australian Association of Graduate Employers in 2019.

Selection methods used in grad recruitment

Structured interviews

90%

Group/panel interview

71%

Aptitude testing

69%

Group exercises (AC)

68%

Video interviewing

63%

Reference checks

60%

Personality questionnaires

38%

Gamified assessments

21%

\- 154 -

Talegent's Graduate Recruitment:

The assessment solution for hiring millennials

It all starts with employer branding

The first step to attracting the best and brightest millennials to your company is to tell a story about your employer brand. As mentioned in chapter 5, it's all about creating transparency into your company culture, values, and benefits, and giving a realistic job preview of the role. Graduates make up part of the largest demographic on social media, with 64% of all Instagram users being aged 18 to 343. By representing your brand on social media, you can connect with the graduates you want to recruit. While 99% of employers believe managing your employer brand is important to attracting top talent, only 45% of Employers devote HR resources to protecting employer brand4.

3 Statista Research Department, "Distribution of Global Audiences"

4 David, "23 Surprising Stats".

\- 155 -

"Typical internet user spends 88% longer on a website with video than without"5

A branding video allows candidates to self-select the best fit for them. It is a chance to star current employees and showcase a taste of what it's like to work at your workplace, as well as to provide a realistic job preview. These three employer brand qualities will resonate with many millennials and are easily demonstrated in your branding video:

Professional Development Opportunities

Millennials are super focused on their careers. The only difference is they want to do it twice as fast as previous generations. They want a customised and streamlined approach to their career development. Show them you are willing to invest in their careers, rather than focusing only on what they can bring to your company.

Company Values

Millennials want to know that employers value them as unique individuals of a larger organisation. They're looking for company values that align with their own specific needs, ideas and personalities. Being authentic allows them to self-select for their best fit.

Company Culture

We spend more time with our colleagues than our family and friends on a weekly basis. It's no surprise that millennials are looking for a home away from home at the office. They are looking for a happy and comfortable place where they can socialise and be productive. Show them a glimpse of a day around the office in your video.

5 Lister, "Video Marketing Statistics"

For example of Talegent's branding video, scan the QR code shown:

 .jpg)
\- 156 -

Assessment is no game... or can it be?

Gamified assessments have taken the HR community by storm. Validation results from thousands of graduates indicate that this new form of assessment provides a more positive and engaging candidate experience than traditional assessments. The human appetite for interactive tests of skill and knowledge, and instant feedback via a reward system of points or digital prizes, is fuelled by a generation who grew up in the internet age. At the same time, data shows that gamified assessments can deliver valid and reliable measures of cognitive ability and Learning Agility.

Figure 3. Interactive gamified assessment assessing learning agility and ability from Talegent

\- 157 -

Gamified assessments measuring learning agility

Leveraging game elements and narrative in gamified assessments creates a more positive experience for graduate candidates, along with the opportunity to experiment and learn.

Figure 4. Candidate Feedback graph for Engagement and Usability

Game-based assessments that directly measure Learning Agility provide a super engaging candidate experience that differentiates your company and assesses grads on the unique skills that today's roles require.

The only available assessment that directly measures Learning Agility – the ability to learn from experiences and apply that learning to novel situations and problems

Candidate feedback on engagement and usability of gamification assessments
\- 158 -

Recipe for the perfect millennial candidate

Only a couple of years ago, the skills people were talking about were: complex problem solving, coordinating with others, and people management. By 2020, only complex problem-solving remains at the top, with critical thinking and creativity shooting up the rankings.

Based on our research we have categorised the important skills to look for into these three categories:

Learning Agility

Learning Agility measures a candidate's speed at adapting, and their ability to teach themselves. Employees with exceptional learning agility will be good problem solvers and are motivated to learn new skills, as well as enjoying self-directed learning. Professionals are embracing self-directed learning to stay up-to-date with today's dynamic job requirements, and the pace of change required is only increasing. Investing in graduates with high Learning Agility will help reduce training costs and skill obsolescence further down the line.

Cognitive Complexity

Cognitive Complexity measures a candidate's ability to distinguish between what information is relevant and what to ignore. This promotes an emphasis on data quality over data quantity. Graduates who have exceptional Cognitive Complexity are proficient at evaluating strengths and limitations. Investing in graduates who are critical thinkers will help navigate the complex business obstacles of the future.

2x

more likely to have exceptional Learning Agility when scoring high on Problem Solving

5x

more likely to have exceptional Cognitive Complexity when scoring high on Critical Thinking

\- 159 -

Grit

Grit is not about being the smartest person in the room, but rather the willingness to hang in there when the going gets tough, the dedication to a singular goal, coupled with the determination to see it through. Graduates with true Grit can overcome obstacles to reach goals and be confident and composed in the face of challenges. Graduates who score highly on Grit are real long-term assets to any organisation, because it only gets stronger as they mature.

4x

more likely to have exceptional Grit when scoring high on Resilience

Figure 5. Personality test within the Talegent Gamify Assessment

It's important to measure key candidate capabilities

The Talegent Graduate Competencies are based on the proven performance predictors6 for graduates in professional roles. These can be used in a variety of ways, including:

Screening, assessing and verifying candidate performance

Identification of top graduates within your organisation

Personal assessment of strengths and weaknesses

6 Talegent Case Study, Professional Services
\- 160 -

22%

42%

LOW

LOW

LOW

LOW

HIGH

HIGH

HIGH

HIGH

Candidates who score highly are:

Learning Agility

Achievement

Resilience

Learning Ability

more likely to have exceptional learning agility

more likely to have exceptional learning ability

more likely to have exceptional performance focus

more likely to have high stress tolerance

The ability to pick up on trends and patterns within data and to apply these patterns to solve a problem.

Being motivated by work, tasks and the opportunity to compete with others.

The tendency to stay calm, composed and

optimistic in stressful or high pressure situations. Also referred to as grit.

The ability to pick up on trends and patterns within data and to apply these patterns to solve a problem.

2x

5.3x

4.8x

3.9x

% showing exceptional learning agility

4%

19%

% showing exceptional performance focus

% showing high stress tolerance

% showing exceptional learning ability

25%

97%

6%

32%

\- 161 -

LOW

LOW

LOW

HIGH

HIGH

HIGH

Emotional Intelligence

Implementation

Teamwork

more likely to have exceptional emotional intelligence

more likely to have exceptional teamwork ability

more likely to have exceptional organisation

The tendency to perceive and manage emotions in self and others. Relating well to others with strong interpersonal skills.

The tendency to be reliable and meticulous. Following through on plans to ensure they are carried out accordingly.

The tendency to support and collaborate with team members to achieve targets. Working well with a variety of people.

1.9x

3.3x

46%

% showing exceptional EQ

% showing exceptional organisation

% showing exceptional organisation

Figure 6. Talegent Graduate Competency Validation Graphs & Metrics

43%

81%

11%

16%

9%

28%

\- 162 -

Screen candidates efficiently and facilitate their self-expression

Video interviewing involves utilising video technology to better record and review candidate responses. 60% of recruiters7 are using video interviewing, as it offers graduates the opportunity to express themselves while measuring their communication skills and ability to think on their feet. A video interview eliminates the staff-time and cost required for setting up conventional phone or in-person interviews while still allowing you to include your own questions and time parameters.

The video interview data sits alongside assessment results. The process reduces time and cost per hire, and is capable of working with poor bandwidth by recording audio rather than video, or just taking photos (Figure 7).

7 Westfall, "Video Interviewing Software".

Figure 7. Talegent Video Interview shown on different devices

\- 163 -

Assessment centres are designed to be an interactive measure of the key capabilities required for on-the-job performance. They are used to assess a candidate's performance and behaviours and compare these against role requirements8. The assessment centre uses multiple raters who observe, classify, and evaluate performance. At the end of the centre, these raters make overall judgements about each candidate's performance in the assessment centre9.

A new development in assessment centres in recent years is the move to paperless reporting. An online reporting matrix allows for an objective and consistent selection process, without requiring multiple printouts. This increases the accuracy and efficiency of sorting applications, while also providing an at-a-glance view of all candidates' results side by side across all criteria. An assessment centre allows you to consolidate all data, including pre-populated assessment data, interview guides, scoring sheets, assessor notes and schedules.

8 Society for Industrial and Organizational Psychology, "Types of Em-ployment Tests".

9 Psychometric Success, "Assessment Centres"

Figure 8. Screenshots of a custom built Assessment Centre platform

\- 164 -

CASE STUDY: PROFESSIONAL SERVICES

Talegent worked with large professional service firms who needed to recruit the very best graduates for services in consulting, technology, financial advisory and related services; and who work with three-quarters of the Fortune Global 500. They assessed over 20,000 graduates for their graduate programmes and needed a meaningful initial screen of the candidates, while also having an opportunity to provide differentiated experiences that would support their unique employer brands.

For these professional service firms, the following techniques were applied:

Figure 9. Techniques flowchart used by the professional service firms

After the cohort of graduates had been hired, Talegent undertook predictive validation analyses in partnership with the professional services firms. These predictive studies gathered data from upwards of 200 graduates who were successfully recruited and correlated their test scores on seven key attributes with manager ratings of job performance.

Results

As expected, the results showed that measures of learning agility correlated strongly with manager ratings of the speed at which a candidate picks up specific client requirements in new projects. Likewise, verbal reasoning scores correlated significantly with a candidate's ability to interpret and use the information presented in this form.

\- 165 -

The study also found that Numerically Minded and Communication were two key personality and cognitive competencies shared by all successful candidates. These can be additionally assessed in face-to-face interviews or video interviewing.

The Assessment Solution for Hiring Millennials

Millennials' desire to find "the right fit" means that your application process needs to reflect your organisation. By providing a unique, highly engaging assessment experience, you can meet and exceed millennial candidate expectations from the start. The ability to integrate your brand into the application process brings your organisation to life and helps your applicants to self-select for a better fit.

Graduates are the future leaders of the workforce and need to be developed as such. By recruiting graduates with a range of skills and attributes that align with those required for a leader, employers can ensure that the future of their company is in the right hands.

Graduates scoring high on Critical Reasoning were

2.5x

more likely to have exceptional critical thinking ability

Graduates who passed were

2x

as likely to have effective overall experience

Graduates who passed were

2.1x

as likely to have exceptional ability to adopt new technology

Graduates who passed were

4x

as likely to have exceptional Learning Agility & Problem Solving

Graduates scoring high on Critical Reasoning were

46%

more likely to have highly effective overall performance

Graduates scoring high on Critical Reasoning were

30%

more likely to have high potential to advance
\- 166 -

New job roles require graduates to quickly adapt and learn new technologies, communicate with authority, and more. Talegent's game-based assessment, Gamify, in conjunction with Video Interviewing, provides an immersive, high-touch, creatively challenging, and highly engaging experience. By automating and integrating candidate assessments, from initial screening through to assessment centres, you can identify and decide on potential top performers faster than ever, before they lose patience and take another offer.

In using a graduate application process that shortens the time taken through the hiring process while increasing the quality of data collected, employers can make more measured and objective decisions on which candidates to hire, while ensuring a positive candidate experience.

Key Points

Employers should be hiring graduates with a plan to develop them into the future leaders of their company, rather than simply to fill junior positions.

Today's grads are the first generation to grow up with the internet, they're more connected, media savvy, socially committed, and demanding of employers.

The ability to integrate your brand into the application process brings your organisation to life and helps your applicants to self-select for a better fit.

Key skills to look for are: Learning Agility, Cognitive Complexity, Grit.

