This past Wednesday the HR Excellence Awards were hosted in Berlin, and I would like to congratulate the winners and the nominees. It’s great to see how innovative, pioneering and brave concepts have been implemented by the protagonists. Events such as the HR Excellence Awards bring the Best Practices into more businesses, promotes competition, and improves the productivity of the industry. So please, do it again next year!
However, one thing did stand out and make me wonder… among the 30 different categories, not one dealt with HR diagnostics or KPIs in personnel selection. It amazes me so much because the selection of employees is the biggest lever of a goal-and performance-oriented (and excellent) HR management of a company. For clarity, the average turnover rate of 10% in an average German company means that, in practice, in 6 years, only half of the current staff will be still be employed in the respective company. In plain language this means that the average German company has to recruit almost 50% of its employees again in the next six years, and if it grows, that percentage rises even more sharply.
Valid selection processes still scarce
Regarding the quality of selection decisions (validity), a lot of selection processes are archaic. Applicants are evaluated according to the superficial impression of their CV, unstructured interviews and a “gut feeling” generated in assessment – as well as the belief that long-term work experience alone qualifies someone to make instructed selection decisions. Not to mention recommendations from past employees. Even critical positions are in some cases recruited and selected for using a completely unstructured selection process. (Airbus does not select the supplier of its aircraft engines based on a “gut feeling”, nor does BMW choose Airbag suppliers on it). As a consequence, this leads to far more mis-hires than most HR Managers would publically admit. How much these mishires cost has been discussed in a previous article. Suppose every tenth selection process leads to a wrong result (hire), in a company with 1,000 employees, this would result in 5% of the entire workforce within 6 years.
Back to the topic: The HR Excellence Awards honor some of the coolest job advertisements, the most compelling mentoring programs up to the most amazing employee magazines and pretty much everything else that has anything to do with HR (of course CSR campaigns also have a big impact on employer attractiveness – so why not create an HR Excellence Award in 2013, for the best workplace connectivity with public transport?). What is missing, unfortunately, is a category for excellence in staff selection processes, based on a fact-and data-based discussions of the major recruiting KPIs. The excellence of a staff selection process decides whether both parties – companies and candidates – make the right decisions about future collaborations, and wrong decisions impose costs on both sides.