PsyMax Solutions Newsletter: Trend Watch
Driving Profits with Better Hiring
In This Issue:
- Driving Profits with Better Hiring
- Assessments Used to Guide Employee Coaching
- Support For Others Can Drop Over Time
- PsyMax On The Road
- Sign Up Today for the PsyMax Webinar on June 14th
1. Driving Profits with Better Hiring
The human resource department can be a profit center. Unfortunately most businesses haven't yet fully recognized the savings this function can generate or the impact HR can have on the bottom line.
The HR function is too often viewed on the expense side of the ledger versus the income side. The sales, customer service, purchasing and production departments are the traditional bread winners in most corporations. It is easy to see what they do and measure their impact on sales and profits. Functions like accounting and human resources traditionally have not been viewed as profit contributors. They're usually set up as cost centers.
The business world is changing. The old fashioned mindset of the human resource function being a cost center and not a profit center is as outdated as a typewriter. Our economy today is driven by brain power and knowledge. People now generate the bulk of revenues. And, people knowledge is a powerful competitive edge.
As the United States has shifted from a manufacturing based economy, the growth of service businesses has grown dramatically. Over 80% of all jobs in the United States are now in service businesses. Consequently, sales and profits are more dependent on the investment in people and less on equipment.
For those companies that already have embraced the value of their human resources function, the dividends have paid off immensely. According to a study in the Harvard Business School Press, (Michaels, Handfield-Jones & Axelrod) companies that invest in the selection and development of their talent yield 27% higher returns for their shareholders. These are the same companies that often appear on the "100 Best Companies to Work For" list. Their management has recognized the value of investing in human capital.
So, how does a human resources department help drive profits? The same way every other department does. By striving to improve the product and cutting down the amount of waste. By hiring the best people and minimizing turnover and bad hires. Hiring people with work style behaviors similar to a company's existing top performers increases overall output and improves bench strength. And, with the cost to replace an existing employee averaging more than 150% of base salary, reducing turnover can amount to significant savings and positively impact the bottom line.
The single most important task for today's HR managers is educating management on the value of human capital and on the contribution they can make to the bottom line. The decision making process for investments or improvements in the human resource area is typically three months and sometimes as long as nine to twelve months. By contrast, if a piece of equipment breaks down or needs to be replaced, the decision to fix that kind of problem is made within days and sometimes hours.
Shortening the decision making process, when it comes to investments in human capital, is essential to the success of every business today. And the sooner the human resource function is viewed as a potential profit center, the quicker HR managers can start contributing to the bottom line.
2. Assessments Used to Guide Employee Coaching
Helping an employee reach his/her full potential requires dedication on the part of an employee as well as some well directed assistance by a business coach. It has been our experience that today less than 20 percent of employee coaching is based on sound work style testing.
Coaching has been typically the result of a coach's own intuition and experience without the benefit of scientific or behavioral insight. However, the old ways are rapidly changing with the availability of new assessment tools, which can be used to guide the coaching process.
At large organizations, it is not uncommon for hundreds of managers and employees being coached at hundreds of locations nationally or even globally. How is all this coaching being shaped or evaluated? Management's challenge isn't just about accountability, but providing some scientific means to focus the coaching process.
Without the benefit of an assessment tool, for instance, employers would be slow to realize that a staff member or job candidate needs help with developing their creativity. With an assessment, such a weakness can be quickly identified and the coaching manager given specific ways to help the individual to develop more creative behaviors. The manager might encourage the person to brainstorm possible solutions to a departmental problem, to take an existing idea a step further, to consider potential consequences of an action from different angles or to get more involved in a dynamic team project.
Decisiveness is another aspect of an employee's profile that may be gauged through testing. If "indecisiveness" were to emerge as an issue, a coaching intervention might provide practice and feedback in analyzing problems in order to facilitate 'little decisions' as well as to emphasize the need for closure. Innovative coaching guidance that offers observable, measurable steps to improve a complex, mental task come to light as a result of a work style assessment.
If on the other hand, a candidate or employee tests strong in decisiveness it may pose a different challenge. The person may demonstrate a sense of urgency and the ability to respond quickly to issues. But if such a behavior is over-used it may become a weakness that encourages rash decisions or inordinate risk-taking. A work style assessment would alert the coach to this dimension and offer remedies that may not be obvious to an inexperienced or traditional coach. An assessment of a person's work style can provide hard data to complement a coach's soft skills.