By automating and integrating candidate assessments, from initial screening through to assessment centres, you can identify potential top performers faster than ever.
\- 167 -

Psychometric Success. 2019. Assessment Centres. 20 May. https://www.psychometric-success.com/assessment-centers/acfaq-what-is

Australian Association of Graduate Employers Ltd. 2019. "The AAGE Employer Survey 2019." Camberwell.

David, Tallulah. 2019. 23 Surprising Stats on the Future of Recruiting – Infographic. 27 May. https://www.careerarc.com/blog/2017/04/future-of-recruiting-study-infographic/

Donston-Miller, Debra. 2019. Workforce 2020: What You Need to Know. 18 06. https://www.forbes.com/sites/workday/2016/05/05/workforce-2020-what-you-need-to-know-now/#23d382c62d63

Lister, Mary. 2019. 37 Staggering Video Marketing Statistics for 2018. 10 08. https://www.wordstream.com/blog/ws/2017/03/08/video-marketing-statistics

Schmidt, F. L., I. S. Oh, and J. A. and Shaffer. 2016. "The Validity and Utility of Selection Methods in Personnel Psychology: Practical and Theoretical Implications of 100 Years of Research Findings."

Statista Research Department. 2019. Instagram: Distribution of Global Audiences 2019. 18 06. https://www.statista.com/statistics/248769/age-distribution-of-worldwide-instagram-users/

Society for Indstrial and Organizational Psychology. 2019. Types of Employment Tests. 20 May. http://www.siop.org/Business-Resources/Employment-Testing/Test-Types

Westfall, Brian. 2019. Video Interviewing Software. 18 06. https://www.softwareadvice.com/hr/industryview/video-interview-report-2015/

CHAPTER EIGHT: REFERENCES
\- 168 -
\- 169 -

9

Although a relatively recent concept, Emotional Intelligence, commonly known as EQ (Emotional Quotient) has become a hugely popular topic in academic and business circles. In fact, a Google search on "emotional intelligence" returns over 1.9 million results! The concept refers to emotional management skills which increase an individual's competence at balancing emotions and reason, to maximise long term effectiveness and happiness.

In a very real sense, we have two minds, one that thinks and one that feels. Specifically, your EQ enables you to monitor your own and others' emotions, distinguish between different emotions, and categorise them appropriately to guide you in your landscape of human interactions1.

So how does IQ (Intelligence Quotient) differ from EQ? The most important thing to understand is that emotional intelligence is not the opposite of intelligence. It is not the triumph of heart overhead, but an intersection of both2. It is the ability to understand your own emotions, and accurately take a read on those around you, to positively manage your relationships with others. The concept posits that individuals differ in the degree to which they can perceive, appraise, and respond to emotional information, both within themselves and between others. The big buzz about EQ began in the mid-1990s with a book by psychologist Daniel Goleman3. Since then, existing talent assessment tools have been applied and mapped to measure EQ.

1 Goleman, Emotional Intelligence.

2 Mayer et al., "Emotional Intelligence: Theory, Findings, and Implications." 197-215

3 Goleman, Emotional Intelligence.

Understanding and selecting for EQ

Emotional Intelligence
\- 170 -

"Effective leaders are alike in one crucial way: They all have a high degree of what has come to be known as emotional intelligence. It's not that IQ and technical skills are irrelevant, they do matter, but mainly as threshold capabilities."4

EQ has been linked to superior leadership performance and individual excellence.5 Evidence has also demonstrated that measures of EQ can predict workplace outcomes over and above traditional assessment measures. One crucial challenge in this domain, however, lies in the lack of consensus between researchers on precisely how EQ should be defined and measured.

EQ's most widespread use is for determining leadership aptitude. Overall, EQ can provide useful insights during the assessment process for both selection and development when appropriately interpreted.

What is EQ exactly?

At its core, Emotional Intelligence is the ability to perceive and manage emotional information in both the self and others. The capacity to appraise and use emotional information effectively allows individuals to motivate, plan, and achieve goals through their dealings with others.

Of course, EQ's definition will depend on who you ask. Mayer and Salovey first pitched EQ as:

"...(a) set of skills hypothesised to contribute to the accurate appraisal and expression of emotion in oneself and in others, the effective regulation of emotion in self and others, and the use of feelings to motivate, plan, and achieve in one's life."6

4 Goleman, "What makes a leader"

5 Runde, "Why Young Bankers, Lawyers, and Consultants Need Emotional Intelligence."

6 Salovey and Mayer, "Emotional Intelligence," 185-211.

\- 171 -

EQ is conceptualised as a form of mental ability that allows individuals to adaptively process and respond to affective emotional information. This approach defines EQ as comprised of four discrete abilities:7

Applying EQ practically for leadership selection

The importance of EQ varies across different roles, depending on the extent to which leaders have to regulate their emotional expression

7 Mayer et al., Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT).

Figure 1. The Four Abilities of EQ

Emotional Perception

Emotional Facilitation

Emotional Understanding

Emotional Regulation

The ability to accurately identify emotions in themselves and others.

The ability to use emotions in order to facilitate task performance.

The ability to appraise emotions, and to understand which expressions are appropriate for a specific context.

The ability to manage one's own and others' emotions so as to attain specific goals.

\- 172 -

at work8. For example, EQ has been found to be important in service industries such as retail and contact centres, in which employees have to interact with clients regularly. In these roles, employees have to appear friendly and behave in a way that is consistent with their organisation's values.9

Nonetheless, one area that has not been extensively reviewed is how the relative importance of EQ may change depending on the job level of employees. For example, executive leaders may be more dependent on EQ in order to manage conflicts among team members, whereas such skills may not be required for entry-level employees.

What is the best approach for measuring EQ?

Ability-based assessments of EQ

EQ can be measured using either ability assessments or self-reports. Although the Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT)10 is the most widely used ability-based assessment to measure EQ, there is evidence suggesting that some of the items are redundant and do not capture the four-branch model on which they are based.11 Specifically, extremely high correlations (e.g. r = .90) between Facilitation and Perception has been observed, suggesting that these two factors might be measuring the same underlying construct rather than distinct EQ abilities. Additionally, a three-factor model with facilitation and perception combined provided a better fit compared to the proposed four-factor model of the MSCEIT. This implies that the factor structure of the MSCEIT may not match the theoretical expectations of the four-branch model of EQ.12 These findings together suggest that the previous lack of findings for the predictive validity of EQ may be the result of this inability of the MSCEIT to accurately define and differentiate the Facilitation and Perceiving constructs.

Aside from the poor factorial validity of the MSCEIT, another issue

8 Joseph and Newman, Emotional Intelligence," 54-78

9 Dulewicz and Higgs, "Can Emotional Intelligence be developed?" 95-111

10 Mayer et al., Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT)

11 Rossen and Kranzler, "Incremental Validity of the Mayer-Salovey-Caruso Emotional Intelligence Test," 60-65

12 Maul, "Examining the Structure of Emotional Intelligence," 503-520
\- 173 -

with the ability-based assessment that may hinder the predictive validity of EQ levels and ability, is its scoring system. Conventionally, scores on the MSCEIT are evaluated against either the general consensus of test-takers or an expert scoring system: the two ways of measurement correlate highly with one another. It is assumed that a [normative] sample of the general population is capable of appreciating the meaning of most emotional signals.13 Consequently, individuals receive scores according to the extent that their responses match that of the normative sample group.

Nonetheless, the reliance on the consensus scoring system may not produce meaningful scores, particularly at the high end of the EQ spectrum. Among items that showed convergence, there are concerns regarding the meaning associated with the consensual responses. In cognitive test batteries, individuals with high cognitive ability often respond to difficult questions in a manner different to the norm. Given that ability-based EQ is conceptualized as a form of intelligence, it has been suggested that responses to difficult items from high EQ individuals may also be non-consensual. If this is the case, then the MSCEIT may not be identifying individuals with high EQ, but rather those who get most of the easier items correct.14

Self-report measures of EQ

The other common approach to measuring EQ is to use a self-report questionnaire, which requires respondents to rate how closely the items describe their level of emotional intelligence. This avoids the methodological issues with consensus scoring in ability assessments because each item does not have an objective answer. Furthermore, self-report measures assessing EQ levels tend to have a lower correlation with cognitive ability than ability assessments, which suggests that self-report measures of EQ are a distinct and separate construct from cognitive ability and are generally more viable for evaluation. Consequently, this minimises overlap in content with other related constructs, such as personality traits.

13 Mayer et al., "Emotional Intelligence: Theory, Findings, and Implications." 197-215

14 Fiori and Antonakis, "The ability model of emotional intelligence," 329-334"
\- 174 -

Applying EQ in talent selection and development

Having understood the different streams of EQ research, it is important to consider how organisations can apply EQ insights into pre and post-hire human capital initiatives. Researchers have asserted that EQ is an essential prerequisite for successful leadership on the premise that leaders' displays of emotions within a social context can influence employees' behaviour and attitudes15. This is particularly important for transformational leadership behaviours including influencing, motivating and inspiring team members. Given the role emotions play in all interpersonal endeavours, including leadership and management, this makes sense both intuitively and scientifically.

With increasingly agile work environments, which require individuals with different skills and personalities to co-exist, there is strong evidence that executive leaders need to have high EQ when managing employees. The ability for leaders to be self-aware and communicate pro-actively with different stakeholders is a determinant for ensuring organisational success.

The use of a transformational leadership style has been shown to relate to EQ positively.16 In contrast, employees are more likely to experience negative emotions if their leaders consistently display negative emotions, which may, in turn, hinder employees' work motivation and morale17. If leaders are unable to manage their emotional control at work, employees' perception of their leaders' abilities may be reduced.

Most importantly, EQ remained predictive of these outcomes even after controlling for managers' cognitive ability and personality, suggesting that EQ may explain variance in these managerial competencies above and beyond what the traditional measures assess. Demonstrating competence in managing other people's emotions has been shown to predict employee engagement and problem-solving at work.18

15 Kafetsios et al., "A Multilevel Analysis of Relationships"

16 Barling et al., "Transformational Leadership and Emotional Intelligence" 157-161

17 Barsade and Gibson, "Why Does Affect Matter in Organization?" 36-57

18 Barsade and Gibson, "Why Does Affect Matter in Organization?" 36-57
\- 175 -

Clearly, research has demonstrated that EQ abilities impact positively on job performance. This is perhaps best reinforced by a meta-analysis that shows emotional intelligence is essential in roles that require a high level of emotional labour19. This research reinforces that when an organisation is going through significant change, leaders need to display their emotional intelligence by assessing how employees are feeling about and coping with this uncertainty. This leadership behaviour predicts employee engagement both during and after organisational change occurs.20

It is important to consider how organisations can practically apply EQ insights to their selection and development initiatives. Leaders' displays of emotions within a social context can influence employees' behaviour and attitudes.21 Thus, leaders need to apply their EQ to motivate others by expressing, drawing on, and reacting to emotional and social cues.

What are the key skills that leaders need to work on?

Ability to deal with stress, overcome obstacles, and work towards collective goals

Self-awareness, and recognising the impact of their own feelings and moods

Displaying empathy for others, and enabling people to act and grow

Obviously critical thinking skills are important and valid, but we also need people who are agile in leading change, motivating others, displaying self-awareness, and regulating the emotions they display, enabling everyone to be at their best. Measuring and predicting EQ is more important than ever, as skills like persuasion, social understanding, and empathy are going to become key differentiators once artificial intelligence and machine learning take over our other tasks. Unfortunately, these human-oriented skills are often

19 Joseph and Newman, Emotional Intelligence," 54-78

20 Barsade and Gibson, "Why Does Affect Matter in Organization?" 36-57

21 Kafetsios et al., "A Multilevel Analysis of Relationships"
\- 176 -

deprioritised by executives who do not have them themselves. We've all experienced the doctor, financial planner, or specialist who is often more focused on his or her analytics than in understanding our emotional state. With 90 percent of top performers being high in emotional intelligence22, EQ is an ever-necessary skill to assess.

