case study for recruitment process

Elite Human Capital

Executive search. recruitment. talent advisory. career coaching. outplacement., case studies in the recruitment process – an assessment method for gathering data on a candidate.

Recently I started recruiting for a management consulting company who uses client case studies as part of their selection process. For them, it has proven to be an effective way of gathering information on a candidate to assess suitability.

To better understand the use of case studies in the recruitment process, my assistant Laura and I did research into the topic, this blog post is to share that information with you.

An overview of case studies in the recruitment process

Case studies are used as a method of competency measuring. Competency methods can focus on technical abilities, social and behavioural skills, or a combination of the two.

Case studies are most popular in management consulting (though they are used in some other industries) since they are able to mimic the kinds of tasks that would be required in the job.

They are done face-to-face during a specified time slot or given to the candidate to complete in their own time.

See Hiring by Competency Models, Patty Grigoryev (2006)

University of Sydney, Case study interviews https://sydney.edu.au/careers/students/applying-for-jobs/interview-tips/case-study-interviews.html

Research on case study efficacy

The premise behind administering a case study as an assessment method is that it offers a level playing field, to some degree, by allowing shortlisted candidates to demonstrate their technical abilities and personal qualities irrespective of past experience and qualification(s).

Case studies enable interviewers to see the strengths and weaknesses of candidates in action, including:

• Engaging in logical and analytical reasoning.
• Thinking creatively and generating innovative solutions.
• Problem-solving.
• Working under time pressure.
• Effective communication skills, including presenting in front of one or several interviewers and using a whiteboard to express concepts.

Case studies are detailed in their nature, add cost to the overall recruitment process (because they require time and resources to administer) and are often one of the final stages in the recruitment process.

Reducing the risk of a bad hire

It is well-established that the costs of a bad hire for a business are huge, especially in leadership roles where it can affect the performance of the whole team.

The hard costs of a bad hire are estimated to range between 50% and 200% of the first-year salary. In management consulting, a bad hire cannot only affect the internal team – a poor client experience can have significant impacts from a brand and billing perspective.

Finding ways to reduce the number of bad hires isn’t easy, case studies have been developed to provide additional data points to make a more informed hiring decision. Using competency modelling methods such as case studies, it has been shown to increase success in hiring decisions, with the most significant improvement stemming from a better culture fit.

Talent Management 360, Using case studies to recruit talent https://talentmanagement360.com/using-case-studies-to-recruit-talent/

Case studies and management consulting companies

Big 4 accounting firms and strategy consulting houses like McKinsey and Bain consistently use case studies in their recruitment process, for example:

PWC appears to only use case studies in relation to taxation and when hiring recent graduates. They are described as “provide students with realistic fact situations in which a number of tax problems and opportunities can be identified”. They acknowledge that law students and business students may choose to approach them differently and give some background regarding the issues and deliverables expected, such as that students are expected to “incorporate a certain amount of tax planning into their solutions”.

https://www.pwc.com/us/en/careers/university-relations/tax-case-studies.html

By contrast, Deloitte’s approach is broader. The case interview is designed to assess problem-solving and analytical skills, as well as logic and strategy. However, it is also designed to give candidates an insight into their prospective role, since the cases align with real projects. They clearly step out a five-step approach that candidates should use to address the case interview and give a list of helpful tips that they recommend will help interviewees get the most out of the experience. There is also an interactive case interview practice website ( http://caseinterviewprep.deloitte.com/ ) designed to assist.

https://www2.deloitte.com/us/en/pages/careers/articles/join-deloitte-careers-case-interview-tips.html

McKinsey & Company who are notorious for gruelling recruitment methods, with some prospective employee’s having up to 20 interviews before receiving an offer, including a compulsory case interview.

McKinsey offer four example case interviews, which can all be found at this link:

https://www.mckinsey.com/careers/interviewing

Bain states that any candidate applying for a consulting role should expect a case interview, and those cases will be based on Bain’s client work. They provide two examples, as well as a mock interview for candidates to watch:

https://www.bain.com/careers/interview-prep/case-interview/

Capital One

Capital One also has a detailed case study guide which demonstrates what they will assess (problem solving and analytical skills) as well as providing examples:

https://jobs.capitalone.co.uk/business-analyst-case-study-guide

Time allotted

The PWC case studies are to be done in the student’s own time, but there is a general guideline offered: “The time required of the student to complete the case requirements will vary greatly, depending upon the level of tax knowledge of the individual student, their software skills, and the number and type of issues in each case. As a very general guideline, each case study, with all issues included, should require not less than 10 hours of issue formation, research, and analysis by a graduate tax student, before the final deliverable(s) are developed.”

Deloitte’s case interview preparation page states that each case is 15-20 minutes long but does not give any set time limits and there is no suggestion that responses are timed.

See PWC Case Studies in Taxation https://www.pwc.com/us/en/careers/university_relations/documents/Case-Studies-in-Taxation-2018.pdf

Measuring the responses

PWC’s case studies are designed to test both technical skills (tax knowledge, Excel ability) and broader skills such as problem solving and creativity. It is stated that the ‘deliverables’ can be in many forms including “a letter to the client identified in the case study, a memo to the client file, or preparing a ruling request for the IRS. Some case study users require oral presentations. These may take the form of a straight presentation or role-play in the setting of a client meeting, resolution of an audit, or representation of a client in a court.” Actually measuring these is not expressly dealt with, but the document does provide a set of solutions to each case study for comparison, akin to a marking key.

