C O M P E T I T I V E A D V A N T A G E. R E A L I Z E D.
Competency-based
Selection Pays Off
Jim Thomas, Ph.D.
Manager, Consulting Services
January 17, 2003
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Presentation Overview

The Selection Challenge
 The Selection Solution
 Screening System Outcomes
 ROI: Costs and Benefits
 Lessons Learned
Q&A
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
The Selection Challenge
 National
financial institution
 Operations roles
•
•
Transaction Services
Lockbox Processing
 6500
hires per year (37% turnover)
 13,000+ applicants processed
annually
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
The Selection Challenge
 High
standards for new hires
 Tremendous pressure to
manage costs
 Fact-based decision making
culture
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
The Selection Solution
Develop and deploy a new
screening process . . .
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Web-administered
Competency-based
Technically sound
Defensible
Demonstrated ROI
© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
The Selection Solution
Career Fit Inventory
• Self-reports of a candidate’s past behaviors,
preferences, and motivations as they relate to
critical work behaviors
• Approximately 100 items with a 5-point Likerttype scale ranging from "strongly disagree" to
"strongly agree"
• Six Behavioral Disposition Scales include:
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Quality Approach
Confident Approach
Outgoing Approach
Stable Approach
Adaptable Approach
Positive Approach
© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
The Selection Solution
Applicant Experience Profile
•
•
•
Competency-based instrument that solicits
applicants’ past experiences indicative of the
ability to perform critical work behaviors
Applicants respond to a series of behavioral
statements and indicate if they have performed
the described behavior
Assesses past behavior related to:
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Ability to Learn
Interpersonal Skills
Work Standards
Initiative
Customer Service Orientation
© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Screening System Outcomes
Candidate Outcomes

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Passing rate = 75%
No adverse impact
CFI time to complete* = 27 minutes
AEP time to complete* = 19 minutes
80+% of candidates finish battery in less than one
hour
High levels of candidate satisfaction
* Average
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Screening System Outcomes
Employer Outcomes


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Candidates who pass screening battery are 5
times more likely to be successful performers
Each candidate “screened out” saves
approximately 20 minutes of Recruiter time (time
allowed for interview)
Web-administration of screening battery viewed
as highly successful by Recruiters
Dramatic reductions in turnover for both job
categories:
•
Transaction Services: 37% to 25%
• Lockbox Processing: 30% to 21%
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
ROI: Costs



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Screening Costs Increased by
$243,000
Interview Costs decreased by
$33,000
Total net increase in selection
system costs = $210,000
© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
ROI: Benefits

Direct Benefit - Lower new hire/
orientation costs (# hires x daily salary
x 90 days) = $4.7M
 Indirect Benefit – Less lost productivity
due to vacancies (# vacancies x
average time to fill* x daily salary) =
$1.2M
 Indirect Benefit – productivity
improvements due to more skilled
workforce = ?
* Average time to fill was approx. 30 days
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
ROI: Calculation
ROI = Benefits – Costs x 100
Costs
ROI for Direct Benefits = 1,092%
ROI for Indirect Benefits = 248%
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Lessons Learned

Selection system improvements
entail COSTS

Selection system improvements
deliver BENEFIT$

Know where to look for benefits:
•
Selection system operating costs (e.g, cost per hire). Systems
with more extensive interview components may show ROI on
this basis alone.
• Reduced turnover (less recruiting, less orientation, less training)
• Increased workforce performance
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Lessons Learned

Most HR organizations don’t know
their costs!

Even when cost data is available, ROI
studies are difficult to conduct (not the
same as a validation study)

Rule out other causes for positive
outcomes
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Lessons Learned
I/O Psychologists working as HR
Professionals must experience a
paradigm shift . . .
Validity
Coefficient
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Lessons Learned
Decision Makers want HR to . . .
Show Me
the Money!
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Questions and Answers
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
C O M P E T I T I V E A D V A N T A G E. R E A L I Z E D.
Thank you
If you have any questions or
comments, please e-mail
Jim Thomas at:
jim.thomas@ddiworld.com