Assessing EQ with Talegent PATH

The PATH questionnaire generates an EQ specific report that provides a comprehensive overview of an individual's ability to regulate, perceive, and understand emotions efficiently in the workplace. It describes traits that are distinct from, but complementary to, academic intelligence.

22 Bradberry and Greaves, Emotional Intelligence 2.0

Figure 2. The Four Domains of EQ

\- 177 -

How do you interpret this information?

Let's start with how to hire for EQ.

Those who are more self-aware are better leaders, specifically, they are able to handle stress and work collaboratively in challenging work environments. The ability to manage conflict by calibrating emotions is key; by applying self-awareness leaders are able to recognise when to apply an empathetic response, yet maintain a task focused style.

A key part of measuring EQ is to focus on the self-report answers and probe carefully during the interviews. It is key to use behavioural event interviewing when interpreting and providing feedback on preferences from the assessment. Despite 60% of businesses reporting EQ as a very important skill for their employees to have, 25% of business leaders think that EQ is undervalued during the hiring process23.

23 Higginbottom, "Emotional Intelligence Undervalued in the Hiring Process".

Figure 3. The Talegent Emotional Intelligence assessment model

\- 178 -

Why AI makes EQ more important

With artificial intelligence growing, the nature of your role is likely change significantly into the future. To stay relevant in their positions, many professionals will need to focus on skills and capabilities surrounding human interaction that AI can have trouble replicating.24 Those that will emerge on top in the rise of AI will most likely score high on EQ.

While a smart AI model may be able to diagnose complex business problems with recommendations for action, a human is required when motivating leadership teams to action, navigating the political landscape and how to spot top talent, to navigate change underpinned by EQ will become ever more important.25

How to improve your EQ

So having higher EQ may be good for those who possess its power. However, is it possible to improve your own EQ beyond the card you were dealt?

24 Beck and Libert, "The Rise of AI makes Emotional Intelligence More Important".

25 Fatemi, "Why EQ \+ AI is a Recipe for Success".

Figure 4. Example of Talegent's PATH EQ Report

Profile

Relationship Management

Self- Management

Social Awareness

Self-Awareness

HIGH

CAPABLE

CAPABLE

AREA FOR DEVELOPMENT

HIGH

CAPABLE

AREA FOR DEVELOPMENT

\- 179 -

Improving your self-awareness is a good place to start, because a disparity between self and perception by others can lead to a career derailing. 360-degree feedback surveys are a key to identifying blind spots and this feedback is a good way to awaken your self-awareness and to be more positive to deal with.

As EQ reaches a certain level of maturity there have been a few counterarguments; for example, Adam Grant found an insignificant correlation between EQ scores and survey results. Other research shows that EQ is not the only way to attain success as a leader.26 However, the model of EQ in leadership, with over 30 years of understanding to strengthen of outstanding leaders, a well-balanced set of EQ competencies prepares leaders for the challenges ahead.

26 Mayer et al., "Emotional Intelligence: Theory, Findings, and Implications." 197-215

Key Points

EQ refers to emotional management skills which increase an individual's competence at balancing emotions and reason, so as to maximise long term eff ectiveness and happiness.

EQ enables you to monitor your own and others' emotions, distinguish between different emotions, and categorize them appropriately to guide you in your landscape of human interactions.

EQ is an important prerequisite for successful leadership on the premise that leaders' displays of emotions within a social context can influence employees' behaviour and attitudes.

The ability for leaders to be self-aware and communicate pro-actively with different stakeholders is a determinant for ensuring organisational success.

Professionals that will emerge on top in the rise of AI are likely to have high EQ.
\- 180 -

Barling, Julian, Frank Slater, and Kevin Kelloway. 2000. "Transformational Leadership and Emotional Intelligence: An Exploratory Study." Leadership and Organization Development Journal, 21(3) 157-161.

Barsade, S., and D. Gibson. 2007. "Why Does Affect Matter in Organizations?" Science and Education, Acad. Manage Perspect, 21(1) 36-57.

Beck, Megan, and Barry Libert. 2017. The Rise of AI makes Emotional Intelligence More Important. 02 15. Accessed 06 25, 2019. https://hbr.org/2017/02/the-rise-of-ai-makes-emotional-intelligence-more-important

Bradberry, Travis, and Jean Greaves. 2010. Emotional Intelligence 2.0. Brilliance Corporation, 2010.

Dulewicz, V., and M. Higgs. 2004. "Can Emotional Intelligence be Developed?" The International Journal of Human Resource Management, 15(1) 95-111.

Fatemi, Falon. 2018. Why EQ \+ AI is a Recipe for Success. 05 30. Accessed 05 25, 2019. https://www.forbes.com/sites/falonfatemi/2018/05/30/why-eq-ai-is-a-recipe-for-success/#481b29a01005

Fiori, M., and J. Antonakis. 2011. "The Ability Model of Emotional Intelligence: Searching for Valid Measures." Personality and Individual Differences, 50(3) 329-334.

Goleman, Daniel. 1995. Emotional Intelligence: Why it can Matter More than IQ. New York: Bantam.

Goleman. 2004. What Makes a Leader. 01. Accessed 05 20, 2019. https://hbr.org/2004/01/what-makes-a-leader?referral=03759&cm_vc=rr_item_page.bottom

Higginbottom, Karen. 2018. Emotional Intelligence Undervalued in the Hiring Process. 04 21. Accessed 06 24, 2019. https://www.forbes.com/sites/karenhigginbottom/2018/08/21/emotional-intelligence-undervalued-in-the-hiring-process/#5d8940e652ab

Joseph, Dana L., and Daniel A. Newman. 2010. "Emotional Intelligence: An Integrative Meta-Analysis and Cascading Model." Journal of Applied Psychology, 95 54-78.

Kafetsios, K., J. Nezlek, and K. Vassiou. 2011. "A Multilevel Analysis of Relationships Between Leaders' and Subordinates' Emotional Intelligence and Emotional Outcomes." Journal of Applied Social Pyschology.

Maul, Andrew. 2012. "Examining the Structure of Emotional Intelligence at the Item Level: New Perspectives, New Conclusions." Cognition and Emotion, 26(3) 503-520.

CHAPTER NINE: REFERENCES
\- 181 -

Mayer, John D., Peter Salovey, and David R. Caruso. 2004. "Emotional Intelligence: Theory, Findings, and Implications." Psychological Inquiry, 15 197-215.

Mayer, John D., Peter Salovey, and David R. Caruso. 2002. Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT). Toronto, Ontario: Multi-Health Systems, Inc.

Rossen, E., and J. H. Kranzler. 2009. "Incremental validity of the Mayer-Salovey-Caruso Emotional Intelligence Test Version 2.0 (MSCEIT) after Controlling for Personality and Intelligence." Journal of Research in Personality, 43(1) 60-65.

Runde, James. 2016. "Why Young Bankers, Lawyers, and Consultants Need Emotional Intelligence." Harvard Business Review. 09 26. Accessed 06 26, 2019. https://hbr.org/2016/09/why-young-bankers-lawyers-and-consultants-need-emotional-intelligence

Salovey, Peter, and John D. Mayer. 1990. "Emotional Intelligence." Imagination, Cognition and Personality, 9(3) 185-211.
\- 182 -
\- 183 -

10

What is grit?

Grit is not about being the smartest person in the room, but rather it is the willingness and ability to hang in there when the going gets tough. It's a single-minded dedication to a singular goal, coupled with the determination to see it through, which requires clear focus and prioritisation. Employees with true grit can overcome obstacles to reach goals and be confident and composed in the face of challenges. Grit predicts who will accomplish challenging goals.1

Angela Duckworth's definition of grit is:

"Passion and perserverance for long term and meaningful goals"2

People who are strong in grit are always striving to improve. They are willing to make the sacrifices necessary to achieve while remaining passionate about what they do.3 Grit is an integral aspect of success that is independent of, and contributes beyond, talent and intelligence. Grit involves consistently working towards a goal, maintaining effort and interest over time despite encountering failure, challenges, and plateaus in progress.

1 Lee and Duckworth, "Organizational Grit," 98-105

2 Duckworth, The Power of Passion and Perseverance

3 Sheehan, "Building Organizational Grit"

Grit to overcome obstacles to reach goals and remain composed

Grit

\- 184 -

Grit consists of two key components:

Why is grit important?

Grit is a driver of achievement and success.4 It is an essential quality for success as it contributes to predictive value independently of talent and intelligence. People must put in effort for a talent to become a skill that leads to success, and this effort can be a partial result of grit.

Research shows that grit predicts high performance in a variety of domains.5 It can assist in predicting the likelihood of graduating from high school or college, and performance in stressful jobs such as sales. Grit also helps people to the highest ranks of leadership in many demanding fields.6 Grit can predict which people will accomplish challenging goals, as those with high grit are more likely to persist when faced with challenges.

How do you measure grit when hiring?

Questionnaires and scales are useful for research and self-reflection. This type of scale or survey is helpful for getting a guide of an applicant's grit levels; however these psychological tests and surveys can easily be faked to have high grit. They should not be the sole assessment of grit when recruiting and should always be used with other measures.7

Another way to assess grit in candidates is to look at their history, as carefully reviewing applicants track records can help assess grit. Many year commitments to an organisation, rather than frequent job shifts,

4 Baruch-Feldman, "What is Grit and Why is it Important?"

5 Sheehan, "Building Organizational Grit"

6 Lee and Duckworth, "Organizational Grit," 98-105

7 Lee and Duckworth, "Organizational Grit," 98-105

\- 185 -

can indicate grit \- especially if there is evidence of advancement and not just frequent shifts between specialties. When checking references, it is vital to listen for evidence that candidates have bounced back from failure in the past and not just for successes. Candidates who have demonstrated flexibility in dealing with unexpected obstacles and sustained a habit of continuous self-improvement are those that are likely to be high in grit. Most of all, look for signs that people are driven by a purpose bigger than themselves, one that resonates with the mission of your organisation.8

Grit measurement and reporting

Talegent's Grit report offers ways to assess and measure candidates on competencies that are related to grit. The information gives recruiters insight into a candidate and assists in hiring decisions and should always be used as part of a robust selection process. These competencies include:

Problem analysis:

Using experience, data, and theory to work through problems.

High scorers are likely to use data to support decision making and will evaluate the logic of information presented. They can reflect and draw on past experiences, and use theories as a basis for problem-solving.

Self-belief:

Being confident in your ability to succeed, retaining a positive attitude.

High scorers are likely to be confident in their decision making and ability to succeed. They see feedback as valuable and maintain a positive outlook despite adversity.

Persistence:

Being focused and determined to achieve despite difficulties.

High scorers are likely to push themselves towards goals and see commitments through to the end. They remain focused and engaged even when working with managed risks.

8 Lee and Duckworth, "Organizational Grit," 98-105 
\- 186 -

Self-control:

Resisting temptations in favour of long-term goals.

High scorers are likely to remain calm and controlled despite challenges, and will focus on long-term payoffs over short-term temptations. They keep promises they make to themselves and others and are aware of their weaknesses.