By comparison Deloitte is focused less on finding the ‘right answer’ and emphasises that candidates will do well by clearly demonstrating a logical thought process. Having a clear structure and acknowledging any assumptions are listed as recommendations. Possible answers are given in the example attached and they focus on having both justifications and implications for each point. It’s all about the ‘how’ rather than the ‘what’. For numerical/technical questions however, there is a clear right and wrong.

Other methods of work sample testing

There are alternative methods for collecting data points on a candidate, these include: written questionnaires, take home or in office real life job tasks, online assessment tools and group assessment centres.

One hiring manager I was recruiting for would take a full two hours to conduct an interview with a candidate. In the first hour he would cover off behavioural and company ‘fit’ questions, in the second hour he would launch into a long list of technical questions, including real case study examples from working at his company.

This thorough approach made the hiring manager more confident in his decision to hire the individual (or not hire if the candidate wasn’t strong enough).

Here are some other quality articles on evidence based interviewing and testing.

• The Case for Evidence Based Interviewing: Part 1 and Part 2
• Assessing Soft Skills

When I’m engaged to conduct a recruitment process for a client I recommend gathering as many data points on the candidate as possible – including a type of work sample, if possible.

I’m always looking for ways to help organisations recruit better. Leveraging years of experience in corporate recruiting I can assist with finding the bottlenecks and weak points in your hiring process and improving hiring outcomes.

Find out more about my services here: https://elite-human-capital.com/consulting-services/

To talk with me about how I can help, make contact today.

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Reengineering the Recruitment Process

The skills needed in many roles are continually changing—and sources of talent are too.

The Covid-19 pandemic has upended many traditional business practices. When it comes to recruiting, the crisis has not so much disrupted as accelerated shifts in the talent landscape that were already under way, leaving many companies poorly served by their current hiring practices. In a period of steep unemployment, it might seem that companies looking to add workers would be in the driver’s seat. But job openings have also been rising in recent months, meaning that competition for top talent remains keen—and in uncertain times, bringing on the right people is more important than ever.

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Home » Management Case Studies » Case Study: Google’s Recruitment and Selection Process

Case Study: Google’s Recruitment and Selection Process

Google Inc., the world’s largest and most popular search engine company, is also one of the most sought after companies in the world. Due to the popularity of the company caused by its highly attractive compensation and benefits packages for its employees, millions of job applications are constantly received by Google on an annual basis. While other companies envy Google for attracting and acquiring such highly-talented and highly-skilled individuals from all over the world, the company finds it as a serious cause of dilemma.

When Google Inc. topped the ranks for the most popular companies in the world , it could no longer contain the number of applications it receives from thousands of job hunters from all over the globe. And since the company aims to hire only the best employees that fit the organizational culture and standards of Google , the company started thinking of ways to better improve its recruitment and selection process for its would-be employees.

In an article released in New York Times in 2007, Google Inc shared its non-traditional, highly creative and unconventional approach of selecting and hiring employees. Initially, the Google management sought the aid of its highly-competent and well-skilled technical staff in order to find ways to quickly go through and review the millions of applications it stored in its recruitment database.

The Google Inc management also decided to focus on the distinct behavioral characteristics and personality that separates Google employees from any other employees in other known companies. It shifted its focus from academic qualifications and technical experiences to the applicant’s personality , creativity , leadership capacities , innovative and non-conventional ways of thinking and the applicant’s overall exposure to the world. The academic qualifications and the intensive job experience just came in as second priorities of the company in choosing the best candidates for any open positions.

Since then, the Google Inc company not only became known for its outstanding and “luxurious” job compensation and benefits packages it offers its employees, but also in making use of some of the most powerful recruitment assessment tools capable of picking the best employees in the world that fit the standards set by Google.

The Google Recruitment Process

One of the most notable statements of Eric Schmidt , the CEO of Google Inc. is that “Google invests in people.” The main reason why people from different cultures, have been dreaming of being recruited and hired by Google is that the company offers possibly the most outstanding job compensation packages any normal employee could ever enjoy.

In order to attract the best employees, Google draws them by the promise of wealth and luxury, providing their employees with almost everything an employee could possibly need, from absurdly high compensations to extravagant and luxurious benefits like gourmet food, carwash, gym, snacks, exercise classes, dry cleaning services, car services, haircuts, oil changes, massages, checkups and many more, all for free.

Nevertheless, the recruitment process was also far beyond ordinary. Several people who have had experience in the Google recruitment process narrates that the experience was totally nerve-wracking. One applicant who underwent interviews for Google has had five to seven interviews in one day for two to three straight days. That applicant claims that the interviews were really tough with some of the brightest people in the world, conducting the interviews filled with brain teasers, algorithmic problems, and IQ tests.

Another applicant who also have had experiences in the recruitment process of Google claims that his Google experience was one of the most nerve-wracking adventures of his life. The interviewers were looking for extremely bright individuals and so the recruitment method was filled with IQ tests, brain teasers, algorithms, data structures, and a lot of mathematics involved in it.

