How software helps firms hire workers more efficiently.

The problem with human resource managers is that they are human. They have biases; they make mistakes. However, with better tools they can make better hiring decisions, say advocates of ‘big data’. Software that crunches piles of information can spot things that may not be apparant to the naked eye. For example, number crunching the hiring of American workers who toil by the hour has uncovered some surprising correlations.

For instance, people who fill out online job applications using browsers that did not come with the computer (such as Microsoft’s Internet Explorer on a Windos PC) but had to be deliberately installed (like Firefox of Google’s Chrome) perform better and change jobs less often.

It could be just coincidence but some analysts believe that people who bother to install a new browser may be the sort who take the time to reached informed decisions (insinuating that keeping the same browser means that you cannot!), and such people should be better employees. Evolv, a company that monitors recruitment and workplace data, pored over nearly 3m data points from more than 30,000 employees to find this nugget.

Some 60% of American workers earn hourly wages, and of these about half change jobs each year. Therefore, firms that employ lots of unskilled workers,  such as supermarkets and fast-food chains, have to vet heaps – sometimes millions – of applications every year. Making the process more efficient could yield big payoffs in terms of cost-savings by reducing labour turnover.

Evolv mines mountains of data. If a client operates call centres, for example, Evolv keeps daily tabs on such things as how long each employee takes to a answer a customer’s query. Evolv then relates actual performance to traits that were visible during recruitment.

However, some insights are counter-intuitive. For example, firms routinely cull job candidates with a criminal record. Yet the data suggest that for  certain jobs there is no correlation with work performance. In fact, for customer-support calls, people with a criminal background actually perform a bit better. Likewise, HR departments automatically eliminate candidates who have hopped from job to job. However, a recent analysis of 100,000 call-centre workers demonstrated that those who had job-hopped were no more likely to quit quickly than those who had not.

Working with Xerox, a maker of printers, Evolv found that one of the best predictors that a customer-service employee will stick with a job is that they live nearby and can get to work easily. These and other findings helped Xerox cut attrition by a fifth (20%) in a pilot programme that has since been extended. It also found that workers who had joined one or two social networks tended to stay in a job for longer. Those who belonged to four or more social networks did not.

There is no point asking jobseekers if they are honest but surveys can measure honest indirectly by asking questions like “How good at computers are you?” and later “What does control-V do on a word-processing programme?” (I’m pretty good with computers and I do not know that one!). A study of 20,000 workers demonstrated that more honest people tend to perform better and stay at the job longer. However, the study also suggested that for some reason they make less effective salespeople (that’s because they are more honest!).

Algorithms and big data are powerful tools and used wisely, they can help match the right people with the right jobs. However, they must be designed and used by human, so they can go horribly wrong. Peter Cappelli of the University of Pennsylvania’s Wharton School of Business recalls a case where the software rejected every one of the many good applicants for a job because the firm in question had specified that they must have held a particular job title – one that existed at no other company!

Source: The Economist (2013) Big Data and Hiring: Robot Recruiters. The Economist. April 6th to 12th 2013, pp.71.

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