Figure 1. Talegent Grit report

Grit within an organisation

Having a workforce that is made up of people with high levels of grit does not necessarily create an organisation with high grit. To build grit as an organisation, it is important to make organisational goals and the goal hierarchy explicit. If an organisation cannot prioritise its goals, this can lead the company to have difficulty making strategic decisions.9 Employees will also be likely to experience trouble in prioritising their work. Teams and employees need an overarching goal that they are committed to and to which their individual goals can be tied. The organisational goals must also align with the culture that has been developed. Introducing new goals or values that do not work alongside

9 Lee and Duckworth, "Organizational Grit," 98-105

Grit Scores

Problem Analysis

Self-Belief

Persistence

Self-Control

HIGH

CAPABLE

CAPABLE

AREA FOR DEVELOPMENT

HIGH

CAPABLE

AREA FOR DEVELOPMENT

\- 187 -

the organisational culture may result in employees being unwilling to put the required effort into them.10

Creating the right kind of working environment will also help cultivate a 'gritty organisation'. In cultivating a workplace that is both demanding and supportive, organisations can develop employees with grit and create an aligned workplace. This can be done by incorporating high expectations, ensuring access to resources needed to learn and grow and offering psychological support.11 Promoting a growth mindset—the belief that abilities can be developed through hard work and feedback, and that significant challenges and setbacks provide an opportunity to learn, is a good way to build this.

Another essential characteristic of gritty organisations is an unrelenting drive to improve. For this to work, leadership must accept and communicate complications and errors, something that isn't always easily done. Leaders that are explicit about the need for calculated risk-taking, reducing mistakes, and continual learning tend to be the ones who inspire real growth.

Individuals with high levels of grit will have their own goal hierarchies but will embrace their team's high-level goals that in turn support the organisation's overarching goal. Teams with high levels of grit have a desire to work hard, learn, and improve together. These teams, and their organisations, will show resilience when faced with setbacks and will maintain a strong sense of priorities and purpose.12 An organisational culture stemming from grit helps teams to consistently perform at high levels, even when faced with unpredictable challenges.

To attract employees, build teams, and develop an organisational culture around grit, leaders must themselves should have high levels of grit, providing a visible and authoritative role model for others. In their personal interactions, they must keep standards high and

10 Sheehan, "Building Organizational Grit"

11 Duckworth, The Power of Passion and Perseverance

12 Duckworth, The Power of Passion and Perseverance
\- 188 -

supportive.13 Leaders who do the best have passion and persistence. They are incredibly adaptable, so when a roadblock arises rather than quitting or adjusting the goal, they can quickly find a new approach.14

Relationship between grit and other traits

Grit is related to two other traits: self-control and conscientiousness.15 Someone demonstrating high self-control or high conscientiousness is also likely to score high in grit. Grit and these related constructs have been associated with lifetime educational attainment and professional success. Many of these studies have also suggested that grit varies with age, similarly to these two constructs.16 This gives the impression that grit is often learned indirectly alongside other traits such as self-control and conscientiousness, and that it can be developed in individuals with low grit.

It has been suggested that the concept of grit may simply be an example of remarketing existing concepts with nothing substantially new being added.17 For example, many tests assessing or measuring conscientiousness use items that are almost identical to items on the Grit Scale, and the correlations between grit and conscientiousness reported in many studies tend to be extremely high. However, studies have also shown that grit predicts the completion of challenging goals despite obstacles and setbacks even when these other characteristics are held constant.18

Grit and conscientiousness

Conscientiousness can be defined as a spectrum of constructs describing the tendency to be self-controlled, responsible to others, hardworking, orderly, and rule abiding.19 Some studies found grit to account for additional variance in achievement and educational

13 Lee and Duckworth, "Organizational Grit," 98-105.

14 Goran, "5 Ways Successful Leaders Cultivate Grit".

15 Vitelli, "The truth About Grit".

16 Kannangara et al., "All That Glitters Is Not Grit".

17 Credé, "What Shall We Do About Grit?".

18 Schmidt et al., "Same Same, but Different".

19 Roberts et al., Conscientiousness, 369-381
\- 189 -

attainment over and above conscientiousness, while others found that grit did not explain additional variance in GPA when controlling for conscientiousness.20

However, when compared to more traditional predictors such as cognitive ability and grades, grit scores proved to be just as useful in predicting who would stay in school.21 People scoring high in grit were also less likely to drop out of college than those with low grit.

Overall, there are some strong similarities between grit and conscientiousness, and in some aspects they do measure or predict the same thing, but it seems that grit does account for achievements and results that conscientiousness does not. Much like conscientiousness, people appear to become "grittier" as they grow older and more mature. There is also a strong correlation between grit and other traits such as psychological well-being, optimism, and life satisfaction.22

Grit and self-control

Self-control refers to the management of attention, emotion and behaviour to achieve goals rather than putting goals aside for more immediately pleasurable things. Having strong self-control is often associated with positive life outcomes.23 Grit is closely associated with the concept of self-control,24 where grit and self-control differ is in the types of goals and the timescale that is involved. Self-control is required to manage conflicting lower-level goals or actions, but grit is persisting in a high-level goal over long periods of time, regardless of challenges faced.25 Having low self-control often includes indulging in an action that satisfies an immediate low-level goal but is soon regretted. The alternative to grit is giving up on a high-level goal because the means to the end of that goal have been blocked.

20 Credé, "What Shall We Do About Grit?".

21 Schmidt et al., "Same Same, but Different".

22 Vitelli, "The truth About Grit".

23 Roberts et al., Conscientiousness, 369-381

24 Duckworth and Yeager, "Measurement Matters," 237-251

25 Kannangara et al., "All That Glitters Is Not Grit".
\- 190 -

Self-control and grit both involve having the persistence to achieve goals in the face of adversity. It seems that self-control is more matched with everyday success and smaller goals, whereas grit is more tied to achievements that take long periods of time to accomplish.26 A construct validity test of the Grit Scale showed that high grit scorers had significantly higher levels of self-control and mental well-being, were more resilient, and were more likely to have a growth-oriented mindset.27

Developing grit

While some people tend to have higher levels of grit than others, it is something that can be developed. Developing grit requires a highly disciplined effort that starts with identifying specific areas for growth and persisting in achieving these goals. Grit involves persisting over time despite facing challenges; the same is true for developing grit. Developing grit consists of a few key components:28

Having passion:

Having an intrinsic interest in your work or goals is essential. Passion not only fuels progress, but it also drives grit in a big way. If you know what you want and why, you will work hard and persevere to achieve it. When you understand your purpose, you won't give up in the face of challenge.

Building perseverance:

Having resilience in the face of adversity and unwavering devotion to continuous improvement is necessary for grit. Learning to keep going when faced with challenges is needed to build and develop grit.

Embrace Failure:

A big part of leadership and grit is knowing that you will fail, but you don't allow failure to define you or stop you. Failure is a big part of the path to success; it gives you the opportunity to learn. When you have grit and you fail, you move forward.29

26 Duckworth and Yeager, "Measurement Matters," 237-251

27 Kannangara et al., "All That Glitters Is Not Grit".

28 Conant Leadership, "How to Build Leadership Grit"

29 Goran, "5 Ways Successful Leaders Cultivate Grit".
\- 191 -

Developing your grit and strengthening your resolve often helps develop better leadership skills as a result. Cultivating grit might be the difference between remaining the same or achieving a breakthrough in a goal you've had for a while. Grit is the passion and perseverance essential for achieving long-term, meaningful goals. People who are strong in grit are always striving to improve.30 They are willing to make the sacrifices necessary to succeed, while remaining passionate about what they do.31

30 Duckworth, The Power of Passion and Perseverance

31 Sheehan, "Building Organizational Grit"

Key Points

Grit is the passion and perseverance to complete long-term goals.

In cultivating a workplace that is both demanding and supportive, organisations can develop employees with grit and create an aligned workplace.

Someone demonstrating high self-control or high conscientiousness is also likely to score high in grit. Grit and these related constructs have been associated with lifetime educational attainment professional success.

There is also a strong correlation between grit and other traits such as psychological well-being, optimism and life satisfaction.

Developing grit requires a highly disciplined effort that starts with identifying specific areas for growth and persisting in achieving these goals.
\- 192 -

Baruch-Feldman, Caren. 2017. What is Grit and why is it Important? 10 3. Accessed 08 5, 2019. https://www.newharbinger.com/blog/what-grit-and-why-it-important

Conant Leadership. 2016. How to Build Leadership Grit. 06 24. Accessed 08 2, 2019. https://conantleadership.com/how-to-build-leadership-grit/

Credé, Marcus. 2018. "What Shall We Do About Grit? A Critical Review of What We Know and What We Don't Know." Educational Researcher, 47 606–611.

Duckworth, Angela L. 2016. Grit: The Power of Passion and Perseverance. New York: Scribner.

Duckworth, Angela L., and David S. Yeager. 2015. "Measurement Matters: Assessing Personal Qualities Other Than Cognitive Ability for Educa-tional Purposes." Educational Researcher, 44(4) 237-251.

Goran, Jon. 2017. 5 Ways Successful Leaders Cultivate Grit and Achieve Long Term Goals. 05 19. Accessed 08 3, 2019. https://medium.com/the-mis-sion/5-ways-successful-leaders-cultivate-grit-and-achieve-long-term-goals-1492bac81559

Kannangara, Chathurika S., Rosie E. Allen, Gill Waugh' Nurun Nahar, Samia Zahraa Noor Khan, Suzanne Rogerson, and Jerome Carson. 2018. "All That Glitters Is Not Grit: Three Studies of Grit in University Students." Frontiers in Psychology, 9.

Lee, Thomas H., and Angela L. Duckworth. 2018. "Organizational Grit." Harvard Business Review, 10: 98-105.

Roberts, B. W., J. J. Jackson, J. V. Fayard, G. Edmonds, and J. Meints. 2009. "Conscientiousness." In Handbook of Individual Differences in Social Be-havior, by & J. Hoyle (Eds.) M. Leary, 369–381. New York: Guilford Press.

Schmidt, Fabian T.C., Gabriel Nagy, Johanna Fleckenstein, Jens Möller, and Jan Retelsdorf. 2018. "Same Same, but Different? Relations Between Facets of Conscientiousness and Grit." European Journal of Personality.

Sheehan, Rob. 2018. Building Organizational Grit. 09 3. Accessed 8 2, 2019. http://insightswithimpact.org/2018/09/03/building-organizational-grit/

Vitelli, Romeo. 2016. The Truth About Grit. 06 29. Accessed 08 2, 2018. https://www.psychologytoday.com/nz/blog/media-spotlight/201606/the-truth-about-grit

CHAPTER TEN: REFERENCES
\- 193 -
\- 194 -
\- 195 -

11

New analytic capabilities mean that organisations are able to predict business outcomes based on workforce and people analytics. Data is an asset that can be utilised to benefit organisations, and people analytics is the practice of collecting and interpreting data on the workforce to make better business decisions. It can help organisations measure and develop skills within the organisation while predicting employee performance based on past behaviour. When using data analytics effectively, organisations can improve overall productivity and employee performance by identifying and filling skill gaps through repeatable, scalable and objective HR decisions.

Why people analytics is important

Research on people analytics adoption shows that advanced data-driven organisations outperform emerging organisations on various financial metrics.1

Compared to emerging analytic organisations, those with advanced capability in people analytics have:

While widespread adoption of people analytics might be limited, it has grown from an HR-specific function to one that can work to benefit all departments within the company. The ability to analyse vast amounts of data should be a business-wide function , not just limited to HR.

