Are Lowering Employment Standards & Fast Tracking the Keys to Dealing with a Tight Labor Market?

Arlette Steinberger

I recently had the opportunity to do a presentation for a professional association on recruitment. Initially, being clueless as to what exciting and innovative ideas I could present, I resorted to my old standby--Analyze the Data. And oh, can I get lost in the data. I am fortunate my employer had chosen to purchase an applicant tracking system 10 years ago so I had lots of data to play with.

One of the areas I decided to investigate was how our recruitment indicators had changed in the last few years. Being in a supervisory position, I don't have the day to day challenge of trying to find viable candidates. Of course I had read about the unemployment rate continuing to drop to the "lowest rate in 30 years." Over the last several months, I have also heard the increasing exasperation in the voices of our staff in finding qualified candidates. Recruitments which had previously been deemed as quick and easy "goat ropings" had now made staff feel like the mythical Greek character Sisyphus who rolled a stone up a hill only to have it rebound again and again and again.

Anyway, my study of recruitment indicators was interesting. Over the last two years, our applicant rate had declined by 15%, applicants given tests went down by 20%, vacancies increased by 32%, and referrals jumped a whopping 74%. The referral statistic was particularly intriguing. It took me awhile to figure out what it meant.

Our agency hires candidates according to merit. We have personnel rules as well as union contracts, which specify the method positions are to be filled. Although the number of qualified applicants eligible for consideration varies between the contracts and the rules, most of our hiring is done from the top five scores composed from a job related examination process. I discovered the increase for referrals meant hiring officials had to keep requesting additional eligible candidates because: a) applicants were no longer interested when contacted for a selection interview or b) applicants had multiple job offers and could afford to be choosy. It also meant hiring officials were selecting candidates with lower and lower scores on the list of eligibles.

All these stats got me to thinking about how these trends were effecting the quality of our workforce. We, as I'm sure some of you, have had our customers ask us to be "flexible" because they need people (i.e., lower passing points). I had read how some employers are eliminating background checks and drug screens altogether out of fear of what they will findthey value ignorance over disqualification. I also read how one of our Assessment Council member agencies had been using "work keys" to expedite the hiring process. After a period of time they found the quality of candidates was not acceptable and would be returning to more traditional tests such as written exams. Is it that we are resistant to change? Or are there some legitimate concerns in lowering the pass points, changing standards, and using fast track but less valid selection processes to get people through the process quicker to meet our customer demands?

What does some of the traditional test theory tell us about this kind of situation? I recall in graduate school reading about the theory behind Lawshe Expectancy Tables. These tables address the utility of a testing or selection process. Even low validity coefficients could be useful depending on the ratio of applicants selected (selection ratio) and the proportion of applicants considered acceptable if no test was used (base rate). I decided to use the Expectancy Tables to help me understand these issues.

For this discussion let's start with a hypothetical job that has a base rate of 50%. Again, base rate is the percentage of people who will be acceptable if no testing or selection process is used. Some jobs have high base rates (70%) where almost all the new hires are acceptable. Some are very low where only 30% are acceptable. What happens as the number of people hired increases but the validity of the testing process and the base rate remain constant? Table 1 shows how many applicants are acceptable for a selection/testing process with an r of .45 and a base rate of 50%. A validity coefficient of .45 might be found for a well-constructed written test. We see the number of acceptable new hires decreases from 75% to 60% between the top and next 20% scores on the test. This would be similar to a situation where a passing point is lowered on a test.

Table 1

What happens when we use a testing process with lower validity? Table 2 shows the results for a testing process with an r of .15 but also for a job with a base rate of 50%. A coefficient of .15 might be found for an extremely well constructed training and experience evaluation (assuming the candidates did not fabricate or inflate their credentials). When we compare Table 2 with Table 1, we see as the validity decreases, fewer applicants are considered acceptable. In fact, for the top 20%, the percentage of "acceptable" new hires drops from 75% to 58%. Wouldn't this be similar to using a quicker but less precise testing process to expedite the selection process?

Table 2

Finally, what happens when we lower the base rate to 30% for the same validity coefficient of .15? Table 3 shows the percentage of acceptable new hires decreases to 38%. This compares with 58% "acceptable" new hires for a base rate of 50% for the top 20% scores on the test as showed in Table 2. It would appear the effects of a less precise selection instrument are even more dramatic for jobs with low base rates.

Table 3

In a tight labor market, lowering scores and using less precise selection processes may be a solution to our customer request. It may be of little consequence for jobs that don't require a great deal of skill or training - unless your employer is like mine, where productivity and efficiency are still important outputs for the taxpayers dollars. But more importantly, many public sector jobs with low base rates, pose considerable risk to the public as well as exposing the entity to liability if an unacceptable employee is hired. In particular, it may have an adverse effect for public safety positions and professional positions. Lowering employment standards and fast tracking may also have a negative effect for management and supervisory positions - particularly, if the agency does not have a well-developed skill training program to train for skills not readily available in the labor market. Supervision becomes even more important for training and developing employees to do the required jobs.

Tight labor marketdemanding customers where do we go from here? Well, there are no easy answers and we should be open for creative discussion in our profession. Continued low unemployment, if not negative unemployment is projected for the next five to six years so we have plenty of time to come up with solutions. Perhaps we can develop aggressive and innovative recruitment processes that take advantage of all the new technology available to us? Maybe some more progressive agencies will recognize the importance of maintaining competitive benefits? Perhaps public agencies should learn how to market and develop themselves as providing the quality work experience people want in their careers? Perhaps we need to look beyond our recruitment/assessment perspective and look to the developing the training function in our organization as well as partnering outside resources to develop needed skills? In the meantime, changing employment standards should be carefully reviewed for each job with the consequence of "mistakes" thoroughly considered before we become more "flexible" to meet our customer demands.

Arlette Steinberger is the Employment Manager for the City of Fort Lauderdale. She possesses her Masters degree in IO and over twenty years of practical experience. She may be reached at City of Fort Lauderdale, 100 No. Andrews Ave., Ft. Lauderdale, FL 33301, Phone: (954) 761.5318, Fax: (954) 761.5315, e-mail: ArletteS@ci.ftlaud.fl.us.