The Google Selection Process

Google is no doubt the world’s best recruitment leader. Google is known for various unique approaches that it has utilized in order to attract the cream of the crop or the best of the bests. One way is through employment branding. Google has so successfully utilized their brand in order to attract the most talented and highly-competent individuals in the world. Because of their claim of providing the best employee-employer experience supported by the many perks, benefits and high salaries that Google employees get to enjoy, Google became the most desired companies for men and women in the world.

While the work and job responsibilities in Google are not that easy, the stock options benefit is one of the key drivers of retention and continuous acquisition of the best employees for this company. In 2007, employee turn-over at Google was reportedly less than 5% which was simply phenomenal. People didn’t want to leave the company because the amazing provisions and benefits that the company offers its employees. Moreover, the creative approaches of Google when it comes to hiring and retaining employees were simply exceptional. Employees claim that money was never an issue for Google in terms of utilizing it to take care of its employees.

One notable recruitment technique that Google utilized in 2006 was the targeted and unobtrusive approach to sending recruitment messages. Google crafted a simple technique to recruit the best students in certain schools and universities to work for them. They allowed people from these schools to access the search portal of Google wherein the students’ IP address would be identified to see from what organization the person belongs into. The technique was successfully executed using a minimalist and unobtrusive style of recruitment wherein below the search box, the Google system would know whether the targeted student is graduating or not and whether or not they intend to work for Google after graduation. The approach was definitely a successful micro-targeted approach. It was also in the same year when Google opened up to the idea of an Employee Referral Program. In putting up this program, Google made sure that it would deliver them a world-class employee whose personality, qualifications and work ethics reflect the Google standards.

A year passed by and Google’s attempts for recruitment innovations continued to improve. In 2007, Google developed a simple and effective assessment tool to screen its millions of applicants all over the world via an algorithm assessment tool. The algorithm technique effectively separated the top and the best performers from thousands of candidates vying for a position. Moreover, the assessment tool was made sure to successfully predict the best possible candidates from the least and the average and has managed to resolve the issue on the usual assessment tools being used by most companies, relying mainly on the academic qualifications and intensive industry and job experience.

Truly, what separates the Google recruitment process from the typical and the usual recruitment methodologies that other companies employ is its ability to accurately identify the best candidates for the position using a more data-based and scientific approach to the recruitment process. Also, it has significantly reduced the reliability of interviews, which for most companies, serves as the final indicator of how well an employee will perform at work. Furthermore, the algorithm approach which is a common business model that the company employs was effectively used to assess whether potential candidates can indeed perform given the high performance standards of Google.

The secret to be selected as a Google employee is that one has to think a lot like an “engineer”. Apparently, Google expects their employees to be highly quantitative and highly analytical as well as highly capable of dealing with too many data all at the same time. During the interviews, an applicant must also be able to demonstrate his skill or capacity by writing codes, intelligently analyzing case studies and brain teasers and solving algorithmic problems on the spot. Also, Google is searching for applicants who are highly practical and are capable of making something out of nothing that people can make use of.

The Google Interview Process

Since Google is known to be the ultimate recruitment and selection machine, its interview processes are also the most grueling experiences an applicant could ever have. Usually, the interviews begin using the telephone. Once the phone interviews conducted have been successful, the applicant would be scheduled by the recruitment officer and be invited for a series of five to ten interviews in one day with ten different people. For some people who have successfully undergone this process, they described it as the most excruciating employment experience of their lives as a lot of mental gymnastics were necessary to prove your skills.

There were many instances when the applicants were asked to write codes, brain storm, role play or solve mathematical equations on the spot just to prove that they are highly-skilled and competent. In other instances, the applicants are even tested of their marketing skills even though the position an applicant is applying for is highly technical. The interviewers seem to have control and power over the applicants letting them do everything just to prove that they are worthy for the position. Common questions involved computer network problems, Java programming and algorithms by which Google is known for.

Moreover, other applicants can rate and share comments on another applicant which Google can track and use as another basis for hiring or not hiring an applicant. Overall, the process was a lengthy, tedious and nerve-wracking experience which can possibly traumatize anyone whose dream is to work for one of the most prestigious companies in the world. Nevertheless, the perks and benefits are limitless and are more than enough to compensate for such a tough employment experience.

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Skills-based success: 10 recruiting case studies

The working world has been turned on its head with the pandemic, the Great Reshuffle, and the resulting skills shortage. Companies are searching for a powerful, sustainable way to recruit and retain talent, and 73% of them are now opting for skills-based hiring practices.

Skills-based recruitment practices are for everyone. Don’t believe us? We've put together 10 recruiting case studies that demonstrate how different individuals, industries, and regions have successfully implemented skills-based hiring.

Table of contents

What's the purpose of a recruiting case study, 3 personal recruiting case studies, 3 recruiting case studies by industry, 4 recruiting case studies by region, looking for more recruiting case studies, the state of skills-based hiring 2023.

Read TestGorilla's annual report to discover why over 70% of companies chose to adopt skills-based hiring methods in 2023.

In recruitment, case studies are helpful tools for employers seeking to build, develop, or optimize their recruitment processes. They can be great sources of information and inspiration. By understanding the successes and failures others have had with their hiring processes, hiring managers can take any relevant learnings without having to make the same mistakes that others have.

