Employers

Here is a true story. My dentist did a "clinical" evaluation of my teeth. That is his fancy way to say he looked in my mouth and stared at my teeth with his own two eyes. He found no cavities in his "clinical" evaluation. I felt happy and relieved!

But then he took a quick x-ray. Lo-&-behold, the x-ray immediately spotted a cavity hiding behind one of my fillings!!

In other words, what you see is not always what you get!!! An objective x-ray found a lot more important information than a highly trained eye.

Likewise, some applicants seem fine in a job interview. But, they then proceed to flop after you put them on the payroll. In fact, huge amounts of research prove most interviewers poorly predict how an applicant will perform if hired.

So, it is crucial for a manager to use special "x-rays" to spot potential trouble lurking within an applicant—and also uncover skills and talents that will prove beneficial on-the-job. Here are five superb "x-ray" methods you can use immediately to help you hire high-achievers—and stay away from underachievers.

1. Pre-Employment Tests

Research shows that customized tests are the best way to accurately predict on-the-job performance. You can use three types of tests:

• Behavior tests—to evaluate interpersonal skills, personality, and motivations
• Abilities tests—to predict brainpower in problem-solving, vocabulary, arithmetic, grammar, and handling small details
• Character tests—to detect a "bad apple" who has a bad work ethic or might steal

Tests can be given in paper-&-pencil test booklets or on the Internet. Importantly, only use tests designed for pre-employment assessments.

Customize tests you use by doing a "benchmarking study" to find out how your highly productive, low-turnover employees typically score. Then, you can quickly compare applicants' test scores against scores of your most productive employees. Of course, you can show preference for applicants who score like your winners.

2. Remember One Truism

When I deliver my speech or seminar on Hire the Best—& Avoid the Rest™, I always point out: Whatever behavior you see from the applicant during the screening process is likely to be the very best behavior you will ever see from that person! Surely you have witnessed this truism.

Let's say you want to hire a high-energy person. Candidate A stays very high-energy during your entire screening process, including all in-depth interviews. Candidate B starts interviews high-energy (a good sign) but then acts increasingly drained as the interviews go on (a bad sign). Candidate A is much more likely to be high-energy on-the-job than Candidate B. Do not expect Candidate B to suddenly explode with energy if you hire that person.

3. Referrals from Your Best Employees

Winners hang around with winners. Losers hang around with losers. Your best employees probably hang around with high-achievers. Ask those employees to refer applicants.

4. Bio-data

I'm not referring to DNA. Instead, bio-data is biographical data. Here's how to benefit from bio-data. Grab the files on your superstar employees. Look for common work-related experiences or education that most of them have.

For example, one company I consulted wanted to hire salespeople to sell a service (not a product). Upon examining bio-data of the company's superstar salespeople, we found the high-achieving salespeople had worked selling services. Most of the company's underachieving salespeople worked in sales, also. But, the underachievers sold products, not services.

Interestingly, the same company also discovered most of its superstar salespeople worked at McDonald's for six months or longer in high school or college. This showed an interest in serving customers (after all, that is what McDonald's stresses) plus stick-to-itiveness (lasting six months or more in a normally high-turnover job). So, start digging into your bio-data treasures located in employees' files.

5. RJP

RJP stands for realistic job preview. To do an RJP, (a) show applicants exactly what they will do on-the-job if you hire them, (b) let applicants think about it for 24 hours, and (c) then ask applicants if they want to take the job. Research shows employers who give detailed RJPs get two results:

• less employees accept the job offer
• applicants who accept the job offer are less likely to turnover

Importantly, an RJP needs to be super-realistic. For example, I consulted a tire company that had great difficulty getting people to work in "purgatory"—a horribly hot room in which hot, just-made tires were moved on the tire molds. Anyone who worked in the "purgatory" room spent all day covered in sweat and thick white dust. No wonder most people quit that job after a short time!

I recommended using RJPs. The company worried, "Applicants won't take the job if they know too much about it!" I said let's try RJP anyway. Sure enough, after seeing this awfully hot and dusty job, only a small percentage of applicants took the job. But, those who did stayed a long time.

Do It Now

If you remember these points, you can hire the best—and profit from it:

• what you see is not what you get—but it is the best you will see
• use customized tests, since tests predict job success better than other methods
• take advantage of predictors right under your nose, including referrals from winners, bio-data, and RJPs

Importantly, you can start these valuable methods today so you immediately start hiring the best.

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© Copyright 2001 Michael Mercer, Ph.D.

"We got the Helix job!"

Keith Radford, partner in a mid-sized technology provider, jumped up and exuberantly punched the air, "Whoo! Awright!" He turned to his partner Mike smiling, "Which parts?"

Wide eyed, Mike said quietly, "We got the whole thing."

