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Build a Better Mousetrap

by Mel Kleiman, CSP

It's been said that the only people who embrace change are wet babies and cashiers. Well, add one more group to that list innovators of technology. Regardless of interest or need, developers of new technologies thrive on creating newer, faster and more effective "systems." Working from a Field of Dreams mentality, they believe if they build new technologies, users will come.

Well, they are right. Automated inventory controls revolutionized supply-side management, just as scanner forever changed retailing and customer loyalty programs, or e-commerce changed the way many of us now shop. Now, it is human resources opportunity to benefit from technological advances.

For many smaller store operations, especially independently operated stores, new recruitment technology has meant additional copies of an application form or new pens for applicants. Fortunately, new technologies are now available which not only improve the recruitment and hiring process, but also allow managers to refocus their attention on other responsibilities.

While change is inevitable, growth is entirely optional. Concerns like shrink, productivity, turnover, and legal risk are forces all employers must address. Leaders like Wal-Mart, Target, Exxon/Mobil and Chevron are not only accepting technology and change; they are finding ways to use it to their advantage.

The US Department of Labor estimates that nearly 50 percent of all hourly employees quit or are no employed within 6 months of hiring. In the convenience store industry, turnover rates have approached 145 percent and greater annually. That equates to nearly 1 1/2 additional hires for every single vacancy.

There are serious economic ramifications to such grave turnover statistics. Studies by Coca-Cola Enterprises, for example, show that the cost to bring a single employee up to the level of acceptable productivity is in excess of $3,400. And in some industries hard costs for employing new personnel are more than $600 per employee. That includes advertising, manager time to conduct interviews and other actual dollars spent. For an employer of just 10 employees - these costs account for more than $6,000 in lost profits. It does not include the cost of lost productivity and diminished morale if you ad this in you are looking at over $30,000 in losses.

To combat perennially troublesome turnover rates, owners and operators must become employers of choice - places where employees want to work. In addition, new automated hiring systems offer effective means for finding and hiring dedicated and loyal employees. These systems allow employers to hire better people and know why they are better. They also mitigate hiring risks and reduce worker compensation claims.

Manual vs. Automation

Hardcopy applications and a one-on-one interview are all most employers need to meet their base personnel needs. Paper applications provide employers with basic information, enough to make a decision, albeit non-educated.

Tests, assessments and prescreening mechanisms can be tailored to identify applicants with questionable backgrounds, a history of leaving jobs early, or a penchant for shirking responsibility. While hardcopy approaches collect and share information, automated systems can convert that raw data into useful intelligence.

Today's automated systems though can turn raw information into intelligence. Depending on the level of complexity, automated systems can be developed which analyze applicant responses and existing employment patterns.

Just as inventory control systems can analyze customer purchase patterns and recommend quantities for future product purchase, so to will automated hiring systems collect individual applicant information and compare it to patterns of existing employment records to provide effective employment recommendations.

For example, while we know that employees with a high school education last longer than those without, automated hiring systems compile the data in one place for analysis. Many systems are even programmed for "self-learning," meaning they constantly analyze existing employment data for patterns and proven trends.

In addition, automated systems centralize the initial application and review process, removing employers from the system and freeing up managerial time to focus on other concerns. By eliminating time spent on non-productive hiring activities, managers can be more productive and direct results oriented. Managers no longer are the first point of contact, because any employee can refer prospects to the automate application centers—be it a telephone hotline, a Web site, or an in-store kiosk. All of this contributes in increased managerial efficiency and effectiveness.

The reduced time recruiting is also a significant source of cost savings as well. Studies show the costs of printing, storing, and utilizing paper-based applications is in excess of $50 per applicant. Interactive Voice-Response (IVR) systems, which are responsive 24/7 telephone hotlines, generally cost $3 to $10 per applicant. More complex kiosks can cost upwards of $60 to $100 per month, per location. Depending on levels of complexity and breadth of functionality, automated systems may cost $20,000 to $50,000 in initial set-up expenses.
While not cheap, these systems have been proven to pay for themselves in the first year of implementation.

Because they are more readily accessible, automated hiring systems increase applicant flow. The systems can be available 24/7, allowing interested prospects to apply when they want to. Effective prescreening assessments and tests can then filter a broad pool of talent and provide employers with just the most appropriate applicants for further consideration.

By eliminating unqualified candidates, and utilizing skill and personality assessments to better capture the true capacity of remaining prospects, employers can make better, more informed hiring decisions. And by hiring more effectively, employers can mitigate hiring risk, reduce unemployment claims, and develop a more focused, well-balanced team.

The centralized collection and storage of HR data allows for greater analysis capabilities, and simplified reporting mechanisms for welfare, equal opportunity employment, and government tax credit programs.

Advantages to Applicants

To maximize all of the employer advantages, the hiring system must first and foremost be a system that prospects take to. Tele-App and web-based systems are available 24 hours a day, 7 days a week. This allows applicants to apply on their own time and on their own terms. They can control when they access the system. This important for candidates who already have jobs and can not get an application during regular store hours. It is also important for any candidate who desires some privacy.

In-store kiosks and other application devices engage applicants at the moment of interest. This is more convenient for applicants and enhances their application experience.

Automated hiring systems have gone through numerous phases of development. Today's systems are easy to use and extremely user friendly. They are also non-judgmental, giving candidates a confidence boost as they apply. And finally, automated hiring systems implies employers are "state of the art" and on top of technology. This positive image is very influential in developing an "Employer of Choice" persona.

Ultimately, the recruiting and hiring process will be completely automated. It will become more and more difficult for those that do not utilize these systems to survive. If success is to be measured on the quality of people you employ - then systems that improve your hiring ability will be inevitable.

The acceptance of automated systems is already taking place. Target, Wal-Mart, Exxon, Walgreen, Home Depot already have some systems in place. These are your competitors for great employees - just as much as Chevron, the Exxon, The Flying J Truck Stop, and Circle K. Like wet babies, cashiers, and technology
is time that you embrace the change.

Mel Kleiman, CSP, is an internationally recognized consultant, author, and speaker on strategies for hiring and retaining the best hourly employees. He is the President of Humetrics, a leading developer of systems, training, processes, and tools for recruiting, selecting, and retaining the best hourly workforce. Mel is also the author of four books, including the best selling "Hire Tough Manage Easy." You can reach Mel at (800) 218-0930 or (713) 771-4401mel@melkleiman.com.