To make these recruiting case studies relevant for as many people as possible, we've divided them into personal case studies, case studies by industry, and case studies by region. Let's dive in.

Let’s first look at the personal stories of some stellar individuals who were recruited into their ideal industries using skills-based practices. These people didn’t have traditional backgrounds, but because of their unique skills, they got into amazing roles. All that was needed was a chance to prove those skills during recruitment.

1. Justin Hutchinson

Justin Hutchinson wanted a future in football, but he was faced with a hard choice at age 14: Focus on his career prospects or take care of his father with cancer.

Justin, of course, chose his father and has never regretted that choice, but it did mean giving up the chance of achieving his dream job.

After his father’s passing, Justin attended a community college to fulfill his father’s wish for him to get a degree. To pay rent and living expenses, Justin got a job at a smoothie franchise.

His aim was to simply support his cost of living by making fast food – but it turns out Justin’s real skill was people and communication.

Justin would study the cars that drove up, memorize their orders, and have them ready so he could spend time talking and getting to know the customers instead of making drinks.

One of Justin’s customers was a chief executive of a marketing company and was so impressed with his people skills, he offered Justin an internship.

It wasn’t long before Justin used his soft skills to turn that internship into a full-time position. He dropped out of college, poured his heart and soul into the role, and attained the role of Director of Business Development.

Justin attributes his success to his best skills:

Workplace empathy

Strategic and critical thinking

Sales management

Justin didn’t have a typical marketing background – his experience was a partial college education with no degree, on-the-job experience (and not a traditionally “relevant” job), and his internship.

Not everyone can find the perfect marketer in a charismatic smoothie server, but online skills testing holds the same principles: Look at abilities first and ask questions later.

Sales and marketing are industries that are uniquely dependent on soft skills, which makes skills-based hiring an obvious choice for recruiting. For information on how it helps with the tricky subject of ramp time, read our article on skills-based hiring and ramp time.

2. Latisha Carter

Latisha Carter had a dream of excelling in corporate America, but she never got the opportunity to attend college.

At age 17, Latisha became a single mother. This put her dreams of college on hiatus for the foreseeable future.

Three years later, after having another child, Latisha got a job as a nursing assistant. But she still couldn’t shake her desire to make it in the corporate world.

She secured a call center job with NCR, a software company, driven by their offer of extensive employee training. 

Offering extensive upskilling and reskilling is one of the best things you can put on the table for potential candidates. A study by Lorman showed that 59% of Millennials believe that development opportunities are extremely important when deciding whether to apply for a position.

Latisha used her experience at NCR to get a role in customer service at the software company Sage.

With determination and hard work, she continued to work her way up for 20 years until she became a director at Xero, an accounting technology company.

Latisha is now proudly a director in corporate America with no college degree. Her company is reaping the benefits of her presence and skills. 

In the second half of 2021, Xero’s approach to skills-based hiring and its emphasis on diversity pushed a 7% increase in racial and ethnic diversity.

Jana Galbraith, the executive general manager for people experience partnering for Xero, says: “ [H]istorically, hiring based on degree exclusively has perpetuated discrimination .”

This boost is great news for Xero because the benefits of diversity are broad and include increased productivity, innovation, and financial performance.

Latisha’s struggle to succeed is unfortunately common for working mothers. To learn more about this, read our article on the motherhood penalty .

3. Cindy Veach

Cindy Veach didn’t have a traditional background. She had all the tech know-how, but she only had experience involving massage therapy and social services.

But she had the skills and she knew it. Cindy says it was a happenstance that she stumbled upon her perfect role; she just wanted a role where she could use her best talents.

“I was looking for jobs I had the right skills for, organizational skills in particular,” said Cindy.

She happened upon a tech administration apprenticeship program at IBM. Before then, she saw her tech skills as just a hobby and never imagined herself in the tech industry – but she applied and was accepted.

Cindy had a steep learning curve ahead of her. She possessed the base tech skills but needed the training to reach the right level.

She attributes much of her success to the flexibility of her mentors. They continually told her that if a path “didn’t feel right,” she was welcome to experiment and try something new.

At the end of the apprenticeship, she applied for a network operations technician role and was hired. She took a position with flexible work options so she could still care for her two children comfortably. 

Skills-based hiring made this outcome possible. Cindy’s communication skills, digital expertise, and problem-solving abilities helped her secure her role, and the focus on continuous improvement is helping her develop it .

She says that the combination of her appetite for learning and her employer’s support for her success is the perfect duo for creating limitless growth.

We’ve heard plenty of people say “skills-based hiring doesn’t work in my industry.” But that’s just yet another myth we’ve debunked . Let’s take a look at a handful of case studies about how companies within certain industries have succeeded with skills-based recruitment initiatives.

4. Healthcare

Healthcare administration is an industry that’s notoriously difficult to get into. Between receiving a bachelor’s degree and completing a master’s program, it can take six to eight years of rigorous commitment.

However, more opportunities are arising that allow equally qualified candidates to get in without obtaining specific educational requirements.

Sam Saucedo-Hernandez had a tumultuous life, but she only ever wanted a solid career. As a child of parents who emigrated from Mexico, she wanted to be the first generation in her family to attain a degree.