Keith slumped down into his chair. "The whole thing?! The whole thing?! Mike, we don’t have the resources to do it all. They need application and server development, mainframe support, systems analysis, architecture...they’re even looking for web development! Most of our people are tied up on other jobs right now! Whoever thought we’d get the whole thing? What’re we gonna do?"

Mike swiveled in his chair, opened his top desk drawer and began rummaging through its contents... "Remember that guy we met with a few weeks ago...from that technical staffing company?"

"Yeah. What? You’re thinking contract hiring? We can’t afford that."

Mike pulled out the business card he’d been looking for... "I thought so too. Our business had leveled off...we didn’t have much new on the horizon, our staffing and business needs didn’t call for contract employees. But maybe now things are different."

Keith stood up and began to pace, "I dunno. Maybe we should just start on recruitment... run some ads...make some calls...I know a couple of guys..."

"We don’t have much time, Keith. Do you remember how long it took us to bring in our last programmer? While we can get a flood of resumes in here, good techs are still hard to find. And besides, what are we gonna do with these people when the job is over? This is only an eight month project."

Keith nodded. "Yeah, I know, I know. But I feel a little leery about bringing in a bunch of strangers to join our team. Who knows what they could pick up...who’s to say they wouldn’t go to work for one of our competitors next, and pass along our methods... and our contacts?"

"C’mon, listen to yourself, Keith. These contractors are pros. They wouldn’t last long in the field if they were in the habit of stealing information from their clients. It’s not in their interest to do that. And y’know, I think a few of our younger people could benefit from working with guys who have been around. They could probably learn a few things. And when the job is done, the contract workers are off our books. The initial extra expense of contract hiring is easily offset, in this case, by the payoff from getting really experienced people with the technical skills we need in here fast...when we need ‘em. It’s a win-win."

Keith nodded. "Let’s make the call."

Contract or Direct?

The popularity of contract staffing has grown dramatically in the last decade as the "just-in-time" way of doing business, particularly in the technical arena, has created new strains on competitive service delivery. For many businesses, contract hiring is an effective strategy for controlling costs and payroll obligations, managing risk, and accessing advanced skills for a specific project need that would otherwise be difficult, expensive, and time-consuming to bring on board.

Is contract staffing the perfect solution for every must-hire situation? No. Each business must always weigh its short and long-term needs, its available financial and human resources, and the demands of the marketplace. What makes sense in one situation may not be advisable in another.

Generally, bringing in contract professionals makes sense when:

• • organizational capacity is strained
• • time demands are tight for project deliverables
• • projects are of limited duration
• • specialized expertise is needed on an interim basis
• • project managers lack the time for a full-scale recruiting effort
• • project talent cannot be easily located

Let’s face it, it takes time to hire talented, competent people. Many organizations have found that contract staffing offers a high level of flexibility and response time that’s difficult to replicate through the more traditional direct hiring route. Projects with high technical skill demands coupled with relatively short life spans lend themselves ideally to this type of response. In this situation, the client informs the staffing provider of his needs and timeframes, and the contractor then manages the personnel functions of hiring, oversight, performance evaluation, and overall coordination of the contract staff. This approach frees project leaders from the demands of ramping up staff levels and allows the client’s management team to focus more intently on project deliverables.

There is a substantial bottom-line cost affixed to recruitment/hiring, orientation, and training new staff. That payout is not always added into the expense of wages, benefits, severance (as needed) and overall personnel administration when comparing contract and direct hiring.

No One Size Fits All

There isn’t any formula for making the call as to when to use contract hiring services. In the case of Keith and Mike, they needed to quickly bring on a number of highly skilled technical staff to help in planning, designing, and implementing a large project with a demanding timeline. For them, hiring contract staff allowed them to accept a major contract that otherwise, they might not have been able to manage.

In today’s fast paced and highly competitive marketplace, the most effective businesses always pay close attention to their options, especially when it comes to workforce management. Contract or direct? It depends...what are your needs, when are your needs, what alternatives are available to satisfy those needs, and does anyone really have the time or inclination to manage recruiting in-house? Just pick the option that most cost-effectively helps you get the work done!

The information contained in this article is intended to provide useful information, but it should not be construed as legal advice. For specific legal requirements regarding co-employment and the use of temporary employees, please consult your attorney.

Introduction

Contingent staffing, outsourcing, behavioral hiring. All have become commonly used buzz-words among human resource and staffing industry professionals. While the terms refer to different activities, their intent is the same: gain competitive advantage by implementing new tactics and strategies in the hiring and use of labor. If you are familiar with the current trends in staffing, that's great. If your organization is benefiting from their implementation, that's even better. If you are interested in learning more about current strategies and tactics in staffing, read on. This article outlines several popular staffing trends and provides an introduction to their use.

