In 2012, KinderCare–which supports almost 30,000 employees at 1,400 childcare centers in 38 states–had not earned a profit in 14 consecutive quarters. To try to turn things around, former CHRO Wei-Li Chong and CEO Tom Wyatt decided to tackle one of the most important questions in the company’s nearly 50-year history: What makes Miss Hattie so great?
The teacher, whom the children refer to as Miss Hattie, has been with the company for more than 40 years, working in the same center, in the same community.
“We studied our culture and started to build a customized approach to selecting teachers who match our very best teachers, like Miss Hattie,” explains Chong, now president of the childcare and early-childhood-education organization based in Portland, Ore.
The company spent the next two years conducting face-to-face interviews nationwide with more than 700 of its “Miss Hatties,” as well as low performers, while partnering with Gallup’s human science practice to conduct focus groups with employees. Chong says attention to individual values and organizational culture was “paramount” and helped HR create a process that identifies applicants who share Miss Hattie’s values, which transformed its business and profits.
Unlike skills, values like honesty or respect can’t be taught and, oftentimes, they take a backseat during the recruitment process. However, some HR professionals are assessing candidate values early on in the hiring process by asking values-based questions or incorporating them into online assessment tools. By revealing a job seeker’s values both on and off the job, recruiters and hiring managers are better able to predict which candidates will thrive in their corporate culture, perform well and be more likely to stay.
New Dimension
Chong was determined to reverse the company’s financial troubles. Although the industry’s average turnover rate was in the mid-40-percent range, KinderCare’s was even higher, around 50 percent.
But before recruiters applied the Miss Hattie profile to new candidates, HR tested it in-house. Gallup crafted a 30-minute, online, values-assessment tool based on the profile, asked another 2,000 teachers to complete the survey and then compared the data to their performance evaluations. Would this new tool separate top performers from those who were average or low?
“The assessment worked because we’re digging into natural talent,” says Chong, adding that the assessment recommended job candidates who would succeed and identified those who wouldn’t. “We are adding a dimension that we believe is the most important: an individual’s natural talent.”
However, reaction to the assessment was mixed. Although more than 1,000 job candidates completed it every week, HR didn’t mandate that center directors hire recommended teachers. Instead, HR provided them with hard data about the assessment’s outcomes.
Chong says children at centers employing more than 75 percent of system-recommended teachers showed a four-month developmental advantage and a two-month advantage involving reading and math. Another 13 percent measured as gifted. At the same centers–more than 1,000 in total–teacher turnover fell by at least 10 percent and overall employee turnover dropped by 25 percent.
“We changed the rules of the game and had to help our center directors embrace this process,” he says, adding that assessments were also designed for other positions like center directors and division leaders. “Every year, we validate what’s happening with our recommends and non-recommends and give directors strong data that show that the tool continues to help them build great experiences.”
Values-Based Hiring
Over the past decade, HR at L.L.Bean developed a variety of behavioral-based interview questions that focus on values, which are housed in its online library and shared with hiring managers as needed.
The company’s core values include integrity, respect, perseverance, outdoor heritage, and safe and healthy living, says Sarah Cox, vice president of HR at the retailer that supports 5,100 global employees.
Cox says recruiters and hiring managers informally “gather evidence” about job candidates from the moment they meet. Do they love the outdoors? Do they have a kinship with what the company stands for? Do they demonstrate the company’s values in their personal life? Do they participate in community-service projects?
Over the years, Cox says, the company’s values have “infiltrated” the entire organization. That may help explain its low 10-percent turnover rate when compared to the retail industry’s global average of 13 percent, according to Staffing Industry Analysts.
But before the recruiting process even begins, Cox says, HR helps hiring managers better frame the overall experience by identifying values that are most important to them, their department and the role.
“Talking about [values] actively with the hiring manager in advance is helpful,” she says, adding that HR must allow managers flexibility to screen for other values they believe are important and reinforced by the organization. “There is something beautiful about that dialogue that generates outcomes that are very powerful, helpful and insightful. Having that really thoughtful, up-front conversation about what it is they’re thinking–not just about technical skills but in terms of values and culture–makes a big difference.”
Likewise, Zoom Video Communications recently began using behavioral-based questions to assess the values of job candidates and enhance engagement among its 1,000 global employees, explains Marta Paul, head of HR at the San Jose, Calif.-based company.
Zoom’s core value is caring–for oneself, co-workers, the company and community. Some interview questions may focus on volunteer projects, caregiving experiences or how candidates may have helped a previous co-worker complete a project.
Since friends often share similar values, the company supports a strong employee-referral program. Roughly 65 percent of new hires are employee referrals.
About eight months ago, HR held a contest challenging its 10-member recruitment team: Who can develop the best behavioral-based interview questions developed from a given set of values? Everyone in HR voted, and the questions were shared with the company’s leadership team. The winner received a $250 gift card.