Sam watched her parents struggle with low-wage jobs and promised herself she would do better for herself.

Her first attempt was at law school where she spent several years studying hard. Sam was ecstatic to get her degree and begin a career in law.

But two weeks after she got her associate of science degree, the school got shut down for fraud, leaving Sam jobless and $60,000 in debt.

Sam faced many challenges, but the turning point in her story was the day she received a letter promoting a no-cost medical administrative assistant job training program from JVS.

JVS is a program that helps people build skills and find solid career connections – particularly in the healthcare industry.[1]

JVS has seen amazing success with over 500 employer partners and an emphasis on promoting diversity: 88% of their participants are Black, Hispanic, Asian, or a wide range of other ethnicities.

Sam applied for the program and was accepted. She secured a position as a medical administrative assistant, but her training has led her to her current role in the audiology department.

Though she’s fortunate for her position, Sam says she’s still looking forward, wondering where her skills can take her from here. 

Programs like JVS are working tirelessly to make more stories like this possible. With a focus on skills over experience, they bring in valuable candidates to industries that may otherwise be restricted to them.

5. Manufacturing

Steelcase, a furniture manufacturing company, wanted to build a fairer place for employment opportunities and encourage better representation for employees of color. So they adopted skills-based hiring practices.

They’re far from the only ones. According to TestGorilla’s State of Skills-Based Hiring report, 85% of businesses in 2023 had the goal to increase diversity.

And companies are succeeding at this by implementing skills-based hiring: 91% of organizations saw an increase in diversity due to skills-based hiring.

Steelcase realized that if they truly wanted to boost their DE&I initiatives , traditional hiring methods wouldn’t do.

They decided their hiring processes needed to be revamped for the better, so they adopted some new practices:

Prioritizing skills over resume and pedigree

Removing experience requirements wherever possible

Favoring continuous improvement over perfection

Revamping job descriptions to reduce biased language

Prioritizing diversity among equally qualified candidates

Steelcase decided that practices like these would enable them to reach diverse talent organically, and it worked. Since the program started, Steelcase’s new hires are 55% women and 30% racial or ethnic minorities.

Steelcase’s initiatives are amazing, so we encourage similar active moves to boost diversity. To read more about this topic, read our blog on why being intentional about workplace diversity is non-negotiable .

6. Software

ADP, an HR management software company, adopted a recruiting strategy to focus on skills , rely less on credentials, and make an effort to provide opportunities for candidates with nontraditional backgrounds.

This strategy included training talent acquisition professionals on best practices, hiring specific diversity recruiters, removing degree requirements from high-volume recruiting roles, and leveraging better training and mentorship for new hires.

What were the results? ADP saw great success in one year:

An increase in the number of candidates with no college degree

An increase in Black representation in the candidate pool

An increase in Hispanic representation in the candidate pool

This program was heavily inspired and backed by Maria Black, the chief executive of ADP, and her strong belief in corporate social responsibility.

She has a strong passion for supporting working women, veterans, and other underrepresented talents.[2]

Maria is an excellent example of the power of leading from the top. When your company’s leadership supports a great cause, it benefits both employees and company alike and builds a better organizational culture .

Next, let’s take a look at some case studies about the regions and countries that are taking on skills-based recruitment practices. For more on this subject, check out our post on skills-based hiring around the world .

7. Maryland, USA

In 2022, the state of Maryland dropped four-year degree requirements for thousands of jobs in the government sector.

The aim of this initiative was to draw attention to the value of alternative credentials and experience. State officials want to give people a better shot at securing a stable, fulfilling job.

Governor Larry Hogan was quoted as saying:

“[W]e are ensuring qualified, non-degree candidates are regularly being considered for these career-changing opportunities.”[3]

Over 38,000 people work for the state of Maryland and it’s estimated that more than half of those jobs can be performed by people whose alternative skill routes can easily substitute for a college education.

These alternative routes include:

Life experience

Non-relevant job experience

Hobbies and volunteer work

Alternative training

Community college education

Maryland estimates that about 47% of its working population are STARs (skilled through alternative routes). That’s 2.8 million workers, and these people need solid opportunities – opportunities that they can access through skills-based hiring.

To learn more about how unnecessary degree requirements are holding top talent back, read our blog on degree inflation .

8. Indiana, USA

Indiana’s tech leaders are struggling to attract and retain great talent. They’re facing a major skill shortage and they can’t solve it with the “usual” hiring methods.

Traditional recruiting methods exclude over 95% of Indiana’s workforce.

Indiana has a workforce of 3,332,239 people, but consider this:

A four-year degree requirement removes 75%

Biases can eliminate up to 30% of the pool

Requiring specific past experience removes 93% of the talent pool

With all of that in mind, a pool of more than three million candidates is reduced to just over 42,000.

Indiana’s Office of Technology (IOT) realized that skills-based hiring practices could fix this problem and solve their shortage.

They started by removing degree requirements from most job descriptions, then took the next step and started offering reskilling opportunities to workers from alternative industries, such as line cooks and truck drivers.

Tracy Barnes, IOT’s chief information officer, said that the results of the program have been positive and they’re “very pleased” so far. She also said that she’s equally excited to see the positive life impacts for the candidates involved.

9. Asia-Pacific

Skills-based hiring is quickly gaining traction in the Asia-Pacific area.

