HR Technology: Better Hiring Through Technology

In the 1920s, when Babe Ruth was a company spokesman, Barbasol shaving cream was filled and packaged by hand at an Indianapolis factory. In the 1930s, Barbasol had hundreds of employees.

In 2009, Perio Inc., the brand's current owner, decided to open a factory in Ashland, Ohio, to manufacture Barbasol. With automation, the company needed only 22 employees to start a first shift. Before opening the facility, Perio brought in JC Rice to rethink hiring.

"We knew it was an employers' market, and we were anticipating 1,000 candidates," says Rice, Perio's vice president for shared services. "We wanted to have a consistent process, but one that could handle that number of candidates."

They received more than 3,000 applications.

To help sort through the deluge, Perio used three online tools from Select International. Two were used to screen candidates: EZ App, an automated application, and SecureFit, an assessment to identify high-risk hires.

After an initial interview, the remaining candidates were given the Select Assessment for Manufacturing, a test designed to evaluate personality and behavioral characteristics pertinent to hourly manufacturing employees. Those who passed were given reference and background checks.

Based on the ease of this initial round of hiring, the company used the process to select candidates for additional shifts and add another production line.

Widespread Adoption of Automation Tools

Given the complexity of hiring processes and different ideas of how hiring should be done, a range of automation tools have emerged for tasks, from performing keyword searches of resumes to conducting behavioral and skills assessments. These tools can be integrated into human resource information systems or into stand-alone products and can be designed to implement particular HR management philosophies.

Perio chose the Select International tools to advance a set of Toyota Motor Corp. principles known as the Toyota Way: continuous improvement and respect for people.

K&N Management, operator of eight restaurants in the Austin, Texas, area, follows Topgrading Inc.'s hiring and promotion methodology, a five-step screening and interviewing process. K&N's hiring manager, Danielle Robinson, has the title of Topgrading director. K&N uses JobApp Network Inc.'s testing tools to grade applicants.

A study from Towers Watson found that automated hiring tools are gaining widespread adoption, particularly among larger companies.

The consultancy's 2012 HR Service Delivery Survey demonstrated that technology plays a key role in hiring at 92 percent of large companies (those with more than 20,000 employees) and 77 percent of medium-sized companies (those with 5,000 to 20,000 employees), says Hank Johnson, Americas practice leader-HR service delivery. In contrast, just 54 percent of smaller organizations (those with fewer than 5,000 employees) use technology in hiring. But HR professionals say automation can work even for companies with fewer than 100 employees.

In the Towers Watson survey, 22 percent of employers rated their technology platform "very effective," and 53 percent rated it "somewhat effective." Johnson points out that while technology can speed and streamline hiring, it can't overcome process deficiencies. Computers are only as effective as the parameters they are given. If the job requirements or competencies are not well-defined, the computer cannot identify the right candidates.

Proven Tests of High-Volume Recruiting

Hiring software can automate processes, grade candidates and provide HR professionals with some guidance. But it generally lacks the sophistication to determine whether a candidate would be a good employee for a professional position, consultants and HR professionals say.

Screening candidates for hourly positions at restaurants and in retail operations is different: With the advent of Web services, the same tools can be used by large and small organizations. For example, HR professionals at both K&N, with 500 employees at eight hamburger and barbecue restaurants, and The Rose Group, with more than 5,000 employees at 65 Applebee's and other restaurants, use JobApp to help them decide which applicants to hire for hourly positions. Neither uses it when selecting managers or headquarters staff.

"We don't have as many salaried employees, and the online process does depersonalize it, so we use a more personalized process on the management side," says Paul Rockelmann, SPHR, vice president of human resources for The Rose Group in Newtown, Pa.

With JobApp, each hourly job candidate fills out an application online and takes a test to qualify. K&N uses two tests: one for those who will serve customers and another for those who will prepare food. Some prospective employees put in two applications and take both tests. The software rates applicants on a one- to five-star scale. JobApp can also provide background checks and onboarding tools to manage and verify I-9 and W-4 forms.

K&N gets about 3,400 applicants a year and hires 200 employees. All hiring is managed centrally rather than by restaurant managers. The JobApp electronic forms are designed to guide applicants entering data. The tool has algorithms to check forms for errors, describes steps for correcting those errors and then double-checks completed forms.

"We can see at a quick glance if the person is a good fit for the position, and it also makes the onboarding side much easier," Robinson says. "Since it makes it difficult for the employees to make an error on the forms, it ensures we are compliant" with government rules and paperwork requirements.

The Rose Group's HR staff handles its application process centrally, but restaurant managers make the hiring decisions. Prospective employees fill out applications, answer screening questions such as "Do you have reliable transportation?" and take a behavioral assessment. Then, when managers need an employee, they start by considering candidates with the highest ratings instead of looking through paper applications.

"Managers love the automated system," Rockelmann says. "It lets them focus their attention on prequalified candidates and frees them up to spend more time with the guests and their team members."

When the manager decides to hire someone, the new employee goes online to fill out paperwork that goes into the payroll system.

