Overcoming the “Talent Shortage” With Analytics

by Gilbert Carrara, MD

Despite an enormous pool of unemployed talent looking for work, some of the best and largest companies in the United States (and even worldwide) are consistently unable to find high-quality talent. Why? Across industries, executives and HR leaders are realizing that they are often poorly evaluating employees, leading to undervaluing or mis-valuing their teams.

The tendency to misjudge employees’ value may originate in outdated hiring and performance evaluation methods. A mountain of scholarly literature shows that the intuitive way companies now judge professional potential is rife with snap judgments and hidden biases, rooted in our upbringing or in deep neurological connections that doubtless served us well on the savanna but would seem to have less bearing on the world of work.

A survey by Corporate Executive Board, a research firm in Virginia, showed that 74% of the 500 hiring managers surveyed reported that their most recent hire had a personality “similar to their own.” Another study from Northwestern University that analyzed the recruiting, interviewing and evaluation practices of professionals from elite investment banks, consultancies and law firms concluded that among the most important factors driving their hiring recommendations were shared leisure interests.

More and more organizations are beginning to see how damaging these unscientific methods of evaluation can be for company performance, and big data and analytics providers have responded by developing new solutions specifically designed for talent assessment. For example, Knack, a company funded by Israeli entrepreneur Guy Halfteck, designs tests that examine specific cognitive skills that employer’s desire by drawing on the latest cutting edge behavioral and scientific research. These skills range from pattern recognition to emotional intelligence, risk appetite and adaptability to changing situations.

Google’s understanding of the promise of analytics for talent assessment is probably better than anybody else’s, and the company has been changing its hiring and management practices as a result of its ongoing analyses. For example, Google no longer uses brainteasers in their interviews, because they do not correlate with job success; GPA is not considered for anyone more than two years out of school, for the same reason—the list goes on. But for all of Google’s technological enthusiasm, these same practices are still deeply human. A real, live person looks at every résumé the company receives. Hiring decisions are made by committee and are based in no small part on opinions formed during structured interviews.

While tried-and-true methods of evaluating candidates for the necessary personality traits and culture fit shouldn’t be completely abandoned, HR executives and CEO’s around the globe need to start injecting analytics into their hiring processes and performance management programs. Corporate leaders should be making sure that they are developing and rewarding employee skills and valuing employees who are there to help achieve their organizations’ business goals. By adapting analytics and new methods of assessment, leaders will build higher performing teams with decreased employee turnover and increased employee engagement.