Increasing numbers of companies are using online and automated staffing tools to improve the efficiency and effectiveness of their processes for hiring hourly retail, customer service, manufacturing, and work processing employees. There are several key concerns associated with staffing hourly positions that have directly contributed to the recent interest in using technology-centered hiring solutions. These include:
- Hourly jobs tend to be associated with large staffing volumes.
- Hourly jobs usually have relatively high turnover.
- Because they involve either the creation of products or direct customer contact, hourly workers can have a huge impact customer satisfaction and business productivity.
In the past, these issues, particularly the high volume associated with hourly staffing, tended to make staffing these positions problematic. However, technology has now made it much easier for organizations to create value with their hourly staffing processes. This two-part article series reviews the use of technology-enabled staffing methods to support hourly hiring. Part 1 describes some of the advantages that can be gained from automating hourly staffing practices. Part 2 (to be run next month) will call attention to potential risks associated with automating hourly hiring processes. All of these risks are surmountable, but they are things you will want to actively manage as you migrate from a manual to a technology-enabled hourly hiring process. Hourly assessment systems tend to contribute to company performance in three basic ways. 1. Increased profits. Automating the hiring process for hourly employees can contribute directly to a company’s bottom line. This can be done through increasing the quality of hires, as well as leveraging other unique opportunities afforded by automation. Consider the following examples:
- RadioShack found that the use of a web-supported staffing-assessment process for hourly workers was associated with an increase in revenue of about $10 per hour per employee. This translates to an annual revenue increase of over $12,000 per part-time hourly employee.
- Many hourly hires are eligible for Work Opportunity Tax Credit (WOTC). This is a government program that provides companies with up to a $2400 tax credit for hiring individuals who meet certain qualifications. By using an hourly hiring system that automated the WOTC application process, one call-center company qualified for $800,000 worth of additional tax credit over a three-year period. The WOTC credit alone more than paid for the cost of the entire assessment system.
2. Decreased staffing costs. The number and turnover of hourly positions found in many organizations often places managers in a position of having to constantly focus on supplying new talent to fill existing vacancies. Many front-line managers spend more than 20% of their time at work reviewing applications, interviewing candidates, and training new employees. Even small reductions in this time can create enormous financial gains. Web-based staffing methods deliver these gains by automating many aspects of the hiring process. Furthermore, the use of systems with scientifically designed assessments can significantly reduce turnover, thereby drastically lowering the money and time spent selecting, hiring and training new employees. For example:
- Sherwin-Williams estimates that its use of automated assessment tools reduced the number of employment interviews conducted each year by more than 5,000.
- Kroger Grocery stores saw a 25% reduction in turnover following deployment of an automated staffing system to support hourly hiring. This translated into 25% less time spent reviewing candidates, not to mention the decreased administrative and training costs required for newly hired employees.
3. Reduced operating costs. Most hourly jobs have considerable operating costs associated with things such as training, inventory loss (shrink), and workplace safety. Web-based staffing systems can significantly decrease these costs by using advanced assessment tools that more accurately identify and filter candidates based on key job-relevant characteristics. For example:
- A metropolitan transit company found that the use of web-based assessments led to an 84% reduction in health-and-safety-related compensation claims among bus drivers.
- A casualty insurance company implemented an automated staffing assessment and found that the passing rate in their three-week new employee training course increased dramatically. This translated into a reduction in training costs equal to several hundred thousand dollars a year.
The case examples listed above are only a fraction of the examples we have found that illustrate the substantial benefits of using automated staffing assessment tools to support hourly staffing. In addition to financial benefits, such as the ones listed above, automating the hourly hiring process also improves an organization’s ability to control and standardize its hiring practices. The result is a more consistent and scientific approach toward staffing. This can lead to a variety of additional benefits ó ranging from the ability to apply continuous improvement techniques to increase staffing effectiveness, to the ability to decrease the use of biased and potentially illegal hiring methods often used by front-line supervisors and store managers. We want to make it clear that not all web-based hiring systems will lead to these results. It is critical to select staffing systems and assessment tools that are appropriately designed and scientifically validated to support your organization’s unique hiring needs. Always remember that truly effective staffing systems do not simply increase the speed of hiring, they also improve the quality of people hired. In Part 2 we will talk a bit more about how to manage some of the specific risks associated with automating hourly staffing processes.