1 Visier, The Age of People Analytics.

Predictive people analytics demystified

People Analytics

\- 196 -

To develop a data-savvy business, it must be a focus throughout the organisation, and should start at the top with the C-level leaders. In order to truly benefit the organisation with people analytics, HR should work closely with the C-level leaders.HR leaders are best suited to predict the future needs of the company regarding the required skill sets of future candidates.2

While recruitment is the main area within HR in which data analytics is applied for many organisations, it is also used in performance measurement, workforce planning and retention3. People analytics can be utilised throughout an organisation, as it can have a positive business impact many departments over and above HR. There is currently large growth in the use of interactional or relational analytics, and studying employee behaviour to better understand potential business improvement opportunities.

A recent report from Deloitte found that 71% of companies view people analytics as a high priority for their organisation. However, only 9% say they have a good understanding of the factors that drive performance, and 8% say they don't have any usable data in the first place4. A data-savvy HR team is necessary to collect and use relevant information. By understanding the analytic capabilities of your HR team and filling any gaps through development and hiring, recruiters will be well positioned to make the most of analytic tools to add long term financial value to the organisation through better hiring decisions.

Why HR's role is shifting

In the past, HR leaders have relied on trusting their gut to make people and recruitment decisions, which is often ineffective5. Additionally, due to the tactical day to day role requirements and time constraints of their roles, many HR leaders have struggled to advance their digital competency6. These factors have hindered their ability to leverage data

2 Selewach, "Reasons Why HR Should Be Part of the C-Suite"

3 Collins et al., "People Analytics."

4 Collins et al., "People Analytics."

5 Prickett et al., "The Importance of First Impressions in a Job Interview".

6 Guenole et al., Power of the People.
\- 197 -

into talent strategies that can help transform their businesses.7

7 Sinar et al., HR Leaders Need Stronger Data Skills.

OLD rules

NEW rules

People analytics is viewed as an HR team focused on advanced analytics within HR

People analytics is viewed as a business analytics team that works across the business to drive business results

Analytics focused on HR topics such as retention, engagement, learning, and recruitment metrics

Analytics focuses on business problems such as sales productivity, workforce effectiveness, high-potential retention, fraud, accident patterns, and other operational needs

The organisation makes a business case for better data integration, quality, and tools

The organisation has already committed to accurate and integrated data, and has tools and processes to ensure quality and ease of analysis

The people analytics team has a strong understanding of HR data

The people analytics team understands HR data, financial data, and customer data, and it has relationships with all the other analytics groups in the company

The people analytics team lives in HR operations and reports to HR technology, or in functional areas

The people analytics team operates at a senior level, reports to the CHRO, and serves business leaders across the company

The people analytics team is a small set of technical experts with data management and statistical skills

The people analytics team is a multidisciplinary team, with a focus on business consulting, visual communications, and problem solving

People analytics is staffed by PhD statisticians whose primary focus is the development of models and data warehouses

People analytics is a consulting function that helps business leaders solve problems

People analytics focuses on employees

People analytics focuses on the entire workforce, including employees and contingent labor

The people analytics team focuses heavily on engagement survey data and employee happiness and culture

The people analytics team moves beyond engagement to understand the detailed drivers of engagement and builds culture models to understand what drives the workforce

Figure 2. People analytics: Old rules vs, new rules. Deloitte University Press dupress.deloitte.com
\- 198 -

Changing labour market dynamics are pushing HR to be faster and smarter about how it finds and develops the talent that organisations need. A recent global leadership survey found that on average, HR leaders lag behind other professionals in their ability to collect and use data to guide business decisions8. Investing in developing HR's data and technology skills should be a top priority if companies want to attract and keep the best talent, as people have a significant impact on an organisation's performance

Developing and hiring for analytical capability within the team

You can gauge HR professionals' levels of comfort with analytics by checking for specific skills when hiring and monitoring employee engagement with learning opportunities. Once you understand the different levels of analytical comfort and expertise that exist within the team, you can determine how to hire and develop each skill level. Analytical ability can be assessed by administering well-designed psychometric tests that measure general mental ability (which indicates a person can acquire job-related knowledge quickly) or monitoring current analytic performance. You should also consider less traditional evidence of learning beyond formal education, such as online courses.

Research has shown that HR professionals can be broadly categorised into one of three groups with respect to their current analytical capability9:

8 Development Dimensions International, Global Leadership Forecast 2018.

9 Guenole et al., Power of the People.

\- 199 -

The key to developing analytical capability among existing employees is to provide engaging learning opportunities to workers at all levels of expertise.

Keep analytically savvy workers' skills up to date by providing opportunities for advanced training such as participation in professional groups and conferences. Pair them with a colleague who is analytically resistant to help them use data and analytics to solve a problem with which they are struggling. The ultimate goal is not to transform the analytically resistant into data experts, but to have them see the value in analytics and, ideally, embrace it as a path to success.

A good starting point for analytically willing employees is to provide a base education on HR analytics. This can be achieved by requiring all HR staff to complete an online course about the basics of workforce analytics, or by again pairing them with an analytically savvy colleague.

Measuring analytics throughout the company

Finding ways to improve HR's data and analytic skills can be challenging, a good place to start is by upskilling teams in areas that impact critical business outcomes. To achieve this, companies can support their HR leaders by helping them forge internal partnerships and making the link between people analytics and business outcomes clear.

At most companies, other departments use data and technology in ways that could apply to HR. For example, working with marketing for guidance on search engine optimisation (SEO) could help HR improve its recruitment efforts. Such internal collaborations may not only help employees attain new skills, but also develop a collaborative and data-driven culture.

HR needs to tie its people and performance data and business outcomes. This process begins with gathering data about the skills, capabilities, and behaviours of the existing workforce, including its leaders, which is often done through assessment. By collecting data on employee ability and tying it to business outcomes such as turnover or 
\- 200 -

productivity , HR can highlight key areas of risk and opportunity for the company.

Taking these initial steps can yield big dividends. Research shows that companies excelling in using data and analytics to drive their talent strategy are more than six times more likely to have a strong leadership team. Moreover, those with the strongest digital leadership capabilities outperform their peers by 50% in a financial composite of earnings and revenue growth.10

People analytics can have a range of benefits on a business, and a large section of this is through HR analytics for recruitment.11 Within HR analytics many aspects can be measured12, some of the more important ones are: employee net promoter score, turnover rate, cost per hire, average time to fill, training cost and time, revenue per employees and the quality of hire.13

Another commonly used recruiting metrics is the average time to fill. This looks at the average number of days it takes from a job being posted to an offer being accepted within an organisation. The time to fill can vary between companies and positions as different recruiting methods can be applied, but a survey by the Society for Human Resource Management (SHRM) found the average time to fill is 42 days.14

The base formula for this is:

10 Development Dimensions International, Global Leadership Forecast 2018.

11 Green, "10 Predictions in HR".

12 Altiero, "14 HR Metrics and How to Calculate Them".

13 Visier, The Age of People Analytics.

14 SHRM, Human Capital Benchmarking Report.

AVERAGE TIME TO FILL

Average Time to Fill

Total Number of Days of Open Jobs

Total Number Open Jobs

=

\- 201 -

To gain a better understanding of their recruitment process, many HR leaders will break down the time to fill into segments. As each company's hiring process is different these segments can include:

Time to advertise an open position in all channels

Time to identify an acceptable candidate

Time to complete assessments

Time to complete all interviews

Time to create and extend an offer

Time for a candidate to accept an offer

This sort of breakdown helps recruiters get a fuller picture of their time to fill and identify problems within the recruitment process that may be increasing time to fill more than is necessary.15 The above metric equation can be used to calculate the average time for each of these segments.

Hiring faster increases team productivity as you won't lose high-quality in-demand candidates who may be gone in as few as 10 days. Slow hiring means that key unfilled positions are open for dozens of additional days. And with no one in the job, the work remains undone. The productivity or revenue loss for some jobs may be several thousand dollars for every position vacancy day. The strain of team members having to fill-in for vacant positions may also increase team stress and turnover.16

A net promoter score (NPS) is used to determine customer satisfaction, and similarly, an employee net promoter score (eNPS) can be used to determine employee engagement and happiness.

15 Smykal, "Breaking Down The Time To Fill Metric".

16 Sullivan, "Recruiting's Top 7 Bottom-line Business Impacts".

EMPLOYEE NET PROMOTER SCORE
\- 202 -

To get an eNPS score, employers must routinely survey their employees, for example twice a year or once every quarter. The survey should ask employees to anonymously rate their willingness to refer their company to a friend or colleague, or something similar, on a scale of 1-10.

Break the results into these three sections:

Ratings from 0-6 are detractors

Ratings from 7-8 are passive

Ratings from 9-10 are promoters

To calculate your eNPS, use this equation:

eNPS = % Promoters \- % Detractors

eNPS is a great metric for business leaders to measure frequently and use to set goals around improvement each time the survey is conducted. A higher eNPS shows higher employee engagement, which in turn predicts lower levels of attrition.

Employee turnover rate is one of the most commonly used HR metrics. It shows the percentage of employees who leave a company during a given time frame that the company intends to replace. Turnover metrics can help gauge a company's culture; high turnover rates could mean internal issues that leadership should address, but low turnover rates mean that your employees are motivated to stay.17

One way to calculate this metric is:

17 Reh, How to Avoid Excessive Employee Turnover.

TURNOVER RATE

Turnover Rate =

x 100

( )

Number of Separations

Average Headcount

\- 203 -

It is also important to monitor early turnover, employees who leave within their first year:

Decreasing turnover can have a significant impact on an organisation, as turnover costs are usually higher than recruitment and training costs combined. According to a recent study, the average turnover cost per nurse is $23,800.18

Calculating cost per hire helps companies and hiring departments understand the cost of each new hire, which is why it is often viewed as one of the most important recruiting metrics.

This requires some time to accurately calculate, as there are internal and external expenses that need to be calculated first but accurately measuring cost per hire can help determine how cost-effective a recruiting strategy is.

External recruiting costs can include agency fees, advertising, job fairs, etc.

Internal recruiting costs can include salary and benefits for everyone involved in the recruiting process as well as recruiting software, etc.

To calculate cost per hire:

18 (North, et al. 2013)

COST PER HIRE

New Hire Turnover Rate

x 100

( )

Number of Employees Who Leave After <1 Year

Total Number of Separations During the Same Period

=

( )

Cost Per Hire =

+

Total External Costs

Total Internal Costs

Average Headcount

\- 204 -

Learning and development are important for both employers and employees. As many businesses put a lot of resources to help train their workforce, it is important to be able to monitor and be able to justify the time and cost of training19.

One popular metric for this is training cost per employee, which breaks down how much on average the company is spending on learning and development per person.

The formula to calculate this metric is:

The second component of this is training time per employee. This breaks down the average hours of training time per person and can help a business determine how many training hours each employee needs to meet larger organisational goals.

Here's how to calculate this HR metric:

Revenue per employee is a ratio used to determine the revenue generated per individual working at a company. This can be used for determining the efficiency and productivity of an average employee and

19 Altiero, "Why On-Demand Learning Is More Important Than Ever".

Training Cost Per Employee

Total Money Spent on Training

Number of Employees Who Participated in Training

=

Training Time Per Employee

Total Number of Training Hours

Total Number of Employees

=

REVENUE PER EMPLOYEE

TRAINING COSTS AND TIME PER EMPLOYEE
\- 205 -

can help determine how a company is best able to utilise its employees and contribute to its business growth20.

To calculate a monthly number:

To calculate a yearly number:

Generally, this ratio is employed to compare the performance of companies within an industry, as labour-intensive companies usually have lower ratios compared to those which require a lesser amount of labour.

Measuring the quality of hire is a process that is still evolving, and as such companies can measure it in a variety of ways. Figuring out how to define the measurement of quality of hire is a challenge and depending on what an organisation's priority is, quality of hire can mean different things. Common quality-of-hire metrics can include turnover rates, job performance and employee engagement, or any of the other hiring metrics we have mentioned in this chapter. Quality of hire can also be defined as the on-the-job performance of new hires, compared to a standard employee.