Contingent Work Force

Call it downsizing, rightsizing or a layoff. Companies throughout the 90's have been trimming their staffs to eliminate waste and focus on their strengths. These cuts have led to the development of the contingent work force - the people who are called in on a short-term or project basis. While using temporary help is certainly not a new concept, incorporating staffing as a part of an organization's competitive strategy is.

Companies are turning to contingent workers for a variety of needs. The idea driving this trend is simple: bring in people to meet the demand for labor or expertise only when those people are needed. Companies executing this strategy are able to reduce fixed expenses by maintaining a smaller direct (or permanent) staff. When work loads increase, they are able to bring in top quality temporary workers using a human version of a just-in-time inventory system. As an added benefit, the cost of a contingent worker is often lower than that of a full-time employees due to the elimination of benefit expenses.

Today's contingent work force crosses all lines of business and areas of functional responsibility. While temporary help used to be thought of as clerical support, the term has now come to encompass industrial, engineering, information technology and professional positions. In many parts of the country, the fastest-growing category of temporary workers are interim executives - from marketing and financial experts right up through CEOs. The following are the major staffing trends associated with the contingent work force.

Supplemental Help	Fill-in for short-term demand such as a vacation or special projects. Using supplemental help allows existing staff to focus on more pressing business. It frees them from time-consuming tasks that disturb work flow and do not add much value.
Variable Capacity Staffing	Strategic use of temporaries to accommodate workloads which are known to vary in seasons or other cycles. This results in consistency between the amount of work to be done and the available number of employees, keeping direct employees working at peak effectiveness. In some instances, employers have actually developed a shared work force that rotates from one business to another to accommodate each company's unique seasonal needs.
Vendor-on-Premises	The temporary help supplier provides an on-site coordinator for temporary employees at a client company. Typically, these arrangements are made by large volume staffing users to simplify coordination and increase both productivity and quality across a variety of departments or functions.
Facilities Staffing	The temporary help supplier assumes responsibility for staffing certain jobs or departments with disproportionately high turnover, driven by routine or mundane work. Employees are "rotated" into and out of these positions based upon productivity. As a result, performance and quality increase, while the employer's liability and headaches are reduced.

Hiring Options

The demand for good people is certainly not something new. Business executives commonly complain about the difficulty in finding and hiring producers. To handle this difficulty, many people are taking new approaches to making the hiring decision. An overview of two major tactics being used by hiring authorities follows.

Behavioral Hiring

Have you ever selected a job candidate based almost solely on that person's past work experience? Have you ever ignored a nagging doubt about a job prospect's attitude or personality, hired and later regretted your decision?

According to Ed Ryan, President of MPR Consulting, companies put too much emphasis on education and experience while neglecting two attributes he says earmark a successful candidate: behavioral traits and chemistry.

When filling a position, managers often prepare a description detailing the duties of the job. Unfortunately most people stop here. Missing is a description of the types of behaviors necessary to successfully execute these duties - a behavioral traits profile. To develop a behavioral traits profile for an available job, you must identify the company's top performers in that position. Ask yourself: "What makes these people so good?" The answers will help you uncover the behavioral traits necessary to succeed in this position.

Once a profile of the ideal job candidate has been prepared (and all the traits necessary for success have been identified), the hiring process can begin. Following a behavioral hiring methodology, every candidate must be put through a structured interview. The standard interview questions are designed to determine if a candidate possesses the desired personality traits. Those individuals having the right attitude and behaviors then undergo a review of skills and experience.

The next time you have a need to hire you may wish to consider the importance of behavioral traits and chemistry as well as experience in your hiring process. If you are not sure how to implement behavioral hiring, contact a staffing service or industrial psychologist who is.

A partial list of traits:

Intensity	Very high stamina, endurance and a high level of work orientation.
Values Risk Avoidance	A solid ethical system, refuses to cut corners or over-promise. Acts responsibly, avoids breaking rules.
Stress Tolerance	Manages stress well.
Focus of Control	Level of responsibility a person takes for his job and his actions.
Independence	Ability to work well with minimal supervision.
Optimism	Positive outlook on situations, ability to learn from mistakes and move on.
Leadership	Skilled at directing and leading others.

Temp-to-Direct Hire

Temp-to-perm enables companies to test an employee on-the-job before committing to direct employment. This trend has become popular because it alleviates some of an employer's fears of making an incorrect hiring decision.

This strategy is an excellent way to lower the risk associated with the hiring decision. On the downside, however, many of the best applicants for a given job opening may be currently employed. These people are rarely willing to leave their current job for a temporary position even when the opportunity for permanent employment exists.

