What is your Hiring Risk Tolerance?

[fa icon="calendar'] Feb 9, 2016 8:00:00 AM / by Deborah Lechner

Before offering a job to a prospective employee, most employers have reviewed the candidate’s resume, completed a thorough background check, completed a drug test, and perhaps even had a conversation with a reference or two. Each of these steps are taken in order to gain a true sense of how well the individual will meet the academic and character demands of the position. This knowledge is valuable, as it affirms that the investment in hiring this new employee is less of a risky move.

However, all too often, the capability of an individual to perform the ongoing physical demands of the position is overlooked. Once the discovery is made that the new hire lacks the physical capabilities to perform the expected duties, it is too late, and the results are often a windfall of financial burdens for the employer in the form of additional training, workers’ comp claims, and especially the expensive process of managing ongoing turnover.

Turnover: The Inherent Risk of Hiring a Physically Unprepared Employee

The Harvard Business Review cites that up to 80% of employee turnover is due to poor hiring decisions. That is a lot of responsibility that lands on the desk of the one who is tasked with hiring new employees. A survey by Robert Half showed that one-third (36%) of the 1,400 executives surveyed believed the top factor leading to a failed hire, aside from performance issues, was a poor skills match.

Not knowing if a new hire has the necessary physical skills to accomplish the requirements of the position creates a huge risk – one that your bottom line may not be able to tolerate well. Training magazine reported that recruiting for one new employee to replace an employee lost to turnover costs at least $3,500 annually. Additionally, each new employee requires on average 32 hours of training, which equates to more than $1,200 in training costs per employee.

How to Reduce the Risks of Hiring Turnover: Know the Job Criteria

Max Messmer, chairman and CEO of Robert Half International and author of the Human Resources Kit For Dummies, said, "Companies can’t afford hiring mistakes, which are costly and can erode staff morale. Finding the right match requires time and attention, and it’s something even busy managers need to make time for."

Often a bad hire happens because HR and hiring managers hire based on a job description rather than actual job criteria. Jean Gamble, a Human Capital Strategist and Recruitment Specialist, explained, "…often if you went to the people who actually perform the job, you’ll hear an entirely different description of what it takes to perform the necessary tasks than what’s posted in the job definition."

A study conducted by a member of the Tucson, AZ fire department indicated a shortage of qualified firefighters and a resulting immediate hiring need. This need arose largely from annual termination of over 20% of new recruits because they could not meet position performance standards… the job criteria. The study's author presented the solution of implementing pre hire Physical Abilities Testing (PAT) for new recruits before entry into the firefighter academy to help solve this dilemma and lead to a higher number of physically prepared firefighters able to effectively and safely perform their duties.

A well-designed, EEOC compliant Physical Abilities Testing program – one that will be effective in preventing bad hire workplace injuries and turnover – begins with a job criteria analysis to identify the essential functions of the position. Test screens that exactly match these functions and quantification of the physical demands of those functions are then established. The tests are formulated using validated testing methods and a clear pass/fail criteria to evaluate the ability of potential employees to meet those demands.

In a 2000 study, Gassoway et. al determined a reduced employee turnover and injury rate resulting in $88,286 in employer savings for the first year alone, with a return on investment of an astounding 6 to 1. Over multiple years, the financial savings from PAT implementation alone are huge.

Implementing pre employment physical abilities testing to determine if an individual can successfully perform the required criteria of the job being applied for is a solution that most businesses should consider, particularly if their employee positions require some level of manual exertion. Beneficial for both employer and employee, PAT alleviates much of the burden on those responsible for hiring employees, confers significant savings for employers, and increases safety and job satisfaction for employees… which all work together to significantly reduce the risk of turnover.

Physical Abilities Test Webinar

Topics: Workplace Safety

Deborah Lechner

Written by Deborah Lechner

Deborah Lechner, ErgoScience President, combines an extensive research background with 25-plus years of clinical experience. Under her leadership, ErgoScience continues to use the science of work to improve workplace safety, productivity and profitability.