One study showed that 79% of businesses in the Asia-Pacific area look for skills when hiring versus the 21% that prioritize education and experience.[4]

The same study found that internal mobility is more important than ever and that companies want to prioritize gender equality and disability inclusion . These points can also be accomplished by adopting skills-based hiring.

Asia-Pacific is looking to skills-based practices to improve the future of their recruitment processes, but Singapore-based TruTrip is already reaping the benefits .

TruTrip is a business travel management company that needed help assessing candidate skills and hiring the best candidates, so they gave TestGorilla a try.

Here are a few ways that TestGorilla’s pre-employment skills testing helped TruTrip’s recruitment processes:

Gives them a way to objectively assess applicants’ skills and knowledge

Helps them eliminate bias from the hiring process

Enables them to consistently make better hiring decisions

Reduces their reliance on resume screening

Enhances teamwork and communication

Improves the employee experience of new hires

According to Hugh Batley, the founder of TruTrip, their new hires are a better fit. These employees become great contributors and have a better initial experience with the company.

TestGorilla also helps TruTrip save thousands of dollars by reducing the chances of a costly mis-hire. 

This isn’t unusual. According to TestGorilla’s State of Skills-Based Hiring report, 92.5% of organizations using skills-based practices saw a reduction in mis-hires in 2022.

10. The UK and the EU

The UK and the EU have developed a strong focus on skills over the past few years.

Interest in skills-based hiring in the UK rose 63% from 2021 to 2022 . This drastic increase is due to employers wanting a wider talent pool and candidates prioritizing and valuing their alternative experience.

This move is helping job opportunities reach the 73.6% of people in the United Kingdom who don’t possess a four-year degree. [5]

As for the European Union, they developed the “Pact For Skills” program in 2020. This program was created to encourage and fund better upskilling and reskilling while also promoting greater diversity and gender equality.[6]

A good example from both areas is the British-Lithuanian bank, Revolut.

Revolut adopted skills-based hiring by using TestGorilla’s skills tests and, as a result, improved their time-to-hire by 40% .

Among many other benefits, Revolut found TestGorilla’s language tests life-saving. Assessing language proficiency is essential for a multinational company, but traditional methods are time-consuming and laborious.

TestGorilla’s language tests help Revolut to quickly and easily evaluate their candidates’ reading, writing, listening, and speaking skills. This helped them to nearly fully automate their screening process, improving time-to-hire greatly.

To read more case studies and success stories about skills-based hiring, check out our 10 stories that demonstrate the power of skills-based hiring or our collection of customer case studies .

Here are 3 top picks from our case studies:

Revolut improves time-to-hire by 40% using TestGorilla

Design Pickle uses TestGorilla to boost application completion rate by 25%

TestGorilla helps TruTrip to save money and improve employee experience

If you’d like to acquaint yourself with a solid skills-based hiring practice, browse our test library and review our skills tests.

“JVS 2022 Impact Report”. (2022). JVS . Retrieved March 6, 2023. https://impact2022.jvs.org/

“Maria Black, president and CEO”. (n.d). Business Roundtable. Retrieved March 6, 2023. https://www.businessroundtable.org/about-us/members/maria-black-president-and-ceo-adp

McGraw, Mark. (April 4, 2022). “Dropping Degree Requirements: Do Employers Still Care About Education?”. World at Work . Retrieved March 6, 2023. https://worldatwork.org/resources/publications/workspan-daily/dropping-degree-requirements-do-employers-still-care-about-education

“The Future of Talent”. (2021). LinkedIn . Retrieved March 6, 2023. https://business.linkedin.com/content/dam/me/business/en-us/talent-solutions/resources/pdfs/future-of-talent-whitepaper.pdf

“Overview of the education system”. (2022). Education GPS . Retrieved March 6, 2023. https://gpseducation.oecd.org/CountryProfile?primaryCountry=GBR&treshold=10&topic=EO

“Pact for Skills”. (November 10, 2020). European Commission . Retrieved March 6, 2023.  https://ec.europa.eu/social/main.jsp?catId=1517&langId=en

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• 21 Nov 2023
• Cold Call Podcast

Cold Call: Building a More Equitable Culture at Delta Air Lines

In December 2020 Delta Air Lines CEO Ed Bastian and his leadership team were reviewing the decision to join the OneTen coalition, where he and 36 other CEOs committed to recruiting, hiring, training, and advancing one million Black Americans over the next ten years into family-sustaining jobs. But, how do you ensure everyone has equal access to opportunity within an organization? Professor Linda Hill discusses Delta’s decision and its progress in embedding a culture of diversity, equity, and inclusion in her case, “OneTen at Delta Air Lines: Catalyzing Family-Sustaining Careers for Black Talent.”

• 14 Nov 2023
• What Do You Think?

Do We Underestimate the Importance of Generosity in Leadership?

Management experts applaud leaders who are, among other things, determined, humble, and frugal, but rarely consider whether they are generous. However, executives who share their time, talent, and ideas often give rise to legendary organizations. Does generosity merit further consideration? asks James Heskett. Open for comment; 0 Comments.

