Improving Hiring Performance: The Business Case for Virtual Interviewing

Transcription

1 Improving Hiring Performance: The Business Case for Virtual Interviewing A Business Optimization White Paper by: Paul Stockford Principal Analyst Saddletree Research Kevin Hegebarth Vice President, Marketing HireIQ Solutions, Inc North Scottsdale Road, # Cambridge Square, Suite A Scottsdale, Arizona Alpharetta, Georgia T: T: E: paul.stockford@saddletreeresearch.com E: kevin.hegebarth@hireiqinc.com W: W:

2 p. 2 Table of Contents EXECUTIVE SUMMARY 3 INTRODUCTION 4 BACKGROUND 4 THE RECRUITING PROCESS 5 WHAT IS VIRTUAL INTERVIEWING? 6 TEXT- RESPONSE QUESTIONS 7 VOICE- RESPONSE QUESTIONS 7 CANDIDATE SCORING 7 BENEFITS 8 ATTRACTING MORE APPLICANTS 8 TIME AND COST SAVINGS 8 REDUCED TIME- TO- FILL 10 IMPROVED CANDIDATE QUALITY 10 INTERVIEW CONSISTENCY 10 RECRUITER AND STAKEHOLDER COLLABORATION 11 RECRUITER CALIBRATION 11 CONVENIENCE 11 ADOPTION AND CHANGE MANAGEMENT 12 AFTERWORD 13 ACKNOWLEDGEMENTS 14 ABOUT THE AUTHORS 14 ABOUT SADDLETREE RESEARCH 15 ABOUT HIREIQ SOLUTIONS, INC. 15

3 p. 3 Executive Summary Effective customer service operations starts with hiring people with the right communication, technical, critical thinking and language skills. Many organizations use telephone interviews early in the recruiting process as a way to observe some of these characteristics and filter out those candidates who don t adequately demonstrate them. However, customary recruiter-led telephone interviewing can be cumbersome, time consuming, inefficient and can actually miss some better-qualified candidates. Virtual interviewing, an on-line media-rich web and voice response technology, can overcome many of the pitfalls of recruiter-led phone interviews while greatly expanding the potential pool of applicants available to the customer service organization. Automating the interviewing process will reduce recruiting costs and make recruiters more effective and valuable to the organization; and improve overall business performance metrics including employee retention, sales, service and customer satisfaction objectives.

4 p. 4 Introduction The process of hiring customer service professionals, whether in the commercial contact center, retail store or bank branch, often includes a telephone interview early in the recruiting and hiring process. This manual process frequently means that recruiters spend significant time and multiple contact attempts to schedule and conduct these phone interviews. This unnecessarily elongates the hiring cycle and often overlooks well-qualified candidates who might not be available during a recruiter s normal working hours. A novel alternative to manual, recruiter-led telephone interview using media-rich web and voice technologies can greatly streamline this process and provide additional benefits to the key stakeholders in the hiring process. Saddletree Research has a long history of conducting objective analysis of key trends in the customer service industry. Our research consistently identifies the recruiting and interviewing process as a prime example of a process that is inefficient, rife with inconsistencies that could benefit from the application of technology. We believe this process could be dramatically improved by the use of virtual interviewing technology. Virtual interviewing has the potential to dramatically improve the customer service hiring process, reduce the turnover that continues to plague the industry, improve sales and service performance and reduce the costs of recruiting and hiring customer service positions. Background Consider, for example, the commercial contact center environment. Companies operating call centers typically need a near continuous stream of well-qualified applicants either to satisfy the growth needs of the business or to replace agents who have left the business in the course of normal turnover. Although agent turnover rates fluctuate in response to business or economic conditions, it has averaged about 35 percent per year across all vertical markets. In a modestly-sized call center of 1,000 agents this average turnover rate translates to 350 new agents that will need to be hired each year just to replace those who leave. Given our estimate of an average recruiting and on-boarding cost of $6, per agent, the annual cost of agent turnover in our example is $2,275,000. This does not include the soft costs associated with lost productivity, ramp-up and morale. Increase the size of the call center operation, the turnover rate, or both and these costs become formidable. Any savings in this area goes directly to the company s bottom line, improving profitability and the company s ability to invest in its business. Although a call center example has been used to illustrate this point, this

