Case Study:
Validation Process to Build a Selection System
Situation
The critical problem for the insurance client was as follows: poor passing rates for the approximately twenty-five trainees in each of the four annual twelve-week introductory/job training courses. The client was experiencing a failure rate for training at nearly fifty percent. The key purposes for conducting a validation process to develop and build a selection system were:
- Human Resource Process Efficiency
- Prediction of Success in Potential Employees
- Selection Process Defensibility/Consistency
- Cost Savings for the Organization
Also critical for the client was the desire to increase the prediction of success in training and, subsequently, the target positions.
Client Solution
Hyde & Lichter found that the main controllable reason for failure was weak analytical reasoning skills in the recruitment classes. Each candidate failing the introductory training course was conservatively estimated to cost the organization between $25,000 to $35,000. The costs were accounted for in several tangible categories: the costs of recruiting, introduction of the benefit packages, salaries and training.
Outcome
After completion of the validation project, a selection process was developed and implemented. The new process yielded a ninety percent reduction of the failure rate. Now, instead of half of the one hundred employees failing, only about five were leaving the training for controllable or uncontrollable reasons. Also, the selection process followed the guidelines outlined by the government for fair selection practices. The time and effort required to select employees was also greatly reduced.