• 07 Nov 2023
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• 16 Oct 2023

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• 26 Jul 2023

STEM Needs More Women. Recruiters Often Keep Them Out

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• 18 Apr 2023

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• 31 Jan 2023

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• 05 Dec 2022

5 Companies Where Employees Move Up the Ladder Fast

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Recruiters: Highlight Your Company’s Diversity, Not Just Perks and Pay

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• 22 Apr 2022

Companies Can Expand Their Talent Pool by Giving Ex-Convicts a Second Chance

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• 08 Dec 2020

Why Companies Hunt for Talent on Digital Platforms, Not in Resume Piles

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• Working Paper Summaries

The Gender Gap in Self-Promotion

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When sales forces are well managed, firms can induce greater performance from them. For this study, the authors collaborated with a major multinational firm to develop and estimate a dynamic structural model of sales employee responses to various management instruments like compensation, training, and recruiting/termination policies.

Dr John Sullivan Talent Management Thought Leadership

Amazon recruiting – a case study of a giant among children.

January 17, 2022

Compare their results to all others, and you too will call Amazon… A Giant Recruiting Machine.

Note this case study is designed for quick scanning.

Yes, Amazon recruiting is in a class by themselves because they relentlessly hire when others cry for applicants. Of course, I don’t loosely use the phrase “A giant among children.” However, after doing numerous corporate case studies over the years covering other recruiting powerhouses (including Google, Apple, and Facebook). I quickly found that their record recruiting volumes across a broad range of jobs and locations could only be labeled as breathtaking. And just by chance, if you think that I’m not giving enough credit to most other corporate recruiting functions (even Google pales in comparison). You should realize that only a mere 18% of HR professionals even describe their own recruiting function as “top-notch” or “advanced.”

The Six Pillars Of Recruiting Excellence At Amazon

This Amazon case study reveals the many factors that cause Amazon’s recruiting function to be so far ahead of the competition. They are truly a giant because they excel in each of the six pillars of excellence in recruiting. The six pillars that make Amazon so successful are:

• Their recruiting impacts business results
• Their proven capability of handling huge recruiting volumes across a wide range 
• Their fanatical insistence on quality hires
• A scientific data-driven recruiting approach is the foundation of their success
• They utilize a one-size-fits-one agile hiring process 
• Their targeted recruiting sub-programs are second to none

Let’s jump immediately to the first and most important strategic pillar – Amazon’s record-breaking strategic business and recruiting results. 

Pillar #1. Amazon’s Recruiting Impacts Business Results

Amazon recruiting is aiming to go beyond simply producing recruiting results. And to also directly impact their corporation’s business results. Those results include:

• Hiring is the single most important element in Amazon’s business success – Jeff Bezos made it clear. “Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success” (that’s not just the most important HR function, but the most important business function). Jeff began making this recruiting priority clear in the company’s very first annual shareholder letter in 1998. Most other corporations don’t admit this reality. But, it’s simply not possible for a large corporation to innovate and grow rapidly without fully funded exceptional recruiting. 
• Yet with all this emphasis, recruiting remains their primary challenge – The CFO recently publicly revealed that even with its current high priority, recruiting maintains a primary challenge. When he noted, for example, in the package movement area, “The availability of workers is Amazon’s primary challenge .” Rather than resting on their laurels, they realize that they continuously need to get much better is a primary reason they continue to improve in recruiting. 
• Amazon’s size and growth are made possible by its excellence in recruiting – the prime limiting factor that restricts the company from maintaining its quantum growth rate is the ability to successfully recruit a huge volume of employees each year. And because Amazon employs about 1.4 million people globally , they have already done a high recruiting volume. The employee headcount makes them the US’s second-largest private employer (after Walmart). I predict that they will soon surpass Walmart for the #1 spot as the largest employer in the US. I would also note that Amazon has helped to reduce unemployment. Because of the 400,000 people they hired for their U.S. operations network, 45% were previously unemployed. Their new CEO, Andy Jassy, reinforced the importance of continuous growth through recruiting by announcing that he was planning to hire 55,000 people for corporate and technology roles globally during his first months. That’s close to all of Facebook’s current headcount and nearly 1/3 of Google’s headcount.
• Recruiting has made a major contribution to its stock value – businesswise, their recruiting and operational excellence have directly contributed to the corporation’s incredibly high stock valuation. Currently, Amazon is the fifth most valuable global company in market cap valuation, nearly 1.65 Trillion dollars. 
• Recruiting has made a major contribution toward having an extremely productive workforce – the average revenue generated by each employee last year was $353,000, which is an amazing ROI. HR helped maintain that productivity by increasing management prerogatives by remaining a 100% union-free workforce. 

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Pillar #2.  A proven capability for handling a huge volume of recruiting across a broad range of positions and locations

Amazon recruiting has proven over the years that it has the capability of recruiting a huge number of new hires across many different job families and locations.