5 p. 5 calculus is applicable to just about any customer service or high-volume hiring environment. The Recruiting Process The process for filling open customer service positions is fairly common amongst organizations. Normally a candidate completes an application and submits a resume detailing his or her experience and qualifications. The recruiting team evaluates these applications and selects a subset of applicants to participate in the interviewing stage of the hiring process. With many customer service positions the first interview is often conducted via telephone. When hiring large numbers of applicants it is not practical to try to schedule in-person interviews with every applicant, so the phone interview is normally used to verify the applicant s basic qualifications, establish the basic requirements of the position and validate the applicant s desire for the position, and to gauge the applicant s customer service skills by listening to his or her vocal tone, energy, enthusiasm, personality and how he or she might handle some types of calls they might expect to receive in the normal course of business. Scheduling the telephone interview is often more difficult than it sounds. Recruiters frequently attempt to contact an applicant multiple times via and telephone, for example over several days just to schedule a mutually agreeable time for the interview. Many applicants are already working during the times a recruiter is available to conduct the interview. These candidates are often overlooked as a result. While the telephone interview itself is normally straight-forward, it is fraught with potential pitfalls that often result in the hiring of sub-optimal candidates: Many positions, especially those with business process outsourcers, need to be filled quickly so time is of the essence to evaluate candidates and conduct their interviews. Under normal circumstances, it may take as long as three weeks or more from the time a candidate submits their application to the date of hire. Once the phone interview begins, a recruiter may conclude that the candidate s communication and verbal skills are sub-standard, but will carry the interview through to conclusion as a courtesy to the applicant. Each of these interviews may take 20 minutes or more, even for marginally-qualified candidates.

6 For organizations with many recruiters, each may evaluate candidates slightly differently, resulting in uneven and unpredictable applicant performance once hired. Results of telephone interviews are rarely shared with key stakeholders; i.e., the hiring manager, so recruiters may be slightly out of sync regarding what constitutes a quality candidate. While telephone interviewing remains a valuable step in the overall hiring process, the use of technology can help mitigate these issues and still deliver high-quality hires to the customer service operation. One such technology is virtual interviewing. What is Virtual Interviewing? Virtual interviewing is a media-rich web and voice response screening solution that can effectively augment or replace traditional telephone interviewing early in the recruiting and hiring process. Applicants take part in a virtual interview by merely accessing a web link provided to them either as part of the job posting or in an invitation from the recruiting organization. An applicant needs only to have a telephone and access to a computer to complete their interview. Since these interviews are administered via the web, applicants can complete the interview at their convenience often during non-working hours and recruiters can review and score them when their schedule allows. Virtual interviewing applications are normally provided as a software-as-a-service (SaaS) model, which means it is always on and working even when the company s recruiters are unavailable. From a purchasing standpoint, virtual interviewing is normally provided under monthly or annual subscription license arrangements so the company incurs no capital expense to use the application. Virtual interviews can be created to capture the all the key information that is normally included in a live telephone interview. A candidate s responses to all the virtual interview questions are recorded for a recruiter to review and evaluate at a later time. And, since many customer service positions have unique requirements, the virtual interview is completely customizable to present the questions that are most relevant for the position. Virtual interviews are normally conducted in two parts, as described below. A candidate who successfully completes the first part is automatically presented with the second part. p. 6

7 p. 7 Text- Response Questions The first part of a virtual interview normally consists of a series of text response questions that they applicant will answer using their computer. They are normally configured to collect information regarding the candidate s basic qualifications and knowledge about the requirements of the job. Text-response questions can also be created to test a candidate s math, grammar and critical thinking skills, which will provide an early assessment of his or her suitability for the position. Furthermore, one or more questions can be configured to be a knockout question in which an incorrect answer would cause the interview to conclude after the textresponse segment. Candidates that are knocked out are not presented to recruiters for subsequent review and scoring. Voice- Response Questions Those candidates that successfully pass the text-response portion of the virtual interview progress to the voice-response segment. This portion of the interview requires the applicant to have access to a telephone or other VoIP technology like Skype in order to record their responses to questions as they are presented. The telephone is used to connect to interactive voice response technology that allows the candidate to hear pre-recorded spoken questions and record his or her spoken responses. Voice-response questions can be configured in a wide variety of ways. For example, one question might be, Please describe what you consider to be excellent customer service. The applicant can speak naturally when answering the question and the response is recorded for review. These voice-response questions can also be configured to present customer interaction scenarios that the applicant is likely to encounter on the job. The applicant might, for example, be instructed to respond to what he or she hears as if he or she was interacting with a live customer. In this scenario the applicant might hear something like, This is the third time I ve called with this billing problem and I m getting very frustrated. Can you please help me or transfer me to someone who can? The applicant would be able to record his or her response to this simulated customer inquiry. Candidate Scoring The applicant s text-response and voice-response answers are stored and cataloged based upon the applicant s name and the position applied for. One or more recruiters can review, evaluate and score the applicant s responses and decide whether the applicant is to be advanced to further stages in the hiring process or declined and removed from further consideration.

