Reducing Early Hire Failure – Learning to Make Better Hiring Decisions
This medium-sized hotel sits on the banks of a beautiful river in a metro area of about 350,000 people. It has enjoyed its reputation as the leader in its market for over 15 years, and incorporates a fine dining restaurant, a wide choice of room types, and extensive meeting and banquet facilities. It maintains a good relationship with the nearby university and major local manufacturers, who regularly lodge their guests and hold their meetings in the hotel. The hotel just completed a multi-million dollar renovation.
Unfortunately, the people side of the operation was a bit more troublesome than would be apparent to a casual observer, with a one-year new-hire failure rate in excess of 85%; 74% of new hires failed in less than 6 months—in fact, over 50% were leaving voluntarily or being fired in less than 60 days!
In consultation with Performance Resources, management decided to implement a pre-hire honesty-integrity assessment, hoping to reduce the wasted time, energy, and decline in service associated with the revolving door of new hires. Using the assessment report to guide the interview process, the hiring team would occasionally decide to hire someone whose patterns of scores was in the low range, usually offset by a good reference from a previous employer, or a personal relationship with someone employed by the hotel.
The data from the first year of assessment use was carefully analyzed; The early hire failure rate had dropped to 62%, and the 6-month failure rate declined to 50%. While this was a significant improvement, management felt that better results could be attained. Based on the data, a criterion for hiring was established: To be considered for hire, an applicant could not have any two scale scores below 4 on the assessment’s 9-point scale. History showed that an applicant who fell below that criterion was 40% more likely to fail than an applicant above that level. The graph below shows the 3 years of data. Combining the use of a criterion scoring approach with the SOS interview tools, the hotel reduced new hire failures to 26%, (well below the industry average) with virtually all of those in the first 6 months of employment.
An analysis of the new data (2 full years of assessment use, compared with the year before implementing assessment) showed another adjustment of the criterion could be accomplished within the limits of the applicant pool, (still allowing the hotel to fill jobs as necessary.) This new criterion (no single score below 4) has further reduced the 6- month new hire failure rate, to just under 19%.
Cost-benefit ratios for the assessment program are now about 1:58, and improving!