Gregg Appliances Inc., operator of more than 200 hhgregg appliance and electronics stores east of the Mississippi, takes a similar approach to The Rose Group in hiring hourly employees. The company has about 7,000 employees. Due to growth and attrition, it added about 5,000 associates in the past year.

The company uses a pre-employment screening process from London-based SHL, which was acquired this year by the Corporate Executive Board. Integrated with ADP applicant tracking software, the system is centrally managed, but hiring is done by store managers. The system includes guides to help create uniform interview questions.

"Because HR is centralized and the business is decentralized, it is helpful to have that tool for the hiring manager," says Donna Desilets, hhgregg's vice president of human resources. "There is a consistency factor, since everyone is taking the same assessment. Combined with the interview guides, it gives hiring managers a greater level of confidence that they are selecting the best employees."

Applicants can take assessments for sales associate, warehouse or customer relations positions. The software provides a rating of red, yellow or green to store managers filling an opening.

Desilets says scoring is based on how high-performing employees in similar company positions answer the questions. Applicants who respond in the same ways receive the highest scores. The questions are regularly reviewed and adjusted to improve the match between pre-employment assessment and how employees actually perform on the job.

Children's Hospital of Pittsburgh has 3,000 employees and fills about 900 positions per year. Candidates apply through the hospital's PeopleSoft human resource management system from Oracle. Then, Talent Technology Corp.'s Resume Mirror Extraction module analyzes the resumes and presents HR professionals with the best candidates. In addition to making it easier to select active candidates, the method gives recruiters more time to pursue passive ones.

"At any given time, we might have 40 or 50 open jobs. When trying to look through applications manually, we might have to look through 50 or 70 resumes before finding someone," says Rhonda Larimore, SPHR, vice president of human resources and support services. Now, "We can focus on the top resumes. Instead of spending six hours a day mining resumes, our recruiters have more time to invest in relationships [and] go to job fairs, schools and networking events."

When it comes to selecting staff for specialized or highly skilled positions, the above methods are too limited, most experts agree. But when hiring professionals, rather than hourly employees, resume screening still plays a role.

Opportunities Beyond the Basics

Highly creative or productive people won't necessarily be found with standardized testing, and sometimes it is important to test for particular skills.

HireArt conducts specialized sourcing and prescreening for companies. Instead of just filling out online forms, candidates take part in a series of online video interviews. The questions are preprogrammed, rather than asked live, and there are time limits. In addition to answering questions orally, candidates may be required to perform tasks such as solving problems in real time, writing letters, making sales pitches, or taking raw data and producing Excel analyses. Work samples are uploaded to accompany the videos.

London-based company onefinestay, which rents high-end homes and apartments to vacationers, started using HireArt to recruit staff for its expansion into New York City. The company now has about 150 employees and plans to hire another 50 in 2013.

"We want to find people who are a good cultural fit and have a knack for solving logistical problems," says Henry Imber, onefinestay's New York operations director. "For example, we will ask them if they started a restaurant, how would they structure it, just to check how they think."

Applicants submit three 2-minute videos. HireArt staff screens the videos, eliminating applicants who are clearly not a good fit for the position and flagging any that are particularly strong. Imber can log in to the portal anytime to view videos and schedule in-person interviews. He says the screening step means applicants who are invited for live interviews have a good chance of being hired.

Prices for hiring and testing software vary wildly.

The Costs and Limitations of Technology

"Assessments come in all shapes and sizes and are customized for each client," says David P. Juristy, vice president of sales for Select International. "We have solutions and discount levels that make our assessments within the reach of every organization's budget."

JobApp Network's prices vary, too.

Laura Souza, senior manager of public relations for Kronos Inc., says pricing options vary based on the size of the organization and the number of licenses.

HireArt, on the other hand, has a set price structure. Elli Sharef, who develops interviews for the company, says if HireArt handles advertising and screening and submits applicants to the customer, it charges a percentage of the employee's first-year salary—10 percent or less. If the customer recruits and just uses HireArt's platform to review candidates, there is a flat rate of $500 per position.

One potential limitation of technology: Resume screening software may not identify qualified military veterans. The military frequently uses different terms than civilian employers to describe job functions, and those terms may not show up in keyword searches.

Children's Hospital of Pittsburgh is part of a military mentoring initiative with a focus on hiring veterans. Larimore says the HR staff is working to map the hospital's keywords with military ones so they will show up in resume searches.

Automated systems are great for reducing workload and streamlining processes, but they are not—and may never be—complete solutions.

The hiring process needs face-to-face interviews by unbiased managers, Johnson of Towers Watson says. Technology can't measure intangibles such as team chemistry, common sense and oral communication skills. And no matter how good the hiring process is, it is only one aspect of building a competent, engaged workforce, he notes.

"Technology and tools can be used effectively throughout the hiring process," Johnson says, "but most jobs still involve human interaction. We simply cannot forget the value of the intangibles."

Drew Robb is a freelance writer based in the Los Angeles area.