8 p. 8 Benefits Virtual interviewing can offer several significant benefits to the customer service organization. The following section describes some of the benefits we believe are likely to be realized by organizations implementing a virtual interviewing solution. Attracting More Applicants The customary recruiter-led telephone interviewing model requires that a candidate submit an application and perhaps a resume. The recruiter reviews the application and, for those candidates deemed qualified enough on paper, attempts to make contact, often with varying degrees of success, in order to schedule and conduct a live interview. This tedious and time-consuming process often leads to frustration and the abandonment of efforts for recruiters who are unable to reach candidates. By hosting the virtual interview online, each potential candidate has access to the interview without regard to recruiter availability. Applicants have unfettered access to the interview, providing them the opportunity to carefully review the job requirements and decide whether or not to proceed. Those who aren t particularly interested never even start their interview and are therefore never presented to a recruiter for evaluation. The corollary benefit to the virtual interview is that the applicants who click on the web link tend to be more motivated and are, therefore, more desirable. Time and Cost Savings It can take five minutes or less for a recruiter to review and score a virtual interview depending on the number of questions and complexity of the interview itself. Furthermore, those candidates that do not successfully answer all the knockout questions are not presented to a recruiter for evaluation. By contrast, recruiter-led telephone interviews would require the recruiter to spend time with an otherwise unqualified candidate. Depending on the number of positions to be filled and the customary interview:hire ratio, defined as the average number of applicants that are interviewed for each position filled, the recruiter labor savings can be substantial. There are two ways to measure this:

9 Recruiter time to conduct interviews. The less time recruiters spend conducting interviews, the more they have available for higher-value activities; Recruiter cost to conduct interviews. Related to the time savings factor above, the less time recruiters spend on interviews translates to a decrease in the cost per interview. The following table compares the recruiter labor costs associated with virtual and recruiter-led interviewing. Using the operation described at the beginning of this paper, this model assumes that 350 positions per year need to be filled and that an average of 6 interviews are conducted for each position filled. p. 9 Virtual Recruiter-Led Open Requisitions to Fill Interview:Hire Ratio (n:1) 6 6 Total Number of Interviews to be Conducted 2,100 2,100 Contact Attempts per Candidate - 3 Total Contact Attempts - 6,300 Time Required Per Contact Attempt (minutes) - 2 Total Minutes to Reach Candidates for Phone Interview N/A 12,600 Total Hours to Reach Candidates for Phone Interview N/A 210 Total Number of Interviews to be Attempted 2,100 2,100 % of Candidates to be Reviewed by a Recruiter (Note 1) 70% 50% Number of Interviews Actually Completed 1,470 1,050 Average Time Required per Phone Interview (minutes) 5 25 Total Time Required to Conduct Interviews (minutes) 7,350 26,250 Total Time Required to Conduct Interviews (hours) Loaded Recruiter Labor Rate $30.00 $30.00 Total Recruiter Labor Cost $ 3, $ 13, Source: HireIQ Solutions, Inc.