Professional Employment Organizations (PEOs)

Employee Leasing

Employee leasing is a service provided by a PEO or Professional Employer Organization. According to the National Association of Professional Employer Organizations, a PEO is a company that provides "integrated business services which more cost effectively manage critical human resource responsibilities and employer risks for its clients." More simply put, a PEO firm takes over the responsibility for a significant portion of the employer's functions for the workers assigned to their clients. The PEO firm contractually assumes the employer rights, responsibilities and risks. Included in those rights and responsibilities are the payroll processing, tax withholding, worker's compensation insurance, employer's share of social security tax, unemployment tax and benefits provision and administration for the leased employees.

Payrolling

Payrolling is a service offered by most temporary staffing services. Unlike leasing, which is a relatively new industry, payrolling has been around for a long time. In many respects, employee payrolling is like employee leasing. The mechanics are almost identical - a current employee is placed on the payroll of another firm. The payrolling firm is responsible for the payroll processing and administration including creating the paycheck, handling the statutories and governmental reporting, and supplying unemployment compensation. One major difference between payrolling and leasing is that most payrolled workers do not receive medical benefits. What most often differentiates payrolling from employee leasing is the scope of the agreement. Payrolling is frequently a project-based service used for temporary and other short- to medium-term personnel requirements. Leasing, in contrast, is designed to be used as a permanent solution to payroll and benefit administration needs. The question facing employers is: Why use either service?

A number of forces in the marketplace cause companies of all sizes to look at alternative staffing arrangements such as employee leasing and payrolling. One such force is the increasing regulatory burden of being an employer. Government reporting, compliance and administration are consuming an ever-increasing share of businesses' time and resources. At the same time, these organizations are being forced to "do more with less" due to increasing global competition and decreasing product life cycles.

Is employee leasing or employee payrolling right for you? It depends on what your company is trying to accomplish. Both services increase productivity and reduce risk.

Payrolling and employee leasing eliminate the paperwork, reporting and administrative burden of human resource management. For many small to medium-sized companies, these services provide key managers the freedom to focus on those activities which are most critical to the success of their businesses.

Employee leasing or payrolling may provide your firm with solutions to the headaches of personnel selection and administration.

Outsourcing

Outsourcing has become a popular cost-effective method to manage non-essential functions while maintaining focus on the company's core competencies. What is outsourcing? Simply put, outsourcing is having an outside company take over some function of your business. Some business functions have always been outsourced. Accountants, attorneys and consultants are essentially providing outsourced services. The difference now is that companies are taking a hard look at their business, and determining which functions are most critical to their success. All the non-critical activities are then turned over to an outside provider (or providers) who can perform the function either at lower cost or with greater productivity.

Many market forces continue to drive the need for outsourcing:

1. Accelerating technology has provided new product and systems capability. Taking advantage of this phenomenon, however, requires ever-increasing levels of understanding and expertise.
2. Heightened customer expectations in areas of quality, service and price performance have required increased attention to detail.
3. Declining product and service life cycles and an increasing need for customization has produced a myriad of added headaches for business.
4. Globalization has created new challenges as well as new markets and new economic rules.

In short, competition and a changing marketplace are squeezing business from all sides. Companies must spend more time concentrating on the specific products or services they represent. They must reduce costs, reduce head count, flatten the organization, and redirect and focus management to increase profitability.

Outsourcing offers one way to reduce management involvement by eliminating specific administrative activities. The outsourcing partnership between company and service provider can:

1. Reduce the cost and hassle of labor-intensive activities. For example, telemarketing may be an important part of a company's marketing strategy; however, it is a type of work that is plagued by high turnover. Rather than suffer the expense, aggravation and morale problems that can result from frequent turnover, this function could be successfully outsourced to a company that specializes in recruiting and training. The service provider should be better equipped to deal with the turnover and will take away the administrative burden of the HR functions.
2. Lead to improved performance in areas impacted by improved technology. A service provider like EDS in information technology or MCI in telecommunications has state-of-the-art expertise in the hardware and software needed to enhance a company's technological operations. For many small to mid-sized companies, technology investments can be cost prohibitive. Through outsourcing, the costs of technology are shared with the other users of the service provider. Even for larger companies, the service provider's expertise with the technology helps assure greater efficiency.
3. Add extra value through a risk-sharing relationship. For instance, outsourcing a mail room off-site might allow the service provider to run multiple shifts using existing equipment. By selling mail room services to other firms in need, the outsourcing provider can turn this support function into a profit center. The risk and the reward may be shared through a partnership or strategic alliance between the outsourcer and the service provider.

To determine if outsourcing is a viable alternative for your company, you must create a well-defined plan. Conduct an internal assessment to define your firm's core functions. In doing so, you may discover non-core functions which are appropriate for outsourcing.

If you discover areas to be outsourced, the next step is to determine what service providers offer the expertise you require. In selecting a service provider, you are choosing a partner for your company. Be very selective! Find a partner with experience, traits and chemistry that blend well with your company. Interview and reference check all candidates to insure that the provider can do the jobs and will provide the level of service you want.