pan blog

Labor: Sales Driver or Cost to be Minimized?

Reid Klion — Fri, 30 Mar 2012 18:27:48 GMT

There was a recent article in the Harvard Business Review that caught my eye. Entitled “Why 'Good Jobs' Are Good for Retailers,” Zeynep Ton argues that investing in employees often makes sense from a profitability perspective, even in high volume retail situations where this strategy if often not pursued.

If an organization views the ratio of staffing costs to sales revenue as a key metric, it can become too easy to cut staff as opposed to focus on other factors that may drive increased revenue but are harder to change quickly and may not be immediately reflected in the bottom line. The challenge for retailers is that staffing costs are often their most easily controllable expense. As a result, it is typically easier to cut staff hours as opposed to taking other actions that have the potential to increase revenues. Additionally, short-staffing and a demoralized employee base can lead to a death spiral where problems with turnover and absenteeism trigger a further deterioration of customer service and sales and result in yet another round of staff cutbacks. In contrast, if employee investments are made and labor is not seen as a cost to be minimized but rather as a significant sales driver, a positive feedback loop can be created. Some stores that have taken the latter approach include Trader Joe's, QuikTrip, and Costco. The article is definitely worth a read.

Reid Klion

Increased Security for SAT and ACT

Reid Klion — Tue, 27 Mar 2012 17:47:51 GMT

After a recent cheating scandal in which students in Long Island paid proxy test takers to complete their exams, both the SAT and ACT will now require candidates to upload a picture of themselves when they register. The picture will be printed on the admission ticket that students take to the exam site. Students will also be required to designate their high school so that the roster of test takers and their photos can be forwarded for review by school officials who presumably know them. While there are likely still ways that the system can be “gamed,” it seems an improvement from the status quo. What is also more interesting is that this is an example where internet-technology can be used to increase the security of the exam as opposed to a tool to breach it. (For example, think of all the reports where the internet has been used as a tool to facilitate "brain dump" websites where harvested items are illicitly shared with others.) It also testifies to the near ubiquity of the means to access electronic photos which is commonplace today but certainly was not ten years ago.

Reid Klion

LSAT Administrations Down Nearly 25%

Sara Camden — Tue, 20 Mar 2012 19:12:41 GMT

Over the past few years, the employment market for newly minted lawyers has plummeted. From a 2009-2010 high of 171,514 administrations, it went to 155,150 last year and now to 129,925 this season. While data can be hard to come by and there have been multiple reports (and lawsuits) over law schools exaggerating both employment rates as well as starting salaries, recent credible reports indicate there are approximately twice as many law grads who pass the bar as there are legal jobs for them.

While some of this is reflective of general economic trends, it is also a testament to how legal practice has changed due to a number of factors including clients who are no longer willing to pay high hourly rates to newly minted lawyers, increased use of technology, as well as offshoring of legal work. As a result, the job market has contracted and will likely not return to previous levels nor to similar levels of compensation. Perhaps even more so during poor economic times, law schools often serve as a temporary destination for recent college graduates who couldn’t find work or were unsure of what career to pursue. Now, with the recognition of the substantial loan burden that law school often entails (sometimes well over $100,000) and the realization that there are limited employment opportunities for young lawyers upon graduation, it seems the attraction of law school has been significantly diminished.

Reid Klion

Nominations Being Accepted for IPAC Innovations in Assessment Award

Reid Klion — Fri, 16 Mar 2012 17:22:41 GMT

The International Personnel Assessment Council (IPAC) is currently accepting nominations for its annual Innovations in Assessment Award. The award recognizes a person or work group for the development and application of an innovative personnel assessment tool or procedure which has resulted in improved effectiveness, efficiencies or cost savings. Self-nominations are also accepted. The award will be presented at the 2012 IPAC Conference to be held July 17-20 at July 22-25 in Las Vegas. More here.

Reid Klion

Collecting Outcome Data: Practical Considerations

Reid Klion — Fri, 09 Mar 2012 16:15:48 GMT

A topic that often receives less attention than it should in the HR community is the collection of employee performance data. On the one hand, we need it in order to evaluate the effectiveness of selection tools and other measures that might be used to improve job performance. On the other, it is often difficult obtain useful job performance measures that are truly effective because the data we tend to collect in the course of our day-to-day work, such as performance management system is often not useful for this process. (Here is an earlier post on this issue.)

With this in mind, I attended a presentation by Eugene Burke who is Chief Science and Analytics Officer at pan’s content partner, SHL, at the recent Association of Test Publishers meeting where he spoke about some of the findings in his recent paper. Reflecting on some of the findings in the paper (and other research indicating that many organizations do not collect employee performance data in a systematic way), I asked him how he managed to induce organizations to collect the performance data he reported. His response, which I thought was rather pragmatic and effective, is to encourage clients to first identify the job metrics they want to impact within the organization (e.g., reaching sales quota, early turnover, absenteeism) and then collect data internally which tap into this. By identifying organizationally goals which are of specific interest, it is often easier to garner internal support and resources to collect them. Additionally, these can be used as outcome measures to assess the effectiveness of selection programs and other interventions.