Measuring Quality of Hire

As pre- and post-hire performance quality measures are distinct, candidate metrics should be calculated both pre- and post-hire to effectively measure the quality of hire at each stage.

20 Corporate Finance Institute, "What is Revenue Per Employee".

Revenue Per Employee

Monthly Revenue

Number of Employees

=

Revenue Per Employee

Yearly Revenue

Number of Employees

=

QUALITY OF HIRE
\- 206 -

To calculate pre-hire quality, you can use measures such as candidate assessment scores and structured interviews, depending on what you assess candidates on and how you wish to measure hire quality. When this measure is properly calculated, employers can focus on specific sources of hiring problems within recruitment before they impact the quality of hire.

To measure post-hire performance, individual employee performance goals can be set up at a monthly, quarterly, or yearly basis. The same goes for team or departmental goals. This can also be measured through metrics such as turnover and revenue per employee but is a more general calculation less specific to individual employees.

It is essential to be able to link the scores you calculate the relevant outcomes that contribute to profitability at your organisation. You should be able to say, "that we reduced our time-to-fill X percent, which got our design team to finish their project a quarter earlier, resulting in X dollars of savings which contributed to X amount of revenue."

A focus on hiring top performers in revenue-generating jobs will immediately increase revenue. For example, spending time and resources to hire top salespeople can yield dramatic results as they can sell between 4 and 10 times more than the average salesperson. Prioritising the hiring of innovators will also dramatically improve productivity and business results as innovators can produce 10 to 25 times the output of an average worker in the same job. Hiring more innovators may indirectly encourage current team members to increase their levels of innovation.21

Hiring candidates who have both the required current skills and the soon-to-be-needed "future skills" will reduce the training need when the needed job skills shift. Hiring individuals that are self-directed learners and that are already developing your firm's required "future skills" make it possible to maintain team productivity and innovation over an extended period. While there may not be one "right" way to

21 Sullivan, "Recruiting's Top 7 Bottom-line Business Impacts". 
\- 207 -

measure employee performance, monitoring performance can assist with promotions, salary increases and business growth.

If you're serious about people analytics, you will need the right tools

To make the most of people analytics, organisations need to make sure they have the right technology to help the team, otherwise they will struggle to collect and analyse the data22. Organisations should first look at their core human capital systems providers, such as the payroll provider or their main recruiting platform, as these providers should be able to provide analytic data and the tools to understand it.

It is crucial to ensure that data collection and analytics is not siloed, but this can be difficult when dealing with multiple systems and vendors. Integration between Job Boards, ATS, Core HR, LMS, TMS & Recruitment systems is required to ensure data and insights across the employee lifecycle can be accurately analysed and improved. Multi-feature systems such as HubSpot or Scoro can decrease the complications with this as they assist with multiple tasks rather than a singular function.

The team will also need a statistical analysis tool such as Excel, SPSS, or SAS. Not everyone will need to use it, there may be a statistician that uses it, but you will need to have that type of technology.23 Adopting a visualisation or presentation tool, such as Tableau or PowerBI, can help other people at the company understand the data. Not everyone will be able to interpret information from a statistical analysis with a bunch of tables, so using a tool that can show charts and graphs will help organisations make the most of their data.

Once there is a firm grasp of people analytics within the team, specialised tools can provide even further information, such as survey tools that automatically compute correlation or analyse the sentiment behind an employee's written responses

22 McLaren, "Getting People Analytics Right".

23 Bersin, "Introduction to People Analytics"
\- 208 -

Summary

HR analytics are essential when identifying and securing the best talent; as well as for tracking and analysing recruiting metrics which can help strengthen talent acquisition strategies. People analytics is an effective way to make evidence-based decisions that improve organisations. However, looking at individual attributes will have a limited impact if organisations are unable to see how a team will work together and how to improve employee relations. It is important to look at relationships between employees as well as individual performance. If companies use relational people analytics, they can estimate the likelihood that an employee, a team, or an entire organisation will achieve a performance goal. This data can be used to tailor staff assignments or to develop a team. The best companies will use people analytics to build an efficient and more productive work environment.24

High performing analytics teams should borrow from and work closely with business operations, finance and other departments – not focus solely on HR. To succeed, organisations need to shift their cultural mindset from "HR measuring HR" to "HR enabling the business to deliver".

To build an extraordinary workplace, you need to harness the power of analytics. Today's business executives should be applying pressure to all aspects of their business to use analytics to improve their processes. The application of big data and analytics are being used more to harness potential and build a stronger workforce that is fully aligned with company values and organisational success. This new analytical discipline means we can measure what potential and current employees are likely to do and therefore impact business results.

24 Leonardi and Contractor, "Better People Analytics," 70-81.
\- 209 -

Key Points

New analytic capabilities mean that organisations are able to predict business outcomes based on workforce and people analytics.

When using data analytics effectively, organisations can improve overall productivity and employee performance by identifying and filling skill gaps.

Advanced data-driven organisations outperform emerging organisations on various financial metrics.

Collecting data on employee ability and tying it to business can help highlight key areas of risk and opportunity for the company.

Key aspects to measure are employee net promoter score, turnover rate, cost per hire, average time to fill, training cost and time, revenue per employees and the quality of hire.
\- 210 -

Altiero, Michael. 2018. 14 HR Metrics and How to Calculate Them. 27 06. Accessed 06 28, 2019. https://www.extensisgroup.com/blog/14-hr-metrics-and-how-to-calculate-them

Altiero, Michael. 2018. Why On-Demand Learning Is More Important Than Ever. 19 03. Accessed 07 03, 2019. https://www.extensisgroup.com/blog/why-on-demand-learning-is-more-important-than-ever

Bersin, Josh. 2019. Introduction to People Analytics. 10 05. Accessed 06 28, 2019. https://www.linkedin.com/learning/people-analytics/introduction-to-people-analytics

Collins, Laurence, David R. Fineman, and Akio Tsuchida. 2017. People Analytics: Recalculating the Route. 28 02. Accessed 06 20, 2019. https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2017/people-analytics-in-hr.html

Corporate Finance Institute. 2015. What is Revenue Per Employee? Accessed 07 03, 2019. https://corporatefinanceinstitute.com/resources/knowledge/finance/revenue-per-employee/

Development Dimensions International. 2018. "Global Leadership Forecast 2018." Trends Report. Accessed 06 28, 2019. https://www.ddiworld.com/glf

Green, David. 2018. 10 Predictions in HR. 13 12. Accessed 06 28, 2019. https://www.linkedin.com/pulse/human-touch-10-predictions-hr-2019-david-green/

Guenole, Nigel, Jonathan Ferrar, and Sheri Feinzig. 2017. Power of the People: How Successful Organizations Use Workforce Analytics To Improve Business Performance. FT Press Analytics.

Leonardi, Paul, and Noshir Contractor. 2018. "Better People Analytics." Harvard Business Review., 11-12: 70–81.

McLaren, Samantha. 2019. Getting People Analytics Right. 13 06. Accessed 06 28, 2019. https://business.linkedin.com/talent-solutions/blog/talent-analytics/2019/getting-people-analytics-right-with-josh-bersin

North, N., W. Leung, T. Ashton, E. Rasmussen, F. Hughes, and M. Finlayson. 2013. "Nurse Turnover in New Zealand: Costs and Relationships with Staffing Practises and Patient Outcomes." Journal of Nursing Management, 21(3) 419-428.

Prickett, T, N Gada-Jain, and F. J Bernieri. 2000. The Importance of First Impressions in a Job Interview. Chicago, IL: Midwestern Psychological Association.

Reh, F. John. 2019. How to Avoid Excessive Employee Turnover. 10 01. Accessed 07 02, 2019. https://www.thebalancecareers.com/employee-turnover-2275788

CHAPTER ELEVEN: REFERENCES
\- 211 -

Selewach, Ron. 2018. Reasons Why HR Should Be Part of the C-Suite. 12 04. Accessed 07 24, 2019. https://www.hrmc.com/reasons-why-hr-should-be-part-of-the-c-suite/

SHRM. 2016. Human Capital Benchmarking Report. Human Capital Report, Society for Human Resource Management.

Sinar, Evan, Rebecca L. Ray, and Adam L. Canwell. 2018. HR Leaders Need Stronger Data Skills. 25 10. Accessed 06 27, 2019. https://hbr.org/2018/10/hr-leaders-need-stronger-data-skills

Smykal, Emily. 2015. Breaking Down The Time To Fill Metric For Recruiters. 11 9. Accessed 06 28, 2019. https://www.jibe.com/ddr/breaking-down-the-time-to-fill-metric-for-recruiters/

Sullivan, John. 2019. Recruiting's Top 7 Bottom-line Business Impacts That Most Ignore. 3 06. Accessed 7 24, 2019. https://www.ere.net/recruitings-top-7-bottom-line-business-impacts-that-most-ignore/

Visier. 2018. The Age of People Analytics: Survey on Characteristics, Value Achieved, and Leading Practices of Advanced Organizations. Survey Research , Visier.
\- 212 -
\- 213 -

12

Since the introduction of the first personal computers in the early 1980s, humans have roughly doubled the amount of data created every two years. Fast forward to today, and we have created over 33 zettabytes of data1 and 90% of that data has been created over the last two years2. It's estimated that by 2025, we will be producing as much data in a single week as we did in the first 30 years of the home computer revolution3.

It's not just the volume of data that is increasing; the complexity of the data is also increasing. Before smartphones the data we created tended to be simple and well structured; with smartphones we are creating more complex data more frequently, such as videos, tweets, hashtags, 'likes' and social network connections. Due to this increase in volume, our traditional methods of gaining insight from data like video, voice, or social media can struggle, or fail to work altogether. The need to gain insights from this huge volume of complex data has given birth to new approaches, such as artificial intelligence, to process and extract meaning.

1 Reinsel et al., Data Age 2025.

2 Marr, "How Much Data Do We Create Every Day".

3 IDC, "Data Growth, Business Opportunities, and the IT Imperatives".

AI for an intelligent candidate journey

Artificial Intelligence

\- 214 -

But what is artificial intelligence?

Artificial intelligence (AI) is generally understood to be the capacity of a computer to perform a task typically requiring a level of human intelligence. Some types of artificially intelligent systems rely on machine learning, which is when an algorithm is trained on a set of data identifying patterns and forming the basis for prediction.

One of the most influential and ambitious research efforts around artificial intelligence, the Stanford One Hundred Year Study on Artificial Intelligence (AI100) points out that the lack of a precise, universally accepted definition of AI probably has helped the field to grow, blossom, and advance at an ever-accelerating pace.4 The general sense of pursuing a human-like level of processing and perception is enough to drive the field of research and uncover practical applications.5

Artificially intelligent machines have been the focus of science fiction for decades, being cast in a range of roles from villains to heroes, and even as companions or friends but AI has begun the shift from science fiction to reality. Part of this is due to the recent developments in the technology known as deep neural networks (DNN's) and data modelling. This is the process of training an algorithm on existing data to make predictions from that data or about similar data in the future.

