A Case for Using Assessments When Hiring

Call Center Customer Service Representatives

January 2012 Ryan Lisk Overview A customer service call center was experiencing typical annual turnover of 80%-120% for the position of customer service representative. The client currently has four call centers employing approximately 140 representatives. Customer complaints had reached an all-time high and productivity metrics had reached an all-time low. In September 2010, the call center management team decided to look at using an assessment to help determine if people with a better personality for the job were higher performers. At the time, the call centers culture had gotten bad enough for a common hiring criteria to be Will this person show up to work on time? The hiring process consisted of working with temporary staffing firms. The staffing firms screened candidates for the call centers and if they believed their resume, experience, and education were good enough, they sent them to the client for a hard-skills test and an interview. If the candidate passed the hard-skills/technical test and had a decent interview, he or she was hired. However, that model wasnt working. The industry turnover average was 50% and the best in the industry was 25%. Why was this organizations call center turnover consistently above 50%? Was the staffing agency sending their best? What was missing from the equation? The TriMetrix System The client had researched several assessment companies and decided to do a pilot study using the TriMetrix job matching system to see if they could make better hiring decisions. The client hired Lisk Associates LLC consulting firm in Lexington, Kentucky, a certified professional TriMetrix analyst, to administer the assessments and compare candidates for fit to the job. The consultants role at this point was twofold. First, create a benchmark for this job based on the key results/accountabilities that would help measure the behaviors, motivators, and personal talents necessary for superior performance. Second, after the new hires personal talent report was received, the consultant would give feedback on each candidate, with a hiring recommendation. The consultants recommendations were grouped into three categories: green, yellow, and red, depending on how well each individual fit the benchmark. Green would be considered a good fit to the job benchmark, yellow meant there would be some gaps allowing the client to discuss and decide if the gaps were something they were willing to live with, or train, or not, and finally red meant this persons talents were not as good of a fit to what the job required. The assessment did not measure good people or bad,
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right or wrong, there was no pass or fail. It did not measure intelligence or experience. When the client began using the results of the assessment for selection, the assessment was used for no more than 1/3 of their total selection criteria. The assessment met all the regulations of both the EEOC and the OFCCP. Pilot Phase Before implementing the system, the client first collected data on a pilot group, or control group. This group was compiled from candidates sent to the client by the recruiting firms. For the pilot phase, the client did not use the consultants input to assist in the selection process, as everyone in the pilot group that was taking the assessment had just been hired. Following are the overall pilot group numbers for the call center reps hired using the current model. Overall Pilot Group totals Total Number of Candidates Total Number of Hires Total Still Employed Total Resigned Total Terminated 64 64 25 13 26

100% of Total 39% of Total 33% of Total Turnover 66% of Total Turnover

When determining the reason for turnover, the client had two categories: resigned or terminated. Terminated meant they werent doing their job; resigned meant any other reason. Employees who resigned left on better terms with the company. The client assessed these same 64 people during this pilot phase compared to the job benchmark. Of the 64 hires, the consultant gave these results: Category Green Yellow Red Total Number of Hires 14 18 32 Total % of Hires 22% 28% 50%

During the pilot phase, there are three distinct groups based on when they were hired. This is important to see the trends as time passes by. These are group 1, group 2, and group 3.

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Group #1 Short-term If employees in group 1 were still employed at the time data was cut off for this study, the minimum employment they could have had was 70 days and a maximum of 141 days. This group was hired August 2011. Group 1: Short-term group hired in August 2011 12 7 3 2

Total Number of Hires Total Still Employed Total Resigned Total Terminated

58% 25% 17%

For this group, there was 42% turnover within the first 140 days of hiring 12 customer service representatives. The consultant assessed this group and gave the following analysis. The average days column below shows how many days this particular group averaged on the job, and the turnover percentage column shows what percentage of this group the client lost. Group 1 Assessment Results Category No. of Hires Green 2 Yellow 2 Red 8
*

Avg. Days Employed 70 93 78

Turnover % 0 50% 50%

Yellow - 1 resigned after 46 days **Red - 2 resigned after 30 and 68 days; 2 were terminated after 9 and 95 days Group #2 Mid-Term Group Group 2 of the pilot group. If these people were still employed at the time the data was collected, their maximum employment could have been 309 days. This group was hired between February 2011 and April 2011 Total Number of Hires Total Still Employed Total Resigned Total Terminated 16 5 2 9

31% 13% 56%

For this group, and not surprisingly as time goes on, the turnover percentage goes up. For this group the total turnover percentage is 69%.

