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Automated Analytics and the Hiring Process: Big Data Comes to HR

September 20, 2016, 07:00 AM

Metrics are transforming the business world.

Data is truly everywhere and is being automated and leveraged by functional departments in amazing ways. Leading-edge marketing departments can now track campaign performance, best-in-class accounting departments can track financial trends and top-performing sales departments can track leads, opportunities and closed deals.

The use of metrics has even grown to include traditional back-office tasks such as the human resources function, which in recent years has been evolving before our eyes.

For example, we have a limited human resource function between our companies, which total approximately 175 employees. But to make things more complex for the HR staff, our combined operations include an equipment leasing company, an IT consulting firm, an e-commerce business and a CPA firm.

About four years ago the IT consulting firm decided to open an office in India to expand our application development team. As a means of testing the hiring market, we chose to run an inexpensive ad on a well-known job board in that country for 30 days. The job posting only cost us $49 but within the first two weeks we had to remove the ad because we had already received over 5,000 resumes and had no idea how we were going to handle them with our tiny two-person human resources department.

At first we tried to find a third-party solution that would help us sort through the resumes in an organized and efficient way. But it quickly became apparent that, in order to fully leverage our unique business logic accumulated over the years, we would have to build our own application. Luckily, being in the business process automation field, this was a task that we could well handle.

Building an Automated Tool
First of all, we decided that the only way to review, rank and sort this amount of data would be to build an online career portal and underlying database. This would automatically walk applicants through a rather lengthy series of questions and online assessment tests as part of the application process.

Our goal was to take what was once a very manual, human-driven process — reviewing and screening resumes, conducting telephone interviews, setting up appointments and manually administering tests in person — and accomplish these tasks quickly and easily with the help of digital tools. This automated system would help us source, sort, assess and rank thousands of candidates with a level of precision and throughput that would have otherwise been impossible, even with a team of hundreds of HR professionals.

The first version of our online career portal took an average applicant about an hour to complete and included tests on simple math, clerical efficiency, typing, vocabulary, word matching and job specific knowledge. The automated platform also required the candidate to answer other questions that allowed our underlying program logic to calculate the candidate’s average length of employment, location fit, school ranking, degree fit, total candidate score and more.

Once our system was up and running we posted another ad on the job boards in India and the online assessments started pouring in.

Within the first couple of months, and after receiving thousands more online candidate assessments, it became readily apparent which applicants were more desirable than others based on their test performance. We began ranking the individual assessment scores by percentiles so at a glance we could compare each candidate to his peers on the various assessments and metrics. Today we rank candidate scores ranging from a low of negative 23 to a high of positive 23, and we do not even consider a candidate until his or her score reaches a minimum of 6, which excludes at least 75% of the total applicants.

The improvements to our hiring platform did not stop there:

  • Color Coding: Today we color code the score fields on our results pages, highlighting the highest percentile scores in green and the lowest percentile score fields in red. This ensures that each candidate’s strengths and weaknesses are prominently displayed, and from a visual standpoint easily noticed by the reviewer.
  • Additional Metrics: We also added a common sense test, an emotional IQ test, a SAT/ACT versus GPA deviation calculation, automated reference emails and a series of questions to determine how motivated the candidate might be.
  • Motivation Scoring: With regard to the objective parts of our assessment, we knew from experience that doing well on objective tests is not always a predictor of how effective a candidate might be in the workplace. With that in mind, we added a series of questions to our online application that would give us an indication of whether a candidate was driven and/or motivated. For each question answered positively the candidate receives a point towards a motivation score, starting at a low score of negative two and going as high as a positive score of 14. Some of the questions for which a candidate can earn a point towards the motivation score include: Did you earn an advanced degree, additional certifications, hold a leadership position, complete an internship, participate in extracurricular activities, perform volunteer work, receive any awards, work while in college, etc?

Today our online application requires as much as two hours to complete, but I dare to say that at this point, by using the automated metrics provided by our hiring platform, a ten-year-old, after ten minutes of instruction, might be capable of making a better hiring decision than many HR professionals. 

Applicable to Many Different Jobs
What started out as a solution to screen thousands of application developer candidates for a fledgling office in India turned out to be just as powerful for hiring for our U.S. operations.

Our first U.S. initiative using the hiring platform was to hire ten new accountants, over the course of a year, to support a merger and recent expansion. An ad was placed on job boards in our area and about 200 candidates completed the assessments, after which we hired ten sparkling new graduates. Fortunately, most all of the new hires are all still with us and are doing quite well.

However, realizing that we could leverage the platform to hire for any position in our companies — including accounting, finance, sales, marketing, graphic design and more — required our teams to develop job-specific assessment tests for each of the functional areas and job types in our company.

Of course, we do realize that everything in the hiring process cannot, nor is advisable to be, automated. But it never fails to amaze me how much of what used to be impossible can now be accomplished with business process automation and the use of analytics. 

For example, someone in our HR department currently administers English fluency tests over the phone despite the fact that there are companies that provide this service as a digital solution with no human interaction. Out HR department also manually performs background and credit checks on applicants even though these types of services can now be automated. With this being said — and with the exception of steps that require the candidate, manager or HR professional’s presence, such as in the interview process, human judgment or for a drug test — I really believe that the possibilities are limitless.

A Simplified Process
As of the time of this writing, our organization has accumulated more than 60,000 candidate assessments for a variety of positions and additional assessments continue to arrive daily. Each day we receive dozens of automated emails for candidates whose scores are summarized, color-coded and scored on one page. These easy to read email assessments are directed to the HR department as well as interested managers/decision makers in the related functional area. Programming is in place so that only candidates in the top quartile or above a certain score are considered, at which point they are automatically forwarded to HR and the appropriate managers/decision makers. It takes us less than two minutes to review and evaluate a positive assessment that exceeds the minimum score to decide on next steps.

All past candidate data is stored in a database where it can be easily searched, sorted, ranked and queried by hundreds of variables.

As we continue to tweak, improve, stabilize and adjust this hiring platform, it is clear to see that the automation of our HR function has saved us an incredible amount of time and effort as well as improved the quality of information and decision making with regard to the hiring process. What we can now accomplish with a small HR department would never have been possible without business process automation and the use of analytics.

Samuel N. Oliva, CPA, CMA, CLFP
CEO & Shareholder | ECS Financial Services
Samuel Oliva, CPA, CMA and CLFP is the founder and CEO of Beacon Funding Corporation an equipment leasing company for the past 26 years. Simultaneously, Oliva has also serves as the Managing Partner of ECS Financial Services, a CPA firm specializing the equipment leasing industry for the past 39 years.

Oliva graduated from Western Illinois University Magna Cum Laude with degree in accounting and has an MBA from the University of Chicago where he also graduated with highest honors. He has served on various boards including for the BMO Harris Bank, The University of Chicago Executive Program, Western Illinois University Board of Directors and the North Suburban YMCA .

Oliva is the previous recipient of Financial Executive of the Year, Entrepreneur of the Year and Distinguished Alumni awards. Oliva founded and runs several other successful companies including Liventus Technology an IT consultancy, Cornerstone Realty a Real Estate holding company and, an e-commerce website. Oliva’s combined entities started in 1978 with two employees now employ over 170 people including an IT Consultancy office in Bangalore, India. Oliva is truly a serial entrepreneur.
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