Meanwhile, Paul says, whenever an employee leaves, Zoom’s CEO and founder, Eric Yuan, expects an HR report that explains what went wrong and changes that will be implemented to avoid similar, future scenarios. The company is on a fast hiring track; just three years ago, she says, it only employed 50 people.
“We have to learn from every person who failed,” Paul says, adding that this was a contributing motivator for applying values-based hiring. “We do exit interviews and look at all data points from managers and colleagues.”
To ensure that caring people are hired, Yuan mandated that all employees attend a one-hour webinar that outlines a white-glove approach to the candidate experience. Hiring managers learn creative ways to demonstrate the company’s values during recruitment and how HR’s interview questions can validate a qualified candidate.
HR is currently evaluating an applicant-tracking system called Plum, says Paul. Hiring managers complete the system’s employer assessment, which uses their responses to create an employee assessment that includes values-based questions. It then combines results from both surveys, giving applicants a match score and creating an instant shortlist for HR.
“If someone is not aligned to the leader’s heartbeat on what he wants the culture to be, there can be a loss,” Paul says, referring to employee turnover, which has dropped from 7 percent in 2017 to just over 3 percent this year. “It comes down to making sure that the messaging is so simple that it’s continued through every organizational hire, whether it’s a leader or individual contributor.”
Beyond an HR Initiative
Employees with mismatched values can be disruptive, disengaged or unethical.
Paul tells the story of a person who was hired before the values-based system was implemented. She says he was argumentative with co-workers and caused conflicts among employees and teams, creating a toxic environment. Paul says she believes he realized he didn’t fit the culture, and he soon quit.
Even cybersecurity can be at risk, says Tony Boyce, director of strategic solutions at Aon’s assessment and leadership practice in New York.
If mismatched hires are upset with your organization, he says, they can be careless, even “actively malicious” with sensitive information about the company or its employees. He believes values-based hiring helps weed out such individuals.
But HR can’t leave this process up to hiring managers. If they don’t receive training, or aren’t given the right toolset, they may hire candidates who match their own values, which might not reflect the broader organization’s values, adds Boyce. He recommends providing them with structured, values-based questions and describing what a good candidate looks like so they know what they’re looking for and can effectively and objectively evaluate candidate responses.
Boyce also suggests surveying customers to identify the company’s strategic differentiators. Show the assessment works by administering it to a diverse sampling of your workforce and then compare their responses against their performance evaluations. Prove that what you measured matters in terms of predicting employee performance, engagement and retention, he says.
However, assessments work both ways. They also alert candidates that they’re an unlikely fit, causing some to bail out early in the process. Place the assessment high up in the hiring funnel so your stretched resources focus on candidates most likely to “survive and thrive” in the job, says Boyce.
Avoid putting candidates through one-hour assessments without offering any feedback, he adds, noting it’s important to communicate and explain the process. Remember, you’re trying to sell your organization just as much as candidates are trying to sell themselves.
“Companies that get this wrong think of it as just an HR initiative,” Boyce says. “Companies that get it right say, ‘We defined our values, this is our culture, and we’re going to reinforce it every chance and in every way we can within our organization and make sure everybody in our organization knows what these values are and are living and ascribing to them.’ ”
Combine AI with Human Skills
While recruiters typically focus on a candidate’s past behavior or values, they need to go one step further.
Think ahead to the person’s next potential role, says Art Mazor, principal at Deloitte Consulting in Atlanta. Will their values work well in that job? The more they can focus on that, the better they can identify potential barriers and the intersection between the employer’s and candidate’s values.
HR can also incorporate artificial intelligence. Mazor points to chatbots, computer programs that simulate online conversations with people. The technology can analyze candidate responses and pivot to asking different questions to develop a candidate profile that helps recruiters better assess fit and predict a candidate’s success in the job.
Another emerging tool is HireVue, a video platform that analyzes how candidates speak, their phrasing and even their body language during interviews. Are they being honest? Do they appear uncomfortable addressing their experiences in a specific job? The program provides cues for recruiters on when to dig deeper around particular topics.
Based on responses from Deloitte’s recent Global Capital Trends survey, Mazor says, more than 70 percent of survey participants plan to focus on AI while almost 20 percent are targeting automation projects that augment human skills.
Results from Bersin’s 2018 high-impact talent-acquisition research are just as insightful. Mazor says 89 percent of high-performing talent-acquisition functions use workplace values as a core basis for hiring, compared to only 35 percent of low-performing talent-acquisition functions.
“High-performing talent-acquisition functions are pointing to workplace values as a key element of hiring,” says Mazor. “It’s a pretty strong signal that this is an area that needs focus.”