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Group 2 Assessment Results Category No. of Hires Green 1 Yellow 4 Red 11

Avg. Days Employed 11 95 155

Turnover% 100% 100% 54%

Green - *1 terminated after 11 days Yellow - **1 resigned after 69 days; 3 were terminated after 4, 151, and 157 days Red - ***1 resigned after 3 days; 5 were terminated after 18,18,77,77,and 87 days Group 3 Long-Term Group Group 3 of the pilot group. Employees in this group had the longest tenure and if they were still employed at the time of this study, the maximum employment they could have had was 449 days. This group was hired between September 27, 2010 and November 8, 2010. Total No. of Hires Total Still Employed Total Resigned: Total Terminated 36 13 8 15

36% 22% 42%

This group had the largest number of employees. Their total turnover was 64%. This group was a typical group with data collected just over one year ago at the time of the study. Heres a look at how these candidates fit the job benchmark from the consultant. Group 3 Assessment Results Category No. of Hires Green 11 Yellow 12 Red 13

Avg. Days Employed 293 181 217

Turnover % 54% 58% 76%

Green - 2 resigned after 197 and 53 days; 4 were terminated after 99, 107, 215, and 423 days Yellow - 1 resigned after 234 days; 6 were terminated after 3, 16, 30, 32, 38, and 107 days Red - 5 resigned after 51, 177, 220, 229, and 446 days; 5 were terminated after 2, 10, 16, 37, and 292 days Noteworthy in this group is that 4 of the 5 terminated employees the consultant had identified as red did not make it past 37 days. It was at this point the client began to see and feel the face validity of the assessment process.

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The Direct Hire Model After seeing the assessment results from Lisk Associates, the client now believed they could recruit and hire better for this position. Beginning in February 2011 they began using a direct hiring model. Some of the changes involved their staff now doing the recruiting, reviewing resumes, and encompassing the TriMetrix assessment. At the time of this study, the client had considered 114 total candidates for the position of customer service representative. Of those, the consultant gave the following results: Category Green Yellow Red Total No. of Candidates 35 42 37 Total % of Candidates 31% 37% 32%

The first benefit of this model is quickly illustrated. The percentage of overall candidates making it to the final stages of their selection process that did not fit the jobs key accountabilities dropped from 50% to 32%. The reason this happened is because the client began asking a few simple behavioral-based interview questions as part of their initial recruiting process helping eliminate more of the candidates who just werent a good fit for this position. This particular job calls for a person to be able to sit on the phone for long periods of time, solving problems for upset customers. In essence, the best call center representatives are able to listen down a customer. It is not luck that determines if someone can do that part of the job. In fact, we know some people are more uniquely wired to do that job. We would say their natural behavioral style is a better fit for the job.

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The two graphs below are an illustration of the vast difference of candidates the client started to bring in once they understood how the job got done. The graph on the left is a look at the natural behavioral style of the 64 hires sent by the staffing agencies. The graph on the right is the natural behavioral style of the 42 hires made using the direct hire model. Once the client started to intentionally look for people who fit the jobs behavioral style of a coordinator/supporter/relater, they upped their chances for making better hiring decisions. Looking at the half of the wheel that includes coordinators, supporters, relaters, and persuaders, the pilot group had 70% of their hires in that half while the direct hire group had 88%.

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Overall Direct Hire Model Data Total No. of Candidates Total No. of Hires Total Still Employed Total Resigned Total Terminated 114 42 41 1 0

37% of candidate total 98% of total hires 2%

Similar to the pilot group, the direct hired model has 3 distinct hiring groups based on time.

Group 1: Short-term This group of candidates was hired in August 2011. At time of this study, employees had a minimum of 45 days on the job, and a maximum 92 days. This group can be compared to the data of Group 1 of the Pilot Group.