10 p. 10 Note 1: With virtual interviewing, a percentage of candidates will self-select out of the interview process and fail to complete an interview or will be disqualified through one or more knockout questions. Traditional recruiter-led telephone interviewing typically results in a relatively low percentage of candidates reached. Reduced Time- to- Fill Time-to-fill, defined as the interval between when a job is posted and when the desired number of positions have been filled, is a very important metric. This is especially true with business process outsourcers and customer service organizations that customarily engage in seasonal hiring. In these cases, quality of hire is sometimes inadvertently overlooked in favor of getting the desired number of employees hired. This practice tends to exacerbate the turnover problem, especially in the critical 90 days after hire when a new employee is completing training and is beginning his or her live customer service work. In the case of recruiter-led interviewing, it is not unusual for the time-to-fill interval to be measured in several weeks since the recruiter is actively involved in each stage of the process. With virtual interviewing, the time-to-fill interval can be trimmed to one or two days since recruiters personally get involved only after an applicant has successfully completed their online interview. Improved Candidate Quality We believe that applicants who participate in a virtual interview tend to be more motivated and better qualified than those who are hired from recruiter-led interviews. This is partly attributable to the fact that candidates need to take a more proactive role in their recruitment. Not only do candidates have to complete the application and send their resume, they also have to initiate the interview on their own. As a result, recruiters have a higher quality pool of applicants from which to select candidates. Interview Consistency Since virtual interviews are administered online using pre-determined questions in a proscribed order, each interview is conducted in exactly the same way giving each candidate a level playing field. Some positions may require that certain questions be asked in a specific manner for compliance purposes. Virtual interviewing assures this is done on a consistent basis. Furthermore, any recruiter bias that may emerge, however inadvertently, is completely removed during the interview process.

11 p. 11 Recruiter and Stakeholder Collaboration It s not enough for a hiring entity to merely send a written requisition to the recruiting group and hope that all nuances of the position are adequately met. It is likely that a simple requirement such as excellent communication skills will be interpreted differently between the recruiter and the hiring manager. All virtual interviews are recorded and stored for review and evaluation by all interested parties. They can be shared between the recruiting suite and its stakeholder to ensure both are in agreement when it comes to the qualities the hiring manager is looking for in a candidate. This further strengthens the relationship between the two organizations and increases the overall value that the recruiters bring to the organization. A corollary benefit of sharing these recorded interviews is that the hiring manager can use them to form the foundation for a subsequent in-person interview, if one is conducted, and/or early stage coaching. Knowing an applicant s customer service knowledge and skill level in advance can help focus employee development on those skills that need the most work while reinforcing the skills the applicant already possesses. Recruiter Calibration In large organizations, where many recruiters may evaluate applicants for the same position, ensuring consistence and objectivity in the way that the recruiters evaluate candidate characteristics is vitally important. Inconsistent and uneven hiring is often a product of differing views of the key attributes of the position. As previously mentioned, virtual interviews are recorded and stored so they can be reviewed and evaluated by one or more recruiters. Many recorded applications include a scoring form where each recruiter can score the applicant across one or more dimensions. In much the same way as quality assurance analysts are calibrated on the call center floor, the recruiting suite can use the applicant evaluation form results to ensure each recruiter evaluation aligns with the expectations of the hiring organization. Convenience Virtual interviewing technologies are typically hosted in the cloud which means they are always on and available to applicants and recruiters alike. For the applicant, this means that he or she can complete their interview at a time that is convenient for him or her, even at a time when the recruiter may not be available. Experience to date indicates that a relatively large proportion of candidates (upwards of 35% in

12 p. 12 many cases) complete their interviews during off hours. Recruiter-led telephone interviewing would miss these applicants. 37% of all Candidates 38% of Advanced Candidates Conducted their interviews outside of normal working hours Furthermore, virtual interviewing is more convenient for the recruiting staff as well. Recruiters can schedule blocks of time throughout their day specifically to review and score recorded interviews. When their day is more predictable, recruiters can me more efficient and effective, providing greater value to the overall organization. Adoption and Change Management There is a natural resistance to adopting technologies that purport to improve efficiency, which has long been code for reduction in force. After all, conventional wisdom says if technology can do the same job as a human, what use will there be for the human in the process? When it comes to virtual interviewing, this is specious thinking. While virtual interviewing has been shown to dramatically reduce the time it takes to review, evaluate and score an applicant, the time savings should be construed as a license to perform higher-value tasks with the staff already in place and not as rationale for reducing staff. One application of this time savings could be to review, evaluate and score more interviews per unit of time, thereby increasing the number

