Why HR Assessments are Vital for the Philippines’ Growth

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Why HR Assessments are Vital for the Philippines’ Growth

Every time an employee is hired, trained, evaluated or promoted, the organization is being rebuilt. Every employee is engaged in either moving the business forward or holding it back.

Previously, it was believed that any reasonably intelligent person could, through training, be shaped into a productive employee. However, if this were true, companies would not suffer many common ailments.

When people are correctly matched with the work they do, the combination of motivation and interest means that work becomes a creative challenge, and results go up.

Using HR assessments to gain better insights into the full candidate

In general, people only let you see what they want you to see, but like icebergs, what you don’t see is often more significant. To make the most advantageous decision, you must look beneath the surface to see the essence of the ‘Total Person’, as is done in The Profile XT assessment.

A top-performing employee is typically a good fit for their organization in 3 key areas.

  1. Skill Match: Does the candidate have the education, training and experience needed?
  2. Company Match: Does the candidate have the appearance, demeanor, integrity, attitude and values of the company?
  3. Job Match: Does the candidate possess that unique combination of thinking style, occupational interests and personality traits that lead to success on the job?

Skill match is what most HR professionals hire for, and the most obvious thing to evaluate. You tend to look a work experience, hard skills, and qualifications or certifications to gauge this. However, many employees who have all the hard skills they need to do a job still fail.

Company match can also be called culture fit. HR professionals usually rely on interviews and sometimes reference checks to gauge whether the candidate aligns with the company values, understands the company mission, and the like.

The job match is often the crucial component between a top performer and an average performer. This refers to job-related core competencies found in top performers, which can include hard and soft skills, the combination of which creates the best skill set for excelling at a certain job.

Value of job matching for businesses

A good job match improves business and processes overall in many ways. A few of these include;

  1. Higher productivity
  2. Better employee retention
  3. Reduced tardiness and absenteeism
  4. Reduced conflict, fewer management interventions
  5. Lower training costs

1) Higher productivity

The average difference in productivity between a top producer and an average producer is at least 2:1.

In Myths of Employee Selection Systems by Podsakoff, Williams and Scott, they determined there was a threefold difference in productivity (what they called “The Three to One Ratio”). Closer to home, a client of Profiles has shown a 5:1 ratio for a particular sales function.

This is the heart of the many benefits of utilizing The Profile assessment. Although figures vary by company, it is typical to hear that in any group of employees roughly one third are regarded as top performers, one-third average, and one third poor. The latter group are basically mistakes created by the existing selection process.

That means an organization ‘got it right’ one third of the time and is seeking improvement on the other two thirds. If a top performer produces twice as much as an average performer, a poor performer products as little as half the average performer.

The application of The Profile assessment, when added to your existing interviewing and background checking procedures should help companies hire top performers (“get it right”) 60% of the time, or more than half. After that, approximately one third would be average and the remaining few percent would be the poor performers.

That means, using the right HR assessments can help boost productivity by almost one third, or approximately 33%.

2) Better employee retention

Research shows that replacing an employee can cost up to 150% of that person’s annual salary, and the average cost of hiring a new employee can run more than $7,000.

Using HR assessments to hire well in the first place will help you avoid making poor talent decisions that end up costing all that time and money to replace.

3) Reduced tardiness and absenteeism

Whilst it is not costed in many organizations, absenteeism alone is reputed to cost a 50 person company $31,000 a year in the USA, and pro rata for larger concerns.

If an average employee looses a “few” days each year through absence or lateness, and that employee stays with the company an average of 4 years… then it is clear that over the term of employment, some weeks of time will have been lost.

Not only is the time of an employee lost to the company, but also the productivity levels of everyone who has to work with those absent or late employees, and are relying or waiting on something from them to do more work.

Investing in good job fit helps to reduce absenteeism thanks to the motivational factor behind hiring people with good job fit, from values to ability.

4) Reduced conflict, fewer management interventions

The less tangible items such as reduced conflicts, stress and management interventions will also benefit the company.

For example, a recent survey suggested that managers spend as much as 60% of their time solving “people” problems rather than pursuing matters directly related to the aims of the business.

For illustration/quantification purposes, let’s say that the average monthly compensation of a manager is P50,000 and the company has five managers, the monthly cost of taking away valuable executive time, therefore, is: 60%  x P50,000 x 5 = P150,000.

Job fit will reduce this need by always having the right person in the job, who is compatible with the job, his/her co-workers, and management.

If one can recover just 20% of the above cost, it will amount to a savings of P30,000 per month. And, we have not yet considered other related factors such as the effect of reduced management time taken away from project management, revenue-producing activities, and strategic thinking/planning.

5) Lower training costs

Further, reduced training by having good ‘job-fit’ will impact the training budget. In some cases it will be shown there is no training needed, but where it is needed it will be very specific to the particular candidate and his or her new job. Wasted general training programs will be eliminated.

The return on investment for HR assessments is huge. Further, this is a one-time investment, which will be recouped over the tenure of the employee in the company. The data obtained through the Profile Assessment can be reused many times over, for a more objective evaluation of promotion, transfer, career development, succession planning, and development of specifically needed training programs.

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