Total No. of Candidates Total No. of Hires Total Still Employed Total Resigned Total Terminated

45 20 20 0 0

44% of total candidates 100%

Here are the assessment results from the consultant. Category Green Yellow Red No. of Candidates 11 20 14 No. of Hires 8 8 4 Avg. Days Employed 85 67 71 Turnover % 0 0 0

Group 2: Mid-Term This mid-term group was hired on June 13, 2011. If employees were still employed at the time of this study, their maximum employment would be 190 days. Total No. of Candidates 23 Total No. of Hires 10 43% of candidates Total Still Employed 10 100% of hires Total Resigned 0 Total Terminated 0

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Here are the assessment results from the consultant Category No. of No. of Hires Candidates Green 8 6 Yellow 8 3 Red 7 1

Avg. Days Employed 190 190 190

Turnover % 0 0 0

Group 3: Long-term The long-term group was hired on May 2, 2011. If employees were still employed at the time of this study, their maximum employment would have been 232 days. Total No. of Candidates Total No. of Hires Total Still Employed Total Resigned Total Terminated 46 12 11 1 0

26% of total candidates

Here are the assessment results from the consultant. Category No. of No. of Hires Candidates Green 16 7 Yellow 14 5 Red 16 0 Yellow 1 resigned 72 days.

Avg. Days Employed 232 200 N/A

Turnover % 0 20% N/A

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Trimetrix Measures The trimetrix tool measures three things: 1. Behaviors Discussed earlier and illustrated with the two wheels. The idea here is we want to hire people whose natural behavioral style fits what the job calls for the majority of the time. We believe people perform better when they can be themselves. 2. Intrinsic Motivators - Every job has intrinsic rewards to it besides a paycheck. In the case of the customer service rep, after benchmarking the job, we know that someone will be more engaged in this job if they inherently enjoy solving problems, helping other people, and following a system for living. We call these motivators theoretical (THE), social (SOC), and traditional (TRA). Here is a look at the overall group averages for these top three job motivators. Overall THE Avg. Overall SOC. Avg. Overall TRA Avg. Pilot Group 5.6 6.7 4.8 Direct Hire Candidates 5.6 6.7 4.9 Direct Hires 5.5 7.0 5.2 National Average 5.7 5.7 4.5 3. Customer Service Talents/Soft Skills - Its often been said that you hire for hard skills and fire for soft skills or attitude. Trimetrix measures 23 soft skills and the job benchmark identified twelve soft skills necessary for superior performance in this job. The soft skills measured were: Customer focus Decision-making Diplomacy and tact Empathetic outlook Goal achievement Interpersonal skills Objective listening Personal accountability Resiliency Results orientation Self-starting Self-management

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Below is a chart of the soft skill average scores for the different groups. Pilot Group Total Overall Soft Skill Average 7.40 Overall National Average 7.50 Avg. of Those Still Employed 7.43 Avg. of Those Who Resigned 7.31 Avg. of Those Terminated 7.34 Direct Hire Group Total Overall Soft Skill Average Avg. of those not hired Avg. of those hired Overall National Average Avg. of Those Still Employed Avg. of Those Who Resigned Avg. of Those Terminated

7.55 7.45 7.73 7.50 7.73 7.60 N/A

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Return On Investment This job pays about $12/hour. The client calculated that their cost of turnover in hard costs to replace a customer service representative is $17,000 each. With 140 reps at 80% annual turnover, they had an annual turnover cost of $1,904,000. Implementing the new direct hire model turnover has decreased. Comparing their current turnover to the rate of 80%, the direct hire model has documented savings of $544,000 (42 hires at 80% turnover = 33 1 actual turnover = net 32 x $17,000). The added cost of using the trimetrix system: At the time of this study, the client had created a job benchmark ($2000) and had 178 people take the trimetrix personal assessment ($282 each) which includes the pilot group for a total investment of $52,350. A 9.4x hard cost savings has been realized, or a 940% ROI. Other Savings In addition to the hard costs associated with turnover, as they have hired better fits to the job, performance has increased. Absenteeism and tardiness occurrences are dropping, productivity metrics are on the rise, and probably most importantly, service levels are increasing. All of these measures help the bottom line but are not as easy to calculate in this case study. According to company representatives, the most immediate benefit was that 70-80% of the candidates being interviewed are now being hired which translates into more efficient staffing processes and time savings of the interview panel. Feedback from the customer representative trainers is that the new hires made using the trimetrix system are different from the individuals who came from the staffing firms in that they are more attentive in the training classroom, engaged in the learning objectives, and more focused on learning their new position with the company. While soft cost savings can be hard to quantify, what we do know is the client can feel these savings in operational performance results and fewer employee issues.

To learn more about what Lisk Associates, LLC can do to make you and your organization more valuable, contact Ryan Lisk. ryan@liskassciates.com 859-421-7966
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