Hiring managers confess that nearly 50 percent of new employees do not fulfill their job obligations in the first 18 months of employment based on research conducted by Leadership IQ.

Experts estimate that this type of bad hiring decision can cost your company as much as 20 to 200 percent of a year’s salary according to HR Management. Besides just the cost, bad hires harm office morale, disrupt everyone’s productivity, and are hard to fire as they get interwoven in office politics.

Why is the hiring system failing? The problem lies within the traditional screening process:

Looking Good On A Resume

With a little embellishment, clever wording, great font, good spelling and grammar, pretty much anyone can look good on a resume. Job seekers who are not great at writing their own resume can even hire a resume consultant such as Jeffrey Metzger for as low as $225. Metzger describes his role as follows:

“I specialize in writing high-quality, attention-getting personal marketing documents. A resume alone can’t win you the job, but a poorly written resume can certainly eliminate you from consideration.

If you’re a recent grad, changing careers, or a seasoned professional, we have a resume solution for you. Each resume is custom designed to reflect your goals and personality.”

You can never be sure whether a resume is the work of the applicant in front of you, and if it is if it is 100% truthful. Ultimately, whether someone sounds good on a resume or not is not a great predictor of how they will perform on the job.

Random Filtering

There is an interesting story about sorting through a stack of resumes from co-founder of Podio Kasper Huithin. Huithin knew a guy who wanted to hire only lucky people. So he would take all the submitted resumes, put them into a stack, divide the stack in half, and throw out one of the new stacks (half of the resumes!). Similarly, some employers only look at resumes of candidates whose last name starts with a certain alphabet letter.

While other employers may not be as extreme with their resume filtering, some of the tactics they use are just as ineffective. Even filtering resumes through a keyword search is not that great. Looking for the word “manager” in all the resumes means you’ll miss resumes of potentially great candidates who have the word “managing” or “management” or “managerial” instead.

Other hiring managers skim resumes looking for signs of past success, such as graduating from a top university. However, many of these success factors depend on having money and connections, which are also not great indicators of how the job candidate will actually perform in the job role you’re hiring for.

The Interview Process

Some people are just good at interviewing. They are extroverted and agreeable, and almost everyone tends to like them. This is just one of the many biases a hiring manager might be bringing with her to an interview according to Pod Consulting:

“Have you ever met anyone and once you have got chatting experienced positive feelings about one characteristic that they possess (such as their appearance or that they possess a product you favor)? If you warm to this person because of the characteristic then everything they say seems so valid and in keeping with you – if you hear something that isn’t quite in keeping with the characteristic, the chances are, you will ignore it.”

Other interview biases include judging the interviewee based on your first impression, stereotyping, and comparing the candidate against other candidates instead of the job requirements.

As humans, hiring managers often decided whether the job candidate is a good fit based on gut instinct, subjectivity, and sometimes nepotism versus objective criteria of whether the job candidate will actually perform well in the specified role.

The Missing Piece

In 1984, Hunter and Hunter conducted a meta-analysis comparing eleven alternative predictors of job performance for entry-level positions. They found ability tests to be the best overall predictor of job performance, with a mean validity of 0.53. In contrast, interviews had the mean validity of only 0.14 as a predictor, resumes at a paltry 0.08, for actual job performance.

Yet, most hiring practices focus heavily on qualifying skills and personas of the job candidates, not on what is most important – whether the job candidate will be a productive part of the business. In this case, the best case scenario is to wait it out for 12 to 18 months to see the candidate’s actual value.

The Future of Candidate Screening – Testing and Data

With the onset of advanced technology, most jobs are not the same as they were three years ago. Therefore, experience is not as valid as work ethic and problem solving ability. Psychometric testing allows employers to identify these traits, by screening job candidates for productivity, before a resume is read. Those tests that are based on actual psychology research, offer predictive indexes on how someone will actually perform in a given position.

The information received allows employers to properly filter applicants in the first place. They assist in asking poignant interview questions, and they determine ‘diamond in the rough’ candidates that would have been overlooked by the trappings of the traditional hiring process, in an efficient and cost saving process.

Big data refers to the process of capturing, curating, storing, analyzing, and visualizing data sets so large and complex, they cannot be handled with traditional software tools. Companies that use big data to make hiring decisions analyze statistics about employee turnover, performance, and employee assessments to understand what type of people will be most successful at each job. They then use their findings to implement hiring assessments, like the one mentioned above, that screen job applicants for the identified traits.

Choosing to implement psychometric testing and data collection, are always optional to the employer. However, their usages are on the rise and these two scientific methods are poised to change the future of the traditional hiring process over the next few years.

If you want to learn more about pre-employment psychometric testing, check out www.cream.hr for more details.