It’s that time of year when a crop of new college graduates floods the job market looking for work. But how those with freshly minted bachelor’s degrees eventually match up with employers is often a haphazard process for an economy as advanced as that of the United States.
Employers don’t plan far in advance for their hiring needs. They evaluate candidates during interviews based largely on gut instinct, and rely heavily on the halo effect of credentials from elite universities.
Anyone who has ever done the hiring for a job has a story about a mistaken hire. According to one survey by the Corporate Executive Board, hiring managers regretted making offers to one in five people on their staffs.
Increasingly, companies are embracing new technology and data analytics in making their talent decisions. It’s called “people analytics,” and it follows in the footsteps of professional sports teams that use data to evaluate talent — a process made famous by the book and movie “Moneyball,” about how the Oakland Athletics fielded an inexpensive, yet competitive, baseball team.
Human resources offices at major companies now harness thousands of pieces of data to figure out why and how their workers are hired, fired and promoted. This shift could transform how students find employment when they leave college and forever change the value of the degree as the sole signaling device that someone is job ready.
Today, 4,500 companies have at least one employee focused on people analytics; half the companies created those positions after 2010.
Credit Suisse is one. The global banking firm has had various new hires that didn’t pan out. Meanwhile, others who had summer internships there turned down offers for full-time jobs in favor of positions at other banks, tech companies or private-equity firms. Bank officials were worried about getting a reputation as a place where new hires failed or didn’t stay long.
“With all of the challenges we face in the market for top university recruits, hiring mistakes can end up harming our brand,” said William Wolf, who until recently was head of talent acquisition and development at Credit Suisse.
One of Credit Suisse’s early goals was to study hiring successes to see how possible it was to identify recruits who would “survive and thrive.” As Wolf defined it, those are employees who stay for more than two years and perform well.
The people analytics team at Credit Suisse tried to determine whether certain experiences in a student’s background could better predict success at the company. Wolf’s team looked at dozens of variables on résumés and in the screening process and asked a series of questions: Do athletes outperform non-athletes? (They don’t.) Does evidence of accomplishment in music matter? (It doesn’t among undergraduates, but sustained accomplishment among graduate students does.) Foreign language competency? (Doesn’t help.)
Some of the answers led to changes in Credit Suisse’s screening and interviewing process. For example, historically the bank had emphasized quantitative reasoning in hiring given the number of calculations young bankers do every day. So it tended to favor applicants with high GMAT scores, SAT math scores and college grade-point averages.
But the data team discovered that attributes such as leadership counted for much more than expected, and the bank developed new scoring guidelines that emphasized leadership across the board, and not just leadership itself. For example, students who had earned the top spot through skill or dedication, such as a captain of a varsity athletic team, were more likely to succeed than those popularly elected to, say, student government.
Whether the data will significantly change the list of top colleges and universities Credit Suisse typically recruits from remains unclear. Wolf acknowledged that campus hiring is still done by an army of volunteer screeners and interviewers who apply their judgment to candidates. So a student with a 3.8 GPA from Big State U may be asked tougher questions than a student with a similar GPA from an Ivy League school because the interviewer uses a higher standard, thinking that hiring the Big State U candidate is a risk.
As a result, it’s difficult to say whether hires from one school perform better than those from another, given the different human filters. “Our team tries to improve the judgment of recruiters by arming them with analytical information when it appears their biases have led to poor decisions,” Wolf said.
Wolf hopes that by emphasizing data and results over traditional biases recruiters will become more confident about hiring students from nontraditional colleges. Over time, he believes, the school name on the diploma will matter less to hiring managers. Already, by using virtual recruiting, the bank is hiring from a broader range of schools, and that helps Credit Suisse reach more students who want to make banking a long-term career, not a ticket to be punched on the way to a hedge-fund job.
The future of what people analytics might mean for new college graduates goes well beyond what is listed on résumés and academic transcripts.
It is being built by the likes of a Silicon Valley start-up called Knack, which makes video games for smartphones.
Knack’s games are not purely for entertainment, however. They measure the users’ resourcefulness, numerical reasoning and risk-taking. In one game, Wasabi Waiter, for example, the task is to deliver sushi orders based on the facial expressions of a growing number of customers who suddenly appear on the screen. Users give out menus, deliver a lineup of food from meals piling up in the kitchen and clear dishes. Meanwhile, behind the scenes, the game tracks every move, noting how well a user prioritizes, solves problems and learns from mistakes — all skills employers want. In just 10 to 20 minutes, the game collects enough information to make an assessment of abilities.
Royal Dutch Shell’s innovation team uses Knack to find the best ideas of the hundreds proposed at the company. Knack also is working with colleges to open the games to students so they can demonstrate their skills to potential employers well before they hit the job market. Students earn badges as they play the games, such as Leadership, Grit and Logistical Reasoning, which they can display online for potential employers to discover. Eventually, Guy Halfteck, Knack’s founder, hopes the games will help short-circuit the long and ineffective recruitment process for new college graduates.
“The interview process will change its form and function,” Halfteck said. “Instead of using the interview process to filter out the best candidates, you’ll start the interview process with only the best candidates.”
Selingo is a contributor to The Washington Post’s Grade Point blog. This article is adapted from his new book, “There Is Life After College: What Parents and Students Should Know About Navigating School to Prepare for the Jobs of Tomorrow” (William Morrow, an imprint of HarperCollins).