13 p. 13 of viable, high-quality candidates in the hiring pool. The value of the recruiting organization is significantly raised as a result. Others may balk at the perceived additional work in involved in creating the virtual interviews. In actuality, a well-formed, comprehensive virtual interview can be created in approximately 30 minutes or about the same amount of time it takes to create the original hiring requisition and to develop the initial telephone interview script. Afterword Despite the implementation and adoption of technology that has characterized the last 30+ years in the contact center industry, recruiting and hiring has clung steadfastly to labor-intensive employee selection processes. The time has come for the contact center hiring process to catch up to the rest of the operation in terms of utilizing technology in order to maximize efficiency and minimize costs. Solutions such as virtual interviewing are making that possible. Improving recruiter effectiveness and efficiency will continue to be of paramount importance in the process of selecting and hiring customer service representatives. It can reduce the time it takes to place qualified candidates, improve the quality of candidate hire, increase overall sales and service performance, and reduce employee attrition. Each of these has downstream benefits of improving the business performance of the organization and increasing customer satisfaction and retention. Virtual interviewing can yield myriad benefits for customer service organizations. The recruiting function can find itself as a more strategic business partner to its stakeholders by presenting better qualified candidates more quickly and efficiently. Virtual interviewing reduces the time spent interviewing candidates thereby leaving recruiters free to conduct higher-value tasks for the organization. Any organization engaged in high-volume hiring would be well-served to seriously consider adding virtual interviewing to its recruiting and hiring process.

14 p. 14 Acknowledgements The author would like to thank HireIQ Solutions for underwriting this white paper. About the Authors Paul Stockford is Founder and Principal Analyst of Saddletree Research. A 22-year industry veteran, Paul has authored articles on telecommunications, contact centers, and customer service for several major industry journals in the U.S. and Europe. He currently authors the monthly View from the Saddle column in Contact Center Pipeline magazine. He is widely quoted in business and general interest periodicals, and has held positions on the Editorial Advisory Boards of several magazines in the U.S. and Europe. Since 2008, Paul has been an active member of the of the 501(c)(6) not-for-profit National Association of Call Centers (NACC), an offshoot of the Call Center Lab at The University of Southern Mississippi, first as a member of its Advisory Board and subsequently as Research Director and a member of its Board of Directors. His association with NACC provides Saddletree Research with access to over 30,000 end-users as the basis for research that is published in several reports and briefs each year. Paul also volunteers his time as the editor of publications for the non-profit organization Veterans to Work (V2W). The mission of V2W ( is to help find veterans of military service, particularly service-disabled veterans, employment in suitable and fulfilling career fields, one of which is customer service in the contact center industry. A veteran himself, Paul is particularly dedicated to the cause of helping returning veterans resume a normal, productive life. Kevin Hegebarth is Vice President of Marketing and Product Management for HireIQ Solutions, Inc. He is a frequent contributor to industry publications and has spoken at numerous industry events on the topics of workforce acquisition and optimization, the role of social media in customer service, and innovative human capital management strategies. He is an AIPMM certified product manager and is a co-inventor on two U.S. patents.

15 p. 15 About Saddletree Research Saddletree Research was founded in 1999 by veteran telecommunications industry analyst Paul Stockford with the objective of providing leading-edge industry information on contact center market segments that are new, emerging and/or have high growth potential. Based in Scottsdale, Arizona, Saddletree Research provides communications industry research including analysis of market trends, issues, technologies, and companies in the contact center, Customer Relationship Management (CRM), and emerging communications markets such as social media. About HireIQ Solutions, Inc. HireIQ Solutions, Inc. helps customer service organizations improve hiring decisions, reduce recruiting costs and increase talent performance using its proven predictive performance technology. Companies using HireIQ s hiring optimization products report reduced time-to-fill, better-qualified candidates presented during the hiring process, and increased employee retention. Employees hired using HireIQ s suite of talent performance optimization products demonstrate increased speed to competency, reduced attrition and improved sales and service performance. HireIQ is a privately held company based in Atlanta, GA. For further information, please visit Follow HireIQ on Twitter at

16 p. 16 This white paper is provided to you courtesy of HireIQ Solutions, Inc. HireIQ s hiring optimization suite includes InterviewIQ, its virtual interviewing application, and LanguageIQ, its English-language fluency and proficiency solution. HireIQ uses rich media, web and voice response technologies to automate the earlystage interviewing process, resulting in better-qualified candidates presented during the hiring process. Employees hired using HireIQ s hiring optimization suite demonstrate increased speed to competency, reduced attrition and improved sales and service performance. HireIQ is a privately held company based in Atlanta, GA. For further information, please visit Follow HireIQ on Twitter at HireIQ Solutions, Inc Cambridge Square, Suite A Alpharetta, GA USA