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Bad hires can cost you $50,000 per toxic worker hired.
Although we think that we are, most of us aren’t really that good at identifying good job candidates. Many studies have shown that we’re full of biases and prone to snap judgments. Now there’s a new undesirable applicant for employers to avoid, and they’re hard to identify without help.
A Harvard Business School study1 published in November 2015 by Michael Houseman (Senior Statistician at Cornerstone OnDemand) and Dylan Minor (Kellogg School of Management, Northwestern University) identified a new workplace threat that’s costing employers a bundle.
Their study of over 58,000 workers across 11 firms identified specific personality and behavioural traits that predict accurately which applicants are most likely to be detriments to the organization, or in other words, ‘toxic workers’.
Toxic workers are people who present well but who ultimately cost employers time, problems and money. Their traits include being self-centred, overly confident and yet surprisingly, they’re also productive and follow rules closely. These factors have a direct effect on the likelihood of an eventual firing or other negative experiences with these candidates. The study found that “one standard deviation in skills confidence meant an approximately 15% greater chance of being fired for toxic behavior, while employees who were found to be more self-regarding (and less concerned about others’ needs) had a 22% greater likelihood. For workers who said that rules must always be followed, there was a 25% greater chance he or she would be terminated for actually breaking the rules. They also found that people exposed to other toxic workers on their teams had a 46% increased likelihood of similarly being fired for misconduct.” 2
But here’s the really interesting and disturbing part. Even if you have a superstar employee with output equivalent to two or three other workers, that employee is only adding about $5000 to the bottom line. On the other hand, just one toxic worker can cost a company about $12,000 in turnover expenses and even more in legal fees, disciplinary actions, low employee morale and lost business due to negative customer interactions. Their total to cost an organization is estimated at between $25,000 and $50,000.
Narcissism and overconfidence, which have been linked to workplace problems in previous studies, are two other traits of toxic workers. When they are combined with extreme rule following tendencies the problems intensify. These individuals tend to be Machiavellian and prone to telling recruiters whatever they think the recruiter wants to hear as long as it gets them the job. They’re also the ones most likely to get caught breaking the rules. Their tendency for high performance and ability to be charismatic and charming means that they often perform well. The problem is, although they’re more productive, the quality of their work is often average. Individuals who are corrupt or who have ‘flexible’ and opportunistic moral compasses often succeed in business. The psychology actually makes a lot of sense when you think about it. Toxic workers play all the right moves and present the right image but they don’t really care about other people very much.
Here are some other statistics that you know but have probably forgotten. The Society for Human Resource Management reports that on average:3
• 36% of new hires fail within the first 18 months.
• 40% of senior managers hired from outside the organization fail within 18 months of being hired.
• It costs on average one-third of a new hire’s yearly salary to replace them.
There’s one last thing. Minor and Houseman determined that having a high degree of what they called ‘corporate citizenship’ had a direct impact on the quality of hire. Corporate citizenship means to have pride or an interest in one’s organization, to care about its reputation and its customers. Individuals who don’t really care about other people (which toxic workers don’t) tend to have very low rates of corporate citizenship and therefore, they aren’t good employees.
A related 2014 Harvard Business Review article by Jean Martin4 cited a CEB study5 that discovered that the biggest reason for poor hires was a bad ‘fit’ with the organization. It’s the dimension that most hiring managers overlook while they focus on a candidate’s experience and skills. Without that third piece the picture’s not complete. The solution to that problem is the same one that can be used to avoid hiring toxic workers too - identify candidate fit by using an assessment that does this.
Assessment tools exist that can help employers identify the candidates who ‘match’ their organizations and the roles that they’re trying to fill. The personality and behavioural traits of toxic workers have been proven to correlate with negative employee outcomes, and they can be measured and thus, avoided. To do this one must conduct a job analysis and identify the specific things that an employee must be able to do in the role and then identify the personal characteristics, skills, and abilities required to perform them well.
The Work Personality Index – Job Match assessment does this very well. It allows recruiters to create a profile of desired traits, tied to a specific job role, and then rank those traits from Not Applicable through to Essential. The report shows how close a match the candidate is to the employer’s desired competencies and whether they’re a good or a poor fit for the position in question. When tools like this are combined with skills and aptitude based assessments they provide even greater insights into a candidate’s strengths and weaknesses.
There are other tools available that can also be benchmarked using existing employees and then their scores can be guidelines against which to compare job candidates. Many of these tools assess things like dependability, honesty, reliability, team work, ethics and more.
There is no magic bullet when it comes to foolproof employee selection but it is possible to avoid other people’s rejects and make better, more reliable decisions when hiring. Avoiding a problem while still hiring quality is the ultimate goal and it takes more than a resume and an interview to do it.
There are hundreds of excellent, affordable assessment tools available to help employers accomplish this. Those who don’t take advantage of these resources could find themselves saddled with high turnover issues and the many other problems that result from bad hires and toxic workers.
1 Toxic Workers, Working Paper 16-057 – Harvard Business School, Michael Housman and Dylan Minor, November 2015 - Toxic Workers
2 It’s Better To Avoid A Toxic Employee Than Hire A Superstar – Harvard Business Review, December 9, 2015, Nicole Torres - It’s Better To Avoid A Toxic Employee Than Hire A Superstar
3 Poor Hiring Decisions Blamed For 80% Turnover
4 For Senior Managers Fit Matters More Than Skill – Harvard Business Review, January 17, 2014, Jean Martin - For Senior Managers Fit Matters More Than Skill
5 In Search of Great Leaders: Recruiting Executives for Today’s New Work Environment - CEB Recruiting Leadership Council Report
David Towler is President of Creative Organizational Design, a firm offering almost 40 years of expertise specializing in employee assessments and which has over 2000 different product titles available. Please send comments about this article to email@example.com. For more information, please contact us.
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