Software lets companies predict likely outcome of hiring decisions

BY NANCY JOHNSON SMITH Special to The Globe and Mail

Canadian businesses will lose almost $56 billion by 1990 if they don't replace traditional personnel selection procedures with scientifically based techniques, such as behavior-based interviewing. At least, that's what Human Performance Systems Inc. says. The Calgary-based company said it has devised a computer program that incorporates hundreds of scientific studies that analyze the costs and benefits of different hiring procedures. Using the software, released commercially last spring and in an upgraded version this November, individual companies can forecast the outcome and expense of their own hiring procedures. "Before we produced this software," said HPS research director Tom Janz, an industrial psychologist, "most personnel officers probably agreed past behavior was the best predictor of future performance. "But they just couldn't put a dollar value on what their company would gain if it invested in giving them and line managers behavior-based interview training. "Now, our new program makes such predictions not only possible but practical." Based on complex equations called utility formulas, HPS's Staffing Cash Flow program allows managers with relatively little mathematical sophistication to calculate the dollar cost-benefits of any staffing investment, said Dr. Janz, a University of Calgary associate professor of management. They simply have to plug in numbers estimated from their own company's experience, he said, adding that the forecasts made by the software are based on such known facts as acceptance rates once a job is offered, numbers of applicants, job turnover, the number of job openings, recruiting methods and selection procedures, plus financial factors such as tax rates. The benefits predicted for behavior-based types of interviewing spring from how well they predict the best person for the job, and HPS data show the right person in a job can be worth thousands of dollars in increased productivity, Dr. Janz said. In research studies, Dr. Janz asserted, what he calls behavior description interviewing, or BDI, is three to five times more accurate than traditional selection methods. BDI uses a structured series of questions based on prior job analysis, and focuses on the applicant's past behavior instead of his opinions or hypothetical assessments of his future actions. Dr. Janz has long argued for this method of interviewing -- in 1986 he wrote a textbook on the technique. What is new, he said, is the provision of a statistical research base to test how well these techniques are working and to demonstrate their dollar value. Gordon Hanna, national recruiter for Calgary-based Texaco Canada Resources Ltd., expressed satisfaction with the predictions the HPS software made for his company. "My feeling is we're getting those savings," he said, although the company has used BDI for only a year.

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