SMART NEWS

How Companies Use Data To Hire, Fire and Promote

Companies are turning to data to help them hire new workers, and compare how their employees are doing

Contributor

May 29, 2013

By now, everybody should know that posting certain kinds of pictures on social media can sway a potential employer’s hiring decision. But soon it might not just be drunken party pictures that cost you the job but a data point as seemingly innocuous as how often you log in. Companies have started collecting and using all sorts of data to help them hire new workers and compare how their employees are doing.

Take Xerox. Applicants for a low-wage job at Xerox call centers input data about themselves in an application, and Xerox uses software to compare the candidates. This might not seem that surprising, but this software isn’t simply looking at the sort of factors you might expect, like how much experience candidate A has compared to candidate B. MIT’s Tech Review explains:

Instead, a person should be a “creative” type, though not too inquisitive. Participating in one social network like Facebook is a plus, but involvement in too many is a negative. A short commute is a must—that means a person is less likely to quit before Xerox can recoup its cost to train them.

Of course, Xerox isn’t the only place to do this. Google’s “People Operations” department (a department known in most companies as HR) has been using data to engineer their workforce for years now. The People Operations (POPS) department is responsible for all the perks you might have heard about at Google, like on-site laundry and free food. It’s because of POPS that Google has been named the “best company to work for” by Fortune for the past four years. If this all seems like overkill, it’s at least overkill based on data. Here’s Slate:

POPS rigorously monitors a slew of data about how employees respond to benefits, and it rarely throws money away. The five-month maternity leave plan, for instance, was a winner for the company. After it went into place, Google’s attrition rate for new mothers dropped down to the average rate for the rest of the firm. “A 50 percent reduction—it was enormous!” Bock says. What’s more, happiness—as measured by Googlegeist, a lengthy annual survey of employees—rose as well. Best of all for the company, the new leave policy was cost-effective. Bock says that if you factor in the savings in recruitment costs, granting mothers five months of leave doesn’t cost Google any more money.

Back at Xerox, they too are pleased with their data based hiring methods. Here’s Tech Review again:

Since the company began pilot tests of Evolv’s analytics software two years ago, Morse says employees are on average staying longer at Xerox and their performance is 3 to 4 percentage points better, as measured by factors like how many complaints they resolve or how long it takes to handle a call. The software has also started to influence other subtle factors, like what time of year Xerox hires people.

But just like any data collection and analysis of people, using data like this to hire isn’t without privacy and legal complications. There are laws to prevent workplaces from discriminating against potential hires for certain things. It’s legal to give skill tests, but when companies are looking at things like how many social networks applicants are on, and how active they are on them, things are a little murkier.