Advanced HR - linking psychological assessment to business results

By Jeremy Pemberton-Pigott, Managing Director, PreVisor UK and EMEA

Successful organisations like to plan ahead, build transformational strategies that will decide how they will grow, improve their profitability and deliver value to their shareholders. It is also widely documented that one of the most important ingredients for delivering success is through its people. Indeed research conducted by Professor Michael West et al at Aston Business School in the UK has suggested that amongst key management practices including R&D, Strategy, Quality Assurance and Technology, HR practices can be found to be three times more powerful at predicting employee productivity. However, despite this, many organisations struggle to link hard people metrics to important business drivers. So with this dilemma, how can HR re-engage with the organisation and align its activities to business results?

Yet Another Cost Reduction, What's Next? Target Bottom Line Results

The more recent trend of outsourcing virtually every aspect of your HR and optimising your recruitment process will only take an organisation so far. Cost can only be reduced or optimised to a certain level where every ounce of efficiency has been stretched to its limits. There is position where a continued efficiency drive will begin to have a negative affect on the organisation. So, if you have reached that point, then what? Some approach is needed to take the organisation forward

One way, is to target the point of entry of your talent, recruitment. By taking advantage of the latest advances in psychological research methods and online assessment technology. The documented results are more than impressive, sometimes achieving an ROI of over £100 million in a single year. Furthermore, the dynamics of methodology have successfully targeted up to 25 different critical business metrics such as increased sales, improved customer satisfaction, improved productivity, reduced staff turnover and reduced shrinkage in retail organisations.

The Methodology

Most organisations when they look to recruit talent, search for high performers. High performance in any job role, requires a range of personal attributes that may include job related knowledge, personal contacts, skills, abilities, aptitude, personality  preferences, values and behaviours. Depending on the job role, any one of these attributes could have a greater or lesser degree of significance to high performance.

Too many organisations spend too little time understanding these important ingredients or "performance DNA" to help them make the right people decisions. PreVisor works with clients to accurately crystalise what these attributes look like through a detailed job analysis process. Once confirmed, the range of attributes identified are linked to a selected range of predictive assessment content taken from a choice of over 1000 tests. At PreVisor, we call this comprehensive approach, "whole person" assessment. This methodology has proven to be more accurate, delivering higher levels of overall prediction of success. In addition, through adopting this approach, organisations are able to manage their risk more precisely when making important decisions about their people.

Predicting Future Performance- Advances in Leading Edge HR Science and Technology

Until now, it has been difficult for HR practitioners to access the broadest range of assessments to cover all personal attributes from a single provider. PreVisor has spent the past decade collecting together 8 "best of breed" assessment firms with the range of test content to create a single entity that can deliver the full range from within one organisation. The occupational psychologists working at PreVisor have a deep understanding and documented scientific research about the predictive nature of each test, with many down to item level (individual question). So what is the significance of this? Simply, PreVisor is able to configure shorter, tailored and more predictive test solutions for each job role which are more candidate centric and take less time to complete. When recruiting online using employment tests, you are operating in the candidates time and employer branding and candidate perceptions of organisation are based on their application experience. Shorter, tailored predictive assessments are the future.

Below are just five examples where organisations have achieved measurable ROI through targeted use of this latest technology:

CASE STUDY 1

To demonstrate in a retail case study, PreVisor developed some tailored pre-employments tests for Luxxotica (owners of Sunglass hut, Oakley, RayBan). Sunglass Hut were suffering with problems of product shrinkage (goods disappearing) and wanted to develop a pre-employment tool that would reduce this. The outcome was the creation of a tool which could predict shrinkage reduction by $78 million annually in over 1500 stores. In addition, assessments were developed to improve sales associate performance. The newly developed sales assessments predicted increased sales of over £20 million.

CASE STUDY 2

In one example of a leading global retailer, the client was looking for improved sales from their sales professionals and wanted to identify a better hiring process that would deliver this. PreVisor designed an assessment process where the average, Sales Professionals who scored in the top 70% sold £ 237,351more (per person) than those in the bottom 30% in Q1 and Q2 providing an immediate impact and evidence of ROI for the business.

CASE STUDY 3 – Branch Managers Achieve 140% Higher Sales Whilst Promoting 59% higher Employee Engagement

At a national financial services organisation, branch managers who earned high scores on PreVisor's Front Line Manager Assessment Solution were four times as likely to be top performers, had 57% better future prospects as leaders, were 140% better at driving sales, and maintaining 59% higher employee engagement.

CASE STUDY 4 – Top Scoring Financial Services Collection Agents Demonstrate the Capacity to Recover an Additional £92 Million Annually

High Scoring collections agents in the credit card services division of a financial services organisation collect £7,710 more per month compared to low scorers. If the organisation were to use the assessment to screen out low scoring candidates for collection roles, the expected overall organisational impact would be £92 million in annual collections revenue.

CASE STUDY 5 – Telecoms Firm Rings up £21million Increase in Annual Retail Sales

In a telecommunications company, retail sales associates who earned high scores on an assessment averaged £807 more per year in sales commissions compared to low -scoring associates. Across the entire workforce, the estimated impact of using the assessment to screen out lower scoring candidates is £21 million annually.

The above cases studies are just a few of the research studies that PreVisor has delivered for some of its clients over the past few years. To read about more examples of exceptional client ROI results you can download the PreVisor 2009 Business Outcomes Study Report at www.previsor.co.uk/results/outcome/2009.

PreVisor has delivered a wide range of nearly 50 different types of targeted business outcomes for its clients including increased sales, better customer service, improved staff retention, better leadership and management plus many others critical business ROI results.