Deep neural networks use layers of artificial neurons to create a miniature brain that specialises in performing a particular task. This layered architecture means computer systems can process information and make decisions in similar ways to humans. DNN's tend to excel at very specialised and simple tasks that are repetitive. For example, they are very good at automatically identifying different objects in images. Deep neural networks have revolutionised the fields of computer vision, natural language processing, and data analysis.6

4 Stone et al. One Hundred Year Study on Artificial Intelligence.

5 Eubanks, Artificial Intelligence for HR.

6 LeCun et al., "Deep Learning," 436-444
\- 215 -

Artificially intelligent systems are not just limited to organisations that can develop or outright purchase them; it is also possible to have AI as a service (AIaaS). 'As a service' refers to software that can be used across a network because it uses cloud computing. This approach allows companies to utilise the power of AI and machine learning at significantly lower costs and without having to invest time and developers to create it.7 AIaaS can be a good way for companies to determine if the AI system is the right fit for projects and their organisations, and they can work on their core business at the same time.

Artificial intelligence already spans many industries, ranging from transportation, healthcare, and HR. In Deloitte's 2018 report on Global Human Capital Trends8, 47% of organisations reported investing in automating some tasks, and 40% of respondents are explicitly using AI and robots to perform routine tasks or augment human skills.

Rise of AI which is not AI

It can be hard to identify what is an artificially intelligent system and what is simply automation. Automation is where an algorithm or system follows a rule and artificial intelligence is where systems will develop their own rules to follow. Automation can seem like AI as it can run its task without much input, aside from the initial setup, but cannot do anything outside of this or develop its task to better complete it. AI, however, can develop into a more effective system by creating its own rules relating to the task.

There has also been an uptake in 'pseudo-AI' in recent years. Pseudo-AI is essentially using human employees in place of artificially intelligent systems.9 While this does not scale, it can be helpful for prototyping AI and building the business or service initially. In some instances, the human aspect of it is the initial training for the AI systems10, but in other cases, the AI systems are entirely human workforce based.

7 Kidd, "AI as a Service"

8 Deloitte, Global Capital Trends 2018.

9 Solon, "The rise of 'pseudo-AI'".

10 Scale, "Scale AI".
\- 216 -

AI adoption rate in industry sectors

Figure 1. AI adoption rate of firms within industries, adapted from McKinsey Global Institute: AI adoption and use survey

AI will increasingly impact HR. Fast-paced work, with large variety and magnitude of data, will unavoidably lead to errors or omissions. This is especially true in HR, where employees and candidates are the sources of data. Intelligent AI systems will mitigate these risks, and increase the efficiency of HR teams.

How AI is changing recruitment

Recruitment is undergoing an artificial intelligence revolution driven by an increased focus on finding the best candidates faster, enhancing the candidate experience, and creating measurable business impact. To do this, AI systems are trained on massive data sets of candidate behaviour matched to hiring decisions, work performance and key business outcomes. This training process crystallises human intelligence into systems that support recruiter's decision-making and enables them to focus on more strategic elements of their role.

Improving the candidate experience has been a major focus of HR over the past decade with sourcing, attraction, selection, and onboarding becoming a dynamic interaction between candidates and

\- 217 -

organisations. In fact, 73% of employers' rank candidate experience as a number one priority in the recruitment process11.

Historically, assessments have been designed in a way that makes them easy for people, and then computers, to mark and score. This has generally meant that candidates are forced to answer a series of multiple-choice questions, limiting their responses to one of a few possible responses.

Artificial intelligence is turning this on its head, allowing candidates to respond in a way that is easy for them, and creating computer systems to mark and score the natural responses. This lets candidates respond through speech, video, long-form text, or the creation of work documents and presentations. AI excels at processing these unstructured natural candidate responses. This aids the decision-making capabilities of recruitment teams through rapidly processing of the rich information gathered through these media. Analysis of this data at scale would be time-prohibitive for recruitment teams; thus, AI can unlock insights previously unavailable. Allowing AI to assess the data from a candidate's response allows assessment time to be shortened.

This process enables candidates to confidently share their abilities without being forced to fit into predefined categories.

Finding the best candidates

A recent report by LinkedIn found that 70% of the global workforce is comprised of passive talent who aren't actively job searching but are open to new job opportunities12. AI that is designed to support, rather than replace humans in the process, can help recruiters in engaging with both active and passive candidates, while identifying talent who will be high performers on the job. This enables recruiters to work and hire more effectively, reducing the time to hire significantly. AI helps recruiters to make a more informed decision on their next hire

11 Bersin, "Business of Talent".

12 LinkedIn: Talent Solutions, "Hiring Statistics."
\- 218 -

and puts them in a more strategic position in the recruitment process. AI analysis to existing data assets (such as Talent Pools and past applications) will allow users to understand predictive outcomes.

In their recent Global Human Capital Trends Report,13 Deloitte found that leading companies are recognising that it is critical for AI to be used to augment human decision-making, rather than replacing it. Deloitte stressed the importance of having human oversight of AI systems, to ensure that the AI system is performing optimally. In this way, implementing AI automation can improve the scale, speed and quality of human performance, rather than replace roles.

Supporting candidates

In this new age of HR, candidates are evaluating organisations and their fit as much as organisations are evaluating candidates. Candidates can be supported through their entire journey by intelligent systems that answer questions about the role, their potential team or the benefits of working for your organisation. An enhanced candidate journey also widens the candidate pool so that recruiters can engage with a broader range of candidates, creating diversity in your potential hires.

Using intelligent systems would allow recruiters to improve the way they connect with candidates, leading to improved candidate experiences. A LinkedIn recruiter report14 found that 89% of candidates say being more connected with recruiters would help them accept a job offer faster.

Allowing candidates to share their strengths in a way that makes them feel comfortable helps create positive candidate interactions during the recruitment process. This provides candidates with a smoother experience and enables a more comfortable transition to onboarding once hired.

13 Deloitte, Global Capital Trends 2018.

14 LinkedIn: Talent Solutions, "Hiring Statistics."
\- 219 -

Ensuring a fair process

A key benefit of AI systems is that they are data-driven meaning their performance can be audited by engineers and psychologists, to ensure that they are making decisions that are fair and free of any bias. Like all recruitment processes, it is critical AI systems are fair and free of bias. These systems must be unbiased as biases can have an impact on recruitment, mentoring and promotions. Unconscious bias can introduce unintentional discrimination and result in poor decision-making. Research has shown that a diverse workplace is more effective and performs better15, and bias can be a huge setback in creating a diverse and inclusive workplace.

There are significant risks of not monitoring or correcting for bias. When an algorithm is trained on a data set which contains bias, the algorithm will continue to act and make decisions based on these biases. A relevant example would be teaching a model with existing employees without correction, which could perpetuate existing prejudices or tendencies. This can lead to skewed decisions in recruiting and not hiring the best candidate.

Psychometric science has a long and established history of ensuring the equality and fairness of assessments through an empirical process known as adverse impact analysis. It is important to combine AI with proven psychometric science. This ensures that AI systems are transparent and auditable by professionals, making their equality visible.

The competencies of tomorrow

The skills and abilities that will be important over the next decade have been an area of intense focus for organisations, governments, and special interest groups. By knowing what future skills are needed in the workforce, we can make sure they form part of candidate assessments, enabling businesses to hire for the future. The competencies of the future combine hard and soft skills such as technical ability, complex

15 Hunt et al., Diversity Matters.
\- 220 -

problem solving, and social skills. These can be difficult to measure using traditional assessments but are increasingly being measured through AI-powered assessments.

These softer skills are harder to precisely measure and challenging to do so accurately, but artificially intelligent technology can assist in monitoring and assessing them. AI can gauge responses through methods such as video interviewing, while measuring key competencies and interpersonal skills from their responses. By incorporating AI systems, HR can use their time more efficiently and to greater effect.

The importance of soft competencies

When considering skills and competencies necessary for the future workforce, it is essential to consider how humans can augment computing capability, as well as how artificially intelligent systems can augment human capabilities. Algorithms and artificially intelligent systems are far more effective at data analysis than people are, and therefore different skills will be necessary in a world with greater automation. With the rise of artificially intelligent systems and automation, the type of work that will be required is likely to be high-touch, very personalised and strategic.16 Interpersonal skills are more important than ever, and organisations cannot succeed without employees having these skills. It is essential for HR to develop employees, recruit for the relevant skills and competencies, and deliver organisational change initiatives.

Emotional intelligence and people analytics are required when interacting with people to complete a project. With many companies just monitoring the end result, not the interaction needed to get there, there is a need to focus on how key interpersonal skill capabilities contribute to success17. Industries with a strong requirement for technical skills can no longer get away with a lack of soft skills.

The ability to have some compassion and collaboration in the deck to complement critical thinking and analysis is key. Mike Lombardo

16 Eubanks, Artificial Intelligence for HR.

17 Eubanks, Artificial Intelligence for HR.
\- 221 -

and Rob Eichinger identified core interpersonal competencies that correlated with performance across leadership roles in their Career Flow Research that included conflict management, creativity, motivating others and peer relationships. The factors that have a significant correlation with either being terminated or not being promoted included defensiveness, insensitivity to others and political missteps.18

All of us have these capabilities to a varying degree. Furthermore, everyone has the capacity to grow and develop specific areas. As the uptake of automation and AI systems in the workplace increases, the roles humans will be required to fill are changing. Rather than focusing on the analytical and data processing side of jobs, people will be required to use, and develop, interpersonal soft skills. Regardless of whether someone holds a role as a senior executive or a line manager, these soft skills are continuing to rise in importance.

Figure 2. Skills of the future

18 Lombardo and Eichinger, FYI: For Your Improvement.

\- 222 -

Competencies to focus on are Interpersonal Sensitivity, Teamwork, Building Relationships, Critical Thinking, Self-Insight and Learning Agility.

Interpersonal Sensitivity:

Is sensitive to the needs and emotions of others. Practices perceptive listening; understands non-verbal cues and responds in a calm and empathetic way.

Teamwork:

Supports and collaborates with team members to achieve targets. Appreciates the benefits of diversity, works well with a variety of people, and follows through on team commitments.

Building Relationships:

Warm, confident and approachable. Usually creates a good first impression and puts others at ease. Gets on well with people at all levels, builds rapport both inside and outside the organisation.

Critical Thinking/Evaluation:

Critically analyses even complex information in a logical way. Breaks problems down into smaller components to identify and separate underlying causes. Considers data and theories in decision-making.

Learning Agility:

Picks up new information and concepts quickly, and effectively applies this to solve new problems. Is motivated to understand the theory, analyse data, and uses feedback to expand their skillset.

Self-insight:

Is insightful and recognises own strengths and weaknesses. Thrives on new opportunities for learning and growth and is very responsive to feedback.

The world of work has undergone massive changes over the past decade, and the rate of change is increasing as more businesses utilise new technologies and ways of working. Several reports from governments and focus groups found that over the next decade the following skills will be increasingly important for work:
\- 223 -

Data analysis, interpretation, visualisation, and communication

Verbal and written communication and collaboration

Complex problem solving

Judgment and decision making

Growth mindset and life-long self-directed learning

Business acumen and negotiation

A recent Global Trends report by Deloitte19, which surveyed more than 11,000 HR professionals, found that as technology becomes more central to our work, organisations are increasing their focus on hiring for essential skills like complex problem solving (63%), cognitive ability (55%), and social skills (52%). Hence it is crucial to assess these high demand skills in future talent.

Figure 3. Expected emphasis on workforce skills as AI/robotics are integrated in the enterprise.

A recent Deloitte study reinforces this model where data they gathered over three years from 10,000+ HR professionals that although technology was more available than ever, there was nevertheless a

19 Deloitte, Global Capital Trends.

\- 224 -

significant focus on interpersonal skills, confidence and motivation, critical thinking, and applied innovation and creativity.20

Increasingly, AI systems are being used to allow candidates responses that are more closely related to work tasks. This means that candidates will be presented with assessments that closely simulate on-the-job tasks, allowing them to respond in a way that aligns with relevant work tasks such as designing and delivering presentations, engaging in short conference calls, or drafting work documents.