Initially, coaching was primarily conducted by professional I/O psychologists and coaches in the upper tiers of a company. Today's competitive business environment has created the need for coaching to be conducted at every level of an organization. Consequently, coaching is now becoming the responsibility of most front line managers which has created a need for a cost-effective, methodical approach. Managers who may not have been trained in coaching can now easily get the help they need with today's new on-line behavioral assessment tools.
Psychological tests have comparable predictive validity to some medical tests. And while some companies continue to use the lengthy 360-degree feedback to help their coaching efforts, more efficient tools like PsyMax's Work Style Assessments are gaining popularity because they are a cost effective and practical results oriented tool for virtually every level within an organization.
Today's new assessment methods can assist managers in improving an individual's on-the-job performance as well as his/her overall contribution to the organization. With new tools like PsyMax's Work Style Assessment inventory, coaches don't have to rely on guesswork.
3. Support For Others Can Drop Over Time
PsyMax recently conducted a study of more than 2300 individuals and discovered that the longer some individuals work for a company the more likely they will become less supportive of others in the workplace.
The decrease in supportive behavior as a person's job tenure increases was revealed after an in-depth analysis of fifteen different work style behaviors of executives, managers and other employees.
After three to five years on the job, there is a definite decline in how a person interacts with co-workers. After ten years the decrease is even more dramatic. Although one would expect a person's work style to stay the same, our findings indicate that as someone stays longer on a job with a company his/her supportive behavior decreases over time.
A supportive person will listen, encourage and volunteer to help others without being asked. People who are on the high supportive behavioral track are usually cultivating and nurturing relationships, which are essential to building loyalty and trust with others.
While everyone experiences occasional periods of complacency at work, totally disconnecting from others in the organization can have serious consequences. Before you know it, you're viewed as being aloof and not very helpful or empathetic. Trust by co-workers can quickly start to fade away. Although someone may be doing an outstanding job for the company, because of his/her lack of supportive behavior, unfortunately others in an organization may not see it that way.
History is full of political figures that had the potential for greatness but never quite achieved it. A common denominator is they isolated themselves from a support network and lost the advantage of perspective and insight. Some people in this type of situation may not even understand what has happened to them. One minute they were on top of the world and the next they felt like they were headed for the trash heap.
People with great leadership skills usually have learned, the hard way, the importance of staying connected with those around them. They know how to ask questions, when to listen and be supportive of others. They've also learned the secret of monitoring their own supportive behavior skills.
4. PsyMax On the Road
PsyMax is exhibiting at the following conferences and trade shows. If you plan on attending any of these events please stop by our booth to say hello.
July 26
HR Star Conference
Cleveland, OH
October 4-5
HR Technology
Chicago, IL
5. Sign Up Today for the PsyMax Webinar on June 14th
Title: Hiring the Right Person for the Right Job with Assessments
Date & Time: Wednesday, June 14, 2006, 1:00pm EDT
Panelists: Dr. Wayne Nemeroff, CEO and founder of PsyMax Solutions, Dr. Charles Handler, President and founder of Rocket-Hire
Moderator: Shari Fryer, Global workforce consultant and President of Shari Fryer & Associates
Duration: 1 hour including Q & A
Description: This webinar will cover the following issues:
- New hiring challenges in a tight labor market
- How assessments can identify the right candidate
- The impact of proper hiring on the bottom line
About PsyMax Solutions
PsyMax Solutions offers an on-demand and integrated Human Capital website that provides world class assessment, interviewing, development, coaching, career, and 360° reports and programs for employees and managers. The PsyMax Solutions product suite is based on the work of psychologists who have conducted and written reports for over 20,000 managers. Our product suite generates results equal in quality, but at a fraction of the cost.
The PsyMax Solutions product suite is ready for immediate use without time-consuming and expensive consulting and IT set-up costs. In minutes you can create your own customized Human Capital website and use our integrated product suite to align your recruitment and development processes. To learn more about PsyMax Solutions, please visit us on the web at www.psymaxsolutions.com, e-mail us at info@psymaxsolutions.com, or call us at 866.774.2273.