Reid Klion

pan at ATP

Reid Klion — Wed, 22 Feb 2012 19:12:48 GMT

The Association of Test Publisher's annual Innovations in Testing conference will be held February 26-29 in Palm Springs, CA. As we have for the past several years, pan will be a conference sponsor. If you will be there, please stop by and see us!

Reid Klion

Difficulties Hiring Skilled Factory Workers

Reid Klion — Mon, 20 Feb 2012 19:06:49 GMT

While the unemployment rate continues to trend down slowly, it is still above 8% (8.3% nationally as of January 2012). However, there are also increasing reports of businesses having difficulty hiring skilled workers, specifically in the manufacturing trades. While the US has lost several million factory jobs over the past decade, there is an increasing need for individuals who can program and operate the automated manufacturing systems that are being used on an ever broadening scale The challenge for employers is finding people with the aptitude and skills who can do this work. A number of factors contribute to this scarcity including the dynamic that many traditionally trained tool and die makers don’t have the skills to run CNC machines, demographic shifts in younger workers away from factory work, and the significant level of math and technical skills this work now requires. Since this new approach to manufacturing reduces the number of people required for production, it reduces the need for workers with lower skills (who are often relatively easy to hire) while simultaneously increasing the need for those with higher level skills who are difficult to find. Some proposed solutions include re-introducing industrial arts programs in high schools (which may induce students to pursue CNC training post high school), broadening training opportunities in technical colleges for skilled manufacturing, and employers using testing to identify inexperienced potential employees who may have the aptitude for post-hire higher level training.

Reid Klion

Call Centers and Selection

Reid Klion — Thu, 02 Feb 2012 18:38:16 GMT

Assessments are frequently used to select call center personnel. There are several reasons for this. One is the sheer number of call center positions with some estimating that over 4 million people do this work in the US alone, not to mention millions more in offshore locations. Another contributing factor is the nature of call center work. On the one hand, a high level of customer service and accuracy is critical in addition to computer skills, attention to detail, problem solving, and multi-tasking. Complicating things, call center representatives are often asked to help confused, angry, or upset callers in a professional manner yet do so as quickly as possible because a frequent performance metric is number of calls handled. However, since the work is often routine and repetitive, it can become boring fairly quickly and lead to absenteeism and turnover unless the right employees are selected.

Fortunately, there are a number of assessments that have been developed specifically for call centers (and pan is fortunate to distribute a number of them). Some look at personality factors such as conscientiousness, customer service attitude, and reliability. Others, which are designed to test an individual’s call center skills, actually place the individual in the simulated role of a call center representative.

A dynamic to consider when selecting call center personnel is that given the substantial cost in reputation that negative client experiences can bring coupled with large number of people employed in these positions is that even relatively minor improvements in the hiring process can have a substantial impact upon the bottom line. A final consideration is that unlike many other jobs, call centers can often readily provide accurate and meaningful metrics about call center performance with indicators such a number of calls handled per shift, sales, and caller satisfaction surveys. As a result, it often can become apparent quite readily if a selection system is working and how it might be adjusted to further optimize the process.

Reid Klion

So Is This Test Valid?

Reid Klion — Fri, 27 Jan 2012 19:51:42 GMT

This is something we are often asked. In answering it, the critical issue to bear in mind is that validity has to do with the conclusions, inferences, or decisions we want to make based upon the assessment, not the assessment itself. Consider a typing test. If it is reasonably constructed, it is pretty likely that it measures typing speed and accuracy. However, is it valid? Without knowing what the test is going to be used for, we don't know. If we are using it to select administrative assistants, we are likely on the right track if we assume keyboarding is important for job success in this role. However, by the same token, it is likely to be invalid for selecting groundskeepers.

Commercially available assessments have technical documentation that details how the test measures what it is designed to measure. And this is certainly something that enters into the validity equation. However, the key question about validity has to do with the intended use of the assessment. The underlying question really isn't whether a test itself is valid but rather Valid for What?

Reid Klion

Talent Selection and the Super Bowl

Reid Klion — Wed, 25 Jan 2012 16:35:37 GMT

The Super Bowl, coming up in about a week and a half, will be a re-match of the 2008 game with the New England Patriots facing the New York Giants. An interesting fact is how different the rosters of the two teams are today from four years ago. While the quarterbacks and coaches are the same, the Patriots only have 5 starters (of 24, counting the punter and kicker) from the 2008 team while the Giants have 9 remaining starters. (Going a bit further, there are only 7 Patriots and 16 Giants on the team roster in total today who were there 4 years ago.). While this is in part testament to the relatively short tenure of most players in the NFL (around 3.5 years on average) and, admittedly, two very good quarterbacks, it is even stronger evidence about the importance of selecting and training new talent. So while many of the individual players are different, the strength of the talent management skills of both these organizations is a constant thread.

Reid Klion