Hiring Intelligence with Video AI

Traditionally recruiting has had a trade-off between quality of detail and speed. In order to make better hiring decisions recruiters needed to increase the number of assessments for candidates to do, as well as having different interviewers in multiple interviews. With the increase in artificial technology recruiters can process candidates efficiently and gather more accurate data on which to base their decisions.

While assessing job-relevant behaviours is frequently done through assessment centres and personality tests, it can also be done through video interviewing and AI technology. 60% of recruiters21 are using video interviewing, as it offers graduates the opportunity to express themselves while measuring their communication skills and ability to think on their feet. A video interview reduces the staff-time and cost required for setting up conventional phone or in-person interviews, while still allowing you to personalise your questions and time parameters. It ensures consistency across interviews, enabling you to make repeatable, objective hiring decisions.

Video AI utilises the benefits of video interviewing with AI technology to review candidate responses and assess person-job fit. By training the AI algorithm to evaluate and measure candidate video interviews, recruiters can screen candidates efficiently while facilitating self-expression during the interview process.

20 Deloitte, 2018 Deloitte Millennial Survey.

21 Westfall, "Video Interviewing Software".
\- 225 -

Artificial intelligence systems are effective in searching for a more diverse candidate pool, along with supporting candidates during the hiring process. AI also gauges candidate responses, giving candidates a way to naturally demonstrate their abilities, while measuring the competencies of the future in their responses. By incorporating AI, recruiters can use their time in the hiring process strategically and more efficiently.

By implementing artificial intelligence systems into the HR function, recruiters are able to make more informed decisions throughout the hiring process. AI enables recruiters to better support and improve the candidate experience, allowing for better exchanges between prospective talent and recruiters. It reduces bias and creates predictive analytics to provide more insight into the organisation and its candidates. By getting the predictive information you need at the beginning of the hiring process, you can greatly decrease time to hire without sacrificing quality. Talegent leverages AI to evaluate recorded video interviews with validity, consistency, and objectivity. AI-driven predictions provide valuable decision support to human recruiters and hiring managers.

AI is the future of business intelligence and enables business analytics to be used by those without in-depth technical knowledge about data. AI is increasingly being used in the predictive analytics space, providing clients with more impactful and meaningful reporting. For data that is collected from an organisation, AI is able to identify any trends, and enable future actions to be taken based on these. Predictive analytics provides organisations with the ability to identify employees who are likely to be high performing leaders, or achieve targets, while being less likely to resign. Artificial intelligence provides predictions, and human intelligence provides context and strategy. Together, they make great hiring decisions.
\- 226 -

Key Points

Artificial intelligence lets candidates respond in a variety of unstructured, natural ways.

AI supports recruiter's decision-making and enables them to focus on more strategic elements of their role.

A key benefit of AI systems is that they are data driven meaning their performance can be audited by engineers and psychologists, to ensure that they are making decisions that are fair and free of any bias.

Five key areas of skills to develop are: Interpersonal Sensitivity, Teamwork, Building Relationships, Critical Thinking, Self-Insight and Learning Agility.
\- 227 -

Bersin, Josh. 2016. "Business of Talent."

Deloitte . 2018. 2018 Deloitte Millennial Survey . Survey Report, Deloitte .

Deloitte. 2018. "2018 Global Capital Trends." Accessed 06 10, 2019. https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2018/ai-robotics-intelligent-machines.html..html

Eubanks, Ben. 2018. Artificial Intelligence for HR: Use AI to Support and Devlope a Successful Workforce. Kogan Page Publishers.

Hunt, Vivian, Dennis Layton, and Sara Prince. 2014. Diversity Matters. Re-search Report, McKinsey & Company.

IDC. 2019. Data Growth, Business Opportunities, and the IT Imperatives. 06 10. https://www.emc.com/leadership/digital-universe/2014iview/execu-tive-summary.htm

Kidd, Chrissy. 2018. AI as a Service? AIaaS Explained. 04 25. Accessed 08 02, 2019. https://www.bmc.com/blogs/ai-as-a-service-aiaas/

LeCun, Yann, Yoshua Bengio, and Geoffrey Hinton. 2015. "Deep Learning." Nature: International Journal of Science, 521 436-444.

LinkedIn: Talent Solutions. 2019. "Hiring Statistics." LinkedIn Business. 06 10. https://business.linkedin.com/content/dam/business/talent-solutions/global/en_us/c/pdfs/Ultimate-List-of-Hiring-Stats-v02.04.pdf

Lombardo, Micheal, and Robert Eichinger. 2006. FYI: For Your Improvement, A Guide for Development and Coaching. Lominger Ltd Inc.

Marr, Bernard. 2018. How Much Data Do We Create Every Day? The Mind-Blowing Stats Everyone Should Read. 04 21. Accessed 06 10, 2019. https://www.forbes.com/sites/bernardmarr/2018/05/21/how-much-da-ta-do-we-create-every-day-the-mind-blowing-stats-everyone-should-read/#6d9ad4df60ba

Reinsel, David, John Gantz, and John Rydning. 2018. Data Age 2025 Whitepa-per. Whitepaper, IDC.

Scale. 2019. Scale AI. Accessed 8 2, 2019. https://www.scaleapi.com/

Solon, Olivia. 2018. The Rise of 'Pseudo-AI': How Tech Firms Quietly Use Humans to do Bots' Work. 6 6. Accessed 08 1, 2019. https://www.theguardian.com/technology/2018/jul/06/artificial-intelligence-ai-hu-mans-bots-tech-companies

Stone, Peter, R. Brooks, E. Brynjolfsson, R. Calo, O. Etzioni, G. Hager, J. Hirschberg, et al. 2016. One Hundred Year Study on Artificial Intelligence: Artificial Intelligence and Life in 2030. Report of the 2015-2016 Study Pan-el, Stanford, CA: Stanford University.

Westfall, Brian. 2015. Video Interviewing Software. 1 8. Accessed 06 18, 2019. https://www.softwareadvice.com/hr/industryview/video-interview-re-port-2015/

CHAPTER TWELVE: REFERENCES
\- 228 -
\- 229 -

John is an international thought leader in the application of big data, design and video in developing selection systems to enable organisations to source, screen and identify the best talent.

As CEO of Talegent, he has a proven record of establishing, leading, growing and integrating successful cloud-based Talent Measurement solutions. He had previously held positions in senior executive roles at SHL, PreVisor and Talent Technologies, in Australasia, North America, UK and Europe.

Richard ensures Talegent products deliver pragmatic solutions to fortune 500 companies all over the world. He is an expert in ideating and implementing assessment innovations including gamification and machine learning, and their use to tackle recruitment challenges of the future. Richard realises Talegent's success by working closely with engineers, designers, data analysts to understand clients' needs and define the future of Talegent products with a constant eye on user experience.

Behind the Book

John Austin

Author

Richard Thwaite

Co-author

\- 230 -

Sacha is responsible for coordinating and developing marketing strategies, as well as creating content for Talegent and for clients to assist with recruitment and improving their candidate experiences. She produces premium content pieces, such as blogs, articles, and eBooks, to educate and inform clients, candidates and industry-specific professionals.

Beth is the creator of innovative and award-winning talent assessment solutions at Talegent. She leads a team of IO psychology experts, designs selection solutions, and undertakes market and scientific research related to innovations in data analytics and candidate experience. She heads Talegent's Consulting team in the specification of client needs to develop solutions that meet and exceed their expectations. Beth is a speaker at international industry events, sharing research and best practice findings together with innovations underway with product management and development.

Sacha Baillie

Co-author

Beth Sketcher

Editor
\- 231 -

As great candidate experience has become essential to the recruitment process, so too has design. Talegent's lead designer Milly manages our creative team to understand and design the candidate and recruiter experiences. She works with the design team in creating and upholding digital style guidelines to ensure a consistent, accurate and inspiring online presence.

Milly Jennings

Designer

Jerry works to fully incorporate our belief that design is a key part of the recruitment process for both candidates and recruiters. He works closely with Milly to ensure that recruiters and candidates have a great experience while getting the information they need. Jerry works alongside Talegent's engineers, data analysts, and sales teams to understand candidate needs and present Talegent in the best way.

Jerry Wang

Designer

## Contents

  1. Introduction
  2. Competency Models
  3. Values
  4. Fairness & Diversity
  5. Selection Methods
  6. Candidate Experience
  7. Assessment Centres
  8. Personality & Ability Assessment
  9. Graduate Recruitment
  10. Emotional Intelligence
  11. Grit
  12. People Analytics
  13. Artificial Intelligence
  14. Behind the Book

## PageList

  1. 
  2. 
  3. 
  4. 
  5. 
  6. 
  7. 
  8. 
  9. 
  10. 
  11. 
  12. 
  13. 
  14. 
  15. 
  16. 
  17. 
  18. 
  19. 
  20. 
  21. 
  22. 
  23. 
  24. 
  25. 
  26. 
  27. 
  28. 
  29. 
  30. 
  31. 
  32. 
  33. 
  34. 
  35. 
  36. 
  37. 
  38. 
  39. 
  40. 
  41. 
  42. 
  43. 
  44. 
  45. 
  46. 
  47. 
  48. 
  49. 
  50. 
  51. 
  52. 
  53. 
  54. 
  55. 
  56. 
  57. 
  58. 
  59. 
  60. 
  61. 
  62. 
  63. 
  64. 
  65. 
  66. 
  67. 
  68. 
  69. 
  70. 
  71. 
  72. 
  73. 
  74. 
  75. 
  76. 
  77. 
  78. 
  79. 
  80. 
  81. 
  82. 
  83. 
  84. 
  85. 
  86. 
  87. 
  88. 
  89. 
  90. 
  91. 
  92. 
  93. 
  94. 
  95. 
  96. 
  97. 
  98. 
  99. 
  100. 
  101. 
  102. 
  103. 
  104. 
  105. 
  106. 
  107. 
  108. 
  109. 
  110. 
  111. 
  112. 
  113. 
  114. 
  115. 
  116. 
  117. 
  118. 
  119. 
  120. 
  121. 
  122. 
  123. 
  124. 
  125. 
  126. 
  127. 
  128. 
  129. 
  130. 
  131. 
  132. 
  133. 
  134. 
  135. 
  136. 
  137. 
  138. 
  139. 
  140. 
  141. 
  142. 
  143. 
  144. 
  145. 
  146. 
  147. 
  148. 
  149. 
  150. 
  151. 
  152. 
  153. 
  154. 
  155. 
  156. 
  157. 
  158. 
  159. 
  160. 
  161. 
  162. 
  163. 
  164. 
  165. 
  166. 
  167. 
  168. 
  169. 
  170. 
  171. 
  172. 
  173. 
  174. 
  175. 
  176. 
  177. 
  178. 
  179. 
  180. 
  181. 
  182. 
  183. 
  184. 
  185. 
  186. 
  187. 
  188. 
  189. 
  190. 
  191. 
  192. 
  193. 
  194. 
  195. 
  196. 
  197. 
  198. 
  199. 
  200. 
  201. 
  202. 
  203. 
  204. 
  205. 
  206. 
  207. 
  208. 
  209. 
  210. 
  211. 
  212. 
  213. 
  214. 
  215. 
  216. 
  217. 
  218. 
  219. 
  220. 
  221. 
  222. 
  223. 
  224. 
  225. 
  226. 
  227. 
  228. 
  229. 
  230. 
  231. 
  232. 
  233. 
  234. 
  235. 
  236. 
  237. 
  238.

## Landmarks

  1. Table of Contents

