Hiring Solutions : Are You Suffering From 'Algorithm Aversion'?

It’s official! Machines outperform humans when it comes to making effective hiring decisions – according to the National Bureau of Economic Research.

The report assessed 15 companies and over 300,000 new hires in low skilled service sector jobs. Based on a series of questions focused on technical skills, personality, cultural fit and cognitive skills, candidates were recommended as green, yellow and red in order of potential. Candidates selected by an algorithm remained in the job longer than applicants chosen by recruiters and hiring managers. The vacancies had historically low retention rates, with the average worker lasting just 99 days, but researchers found that employees stayed in the job 15% longer when an algorithm was used.

Do these results suggest that HR is ineffective in making ‘sound’ hiring decisions?  

As always, it’s not that straightforward. What the research highlights yet again is the unconscious bias and subjectivity humans bring to the interview process. This issue was raised fifteen years ago in a study concluding that the initial judgements of an interviewer would ultimately determine the interview’s final outcome. It similarly suggested that these assumptions and judgements are ‘useless’.

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After making their initial assessment, hiring managers spend the remainder of the interview looking for evidence in the candidate's background, behaviour and responses to justify their first impressions. Objectivity in the hiring process is discarded and employers run the risk of a bad hire, often being drawn to people who are like themselves rather than select the strongest candidate.   

Hiring algorithms and HR

Hiring algorithms are growing in popularity for their ability to reduce hiring and turnover costs but shouldn’t be a straightforward replacement or instant fix for a company’s talent acquisition problems. When incorporated in the recruitment process, algorithms – or HR technology – improve its success.

A further historical study suggests that the most effective indicators of future performance are:-

  • work sample tests.
  • general cognitive tests.
  • structured interviews.

Recruitment software can expedite hiring by incorporating automated relevant tests in the initial screening process but the final decision is made by HR adopting an evidence based approach.

Subjectivity during interviews and candidate evaluation can be reduced by adopting the following strategies as part of the overall process:-

  • Know what you are looking for in your new hire. A candidate persona can improve recruitment success with positions recruited in volume or for one-off critical roles.
  • Reduce the stress levels of your candidates by outlining your procedure.  Explain the structure the interview will take to give them every opportunity to perform to their best of their ability.
  • Involving colleagues or managers will assist in making a final decision on culture fit, for example, but the more opinions sought the higher the level of unconscious bias in the final decision. Limit involvement to no more than three people, ie, HR or a recruiter, the line manager and their boss or a peer interviewer.
  • Structure the interview with behavioural (competency based) and situational questions. Use video interviews to eliminate bias during initial screening. Ask for examples of their reactions in specific circumstances rather than posting standard questions such as ‘what are your weaknesses?'.

Facing HR’s ‘algorithm aversion’

Algorithm aversion, most notable in its fear of big data, is a very real problem for HR as it grapples with complex workplace issues surrounding talent acquisition, employee engagement, turnover and productivity.

In his new report HR Technology For 2016 : 10 Big Disruptions On The Horizon Josh Bersin suggests we are in the ‘third wave’ of technology (which he describes as a clear progression from licensed software to cloud to mobile). As technology evolves, HR must overcome its aversion and continue to keep pace with changes in order to remain competitive and effective. In its simplest form, it begins with recruitment software.

According to Bersin, the success of today’s HR technology can be evaluated on the basis of how employees engage with those systems. Recruitment software should be simple to use and easy to fully integrate but most importantly HR must both utilise and engage with recruitment software.

Are you struggling to overcome your ‘algorithm aversion?’ Get started with recruitment software and recruit better people faster.

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