Is Automated Hiring the Wave of the Future?

When it comes to deciding which job applicants get turned down and which ones end up on their small business’s payroll, most small business owners trust their gut instincts. However, some U.S. companies – for now mostly larger ones – are letting computer programs make their hiring decisions.  Is automation the future of hiring, even for smaller businesses?

The appeal of a computer that can make hiring decisions is easy to understand. Advertising open positions, taking and reviewing applications and interviewing the top candidates consumes a lot of time and energy. Once a candidate is selected, businesses typically invest thousands of dollars per hire in training and hiring-related administrative costs such as processing payroll forms and other paperwork.

Unfortunately, research shows that businesses might not even be getting a good return on investment for their interviewing efforts. A recent editorial on Inc.com even suggested that hiring literally whoever walks through the door, and not evaluating them until they’re on the job, may be just as good a way to fill some positions as a complicated and costly screening process. That advice may be extreme, but the author cites research that shows that interviewing is not a good way to predict actual job performance. In fact, repeated studies have shown that 45% to 75% of new hires wind up not providing the traits and skills that their employers wanted and that they were trying to screen for in the interview process.

In a September article, the Wall Street Journal reported that big companies that need to hire a large number of low-level workers in relatively high turnover positions are resorting to applicant screening software. In many cases, this software is what makes the final hiring decision, based on information supplied by and about each candidate, in addition to a battery of screening questions.  The questions themselves are developed based on analysis of past hires and correlations spotted by data-crunching computers.

For example, in a call center position, it was found that employees with the longest commutes tended to have the shortest job tenures. To reduce turnover, the company began factoring candidates’ commute time into the hiring scores assigned to each candidate. Another company, eager to reduce accidents and workers’ comp claims, began excluding job candidates who scored lower on questions relating to work ethic and attitudes toward drugs and alcohol. The company saw its workers’ comp claims fall by 68 percent. According to the website Blogging4Jobs.com, companies will be forced to turn to this kind of automation to efficiently perform high-volume hiring.

However, for most positions, and for smaller companies, computers are not going to be taking over the hiring process any time soon. In an article published just a few days ago by Dr. Charles Handler, founder and president of Rocket-Hire.com, said he agrees with author Michio Kaku  that humans still have “the one commodity that robots cannot deliver: common sense.” Dr. Handler explains that because machines can’t think creatively or use intuition, there is a limit to how useful they can be in the hiring process. The human brain is still a better tool for digesting and evaluating some kinds of information, and for making certain decisions. Fortunately, this opinion no doubt agrees with the gut feelings of most small business owners – that their intuition and experience will tell them which job candidates are the best fit for their companies.

Finding and hiring talented, hard-working employees for a large or small business certainly isn’t the easiest thing in the world, whatever process you use.  Making sure that your employees are paid accurately and on time, however, can be a snap – if you rely on the dedicated payroll professionals at Padgett Payroll Services. You can find out about the full range of payroll services we can provide to your business, including convenient online payroll processing, by calling us today at (706) 548-1040.

Do you have the support you need to manage your small business bookkeeping? Contact us to schedule an appointment to speak with a local small business advisor.