How Does It Affect Pre-Employment Testing?

33

Cyclical changes in the business marketplace in this country create challenges in the HR industry. The unemployment rate fluctuates from high to low; the climate for startup businesses is welcoming or warning; the stock market’s boom or bust cycles send stockholders; and the companies in which they’ve invested, on roller coaster rides regularly. All of those factors affect hiring practices.

The technology boom of 1999–2000 created a classic example of what can happen in hiring when the unemployment rate is low. Rapid growth in the industry coupled with a low unemployment rate added up to a sticky situation for HR professionals, explains Michael Callans, President of Wonderlic, Inc., based in Libertyville, Ill.

“There simply weren’t enough qualified people to fill the jobs,” Callans says. “Not enough candidates were coming through the door. People were desperate for help, so they ended up hiring anyone who could turn on a computer instead of waiting to find talented workers.”
2 s6 }/ m+ j7 x0 x! F0 {/ z: n
) I* S; |9 |2 d7 O2 qDuring times of low unemployment, workers in all industries feel free to make career moves because their skills are in great demand. Companies are so anxious to hire people to fill those vacant slots that HR directors oftentimes dispense with their normal hiring practices like structured interviews and pre-employment testing in an effort to staff positions quickly.
: c9 X( g8 t# O; w9 Z8 X! {  _
% [1 G! Z8 W' i* I& Y6 ?“Managers are afraid that, since there isn’t a big pool of candidates, they don’t have the luxury to carefully scrutinize their hiring decisions, choosing to fill positions with the best of the lot instead of the best, period,” says Callans. “That’s a mistake.”

! _* ~( C' I7 K  v) G# z; T“A bad hire is a bad hire, no matter the unemployment rate,” Callans explains. “It still costs time and money to train a new employee—and costs more of both if that employee isn’t a perfect fit for the job. It’s critical to hire the right person the first time, especially when the pool of potential employees is shallow. Odds are, you won’t soon get a second chance to get it right, and you’ll be in a worse position than if the job simply stayed vacant.”

33

“In times when the unemployment rate is low, companies must be patient and stick to their established standards. Eventually, the right person will come along and add long-term value rather than short-term mediocrity,” says Callans.

What about when the unemployment rate is high? This, too, can cause harried HR directors to cast aside careful hiring practices.
0 |. q1 p! m( Z4 T% J' y! H
“When you’ve got floods of people coming through your door for one position, it’s easy to be overwhelmed by the sheer numbers,” Callans says. “In such times, it is imperative that a variety of screening and assessment tools be used to quickly eliminate unqualified candidates—before you spend the time and money interviewing them.”
( x: V1 a) S4 y0 _6 v! a. @9 h  B
Another challenging hiring situation can arise when the economy is good, your company is growing and you need people quickly.

7 g3 A' K7 E# I0 K. ]“When a company is expanding, it needs workers who can multi-task, wearing many hats at once,” Callans explains. “Although it’s tempting to hire someone who can handle part of a job well, it can be disastrous for a growing company that needs flexible people who can learn new jobs quickly.”

. w! K6 @- `+ Z7 NInstead, Callans recommends heeding the lessons of the technology boom & bust, when often minimally qualified people were hired and overpaid because of the tight job market, and then let go as companies tightened their belts.

: F, D& x' \5 x“It’s a mistake to fill positions quickly, no matter the unemployment rate, and no matter the business climate,” Callans concludes.
: }8 v3 s, ^- }3 b1 E) d# x
Rather, a structured, careful approach to hiring is a winning approach every time. Using pre-employment tests for cognitive ability, character traits, skills and reliability help to ensure that you’re getting the best fit for the job and for the future success of your company.