• Recruiting volume and capability are second to none – the fact that during 2021 Amazon’s recruiting increased headcount by a whopping 63%  in a single year. The largest percentage increase in headcount ever accomplished by any large employer during peacetime! This is but one startling indication of recruiting’s agility and capability to ramp up their recruiting capability dramatically. Amazon, of course, must have an exceptional recruiting capability because it is America’s second-largest employer (and I predict that it will soon surpass Walmart). The workload handled by their recruiting function is unparalleled because it has as many as 30,000 openings at a single time.
• Powerful Employer Brand means that everyone considers them – it is clear that because of its HR work, Amazon is recognized as an excellent place to work. And its rankings, notoriety, and exposure are major contributors to its recruiting success. Some of their notable recognitions include:
•  This year, LinkedIn’s top US employer ranking – Amazon ranked by the prestigious professional network LinkedIn as the #1 company where Americans want to work and develop their careers. 
• A global best employer also – this year and a ranking of global employers, Amazon was ranked #2 on the “World’s Best Employers” list by Forbes. 
• Fortune’s world’s most admired companies – this year, Amazon was ranked #2 on Fortune’s prestigious “World’s Most Admired Companies” list for the fifth year in a row. (After Apple). 
• BCG’s most innovative firms – this year, the Boston Consulting Group rated Amazon #3 on their “most innovative firms” list (after Apple and Alphabet). 
• Amazon is the best at attracting a record-breaking volume of applicants – as previously noted. In 2020 Amazon received a record-shattering 30 million applications , an all-time record. But it is especially impressive because it occurred when almost every major corporation and business struggled to get even a few applications for each job. The attractiveness of Amazon is illustrated by the fact that they received a breathtaking “ 1 Million Job Applications (in 1 day) ” as part of their 2021 annual Career Day event.
• Amazon has the capability of recruiting over an amazing range of jobs – companies like Google and Facebook have an easy recruiting job because they recruit mostly engineers. In comparison, Amazon must have the capability of recruiting everything from AI experts, pilots, book specialists, entertainment specialists, and cloud experts down to package handlers. In fact, Amazon can recruit across five extremely diverse business units (Amazon.com, AWS, Alexa, Whole Foods Market, and Amazon Prime) and 32 distinct technical groups. Their new Project Kuiper will even require them to hire rocket scientists as they attempt to launch satellites into orbit to widen their broadband access. In my view, their recruiting leaders deserve major kudos for developing their recruiting capability in so many completely different skill areas. And because they are a technology company, they rely heavily on technology throughout their recruiting function. 
• Amazon’s recruiting capability is truly global – because it is a worldwide e-commerce company, Amazon operates and recruits in 13 countries. In the US alone, it operates more than 930 facilities (including two headquarters locations). And last year, it received job applications from 170 different countries.

Pillar # 3. Fanatical Insistence On Quality Hires

Their third and most important pillar of recruiting excellence is their fanatical insistence on only hiring quality candidates. In comparison, few corporations spend the time defining and measuring the quality of hire (i.e., top-performing new hire). And only 36% even attempt to measure the quality of hire . Amazon ensures that they will get those quality hires using seven unique recruiting approaches. They include:

• Their goal is to be the “Earth’s Best Employer” – yes, Jeff Bezos’ stated, and only a little bit outrageous, goal is to make Amazon “ the world’s best employer . However, in my experience, it is a goal that they have already met. Executives, managers, HR professionals, and recruiters work together to reach it. In their words, they reach that goal because  “Their leaders work every day to create a safer, more productive, higher-performing, more diverse, and more just work environment. They lead with empathy, have fun at work, and make it easy for others to have fun. Leaders ask themselves: “Are my fellow employees growing?” “Are they empowered?” “Are they ready for what’s next?” “Leaders have a vision for and commitment to their employees’ personal success, whether that be at Amazon or elsewhere.”
• The Bezos approach to hiring is laser-focused on quality – their hiring managers and the recruiting function’s insistence on quality has remained solid throughout the years. I find that this fanatical insistence on quality is in direct contrast to the approach taken by most hiring managers at other corporations. During this candidate shortage, managers have been allowed in desperation “to fill butts in chairs.”

Amazon’s #1 advocate of hiring only quality employees is Jeff Bezos. He has shown his expectations in many often-repeated quotes, statements, and expectations. Including: 

• “It would be impossible to produce results in an environment as dynamic as the Internet without extraordinary people… Setting the bar high in our approach to hiring has been and will continue to be the single most important element of Amazon.com’s success.”
•  “If you can’t hire quality, don’t hire at all.” “I’d rather interview 50 people and not hire anyone than hire the wrong person.”
• “Don’t “settle for second best” when hiring. Instead, “Do what it takes to find the best people available.”
• “Every time we hire someone, he or she should raise the bar for the next hire so that the overall talent pool was always improving.” Bezos “ doesn’t care about an efficient hiring process .” “And he certainly “Doesn’t believe in making a hire, simply for the sake of filling an open role.”
• At Amazon, raising the bar means answering three questions for each candidate. First, “Will this person raise the average level of effectiveness of the group they’re entering?” Next, it asks, “Will you admire this person?” And last, it asks, “In what important area might this person be a superstar?” (In cases where they should be placed in a different job than they applied for). 
• Amazon utilizes “bar raisers” as its primary way to ensure quality – a key Amazon expectation for leaders – “Is to raise the Amazon’s use of “ bar raisers .” They get that name because their sole role is to ensure that each new hire will “raise the bar over the last incumbent” in each open job. The work during the interview process is to provide outside and neutral candidate assessments. To prevent a candidate from focusing on these individuals, they are anonymous to the candidate. These quality control individuals are from outside the team that is doing the hiring. And as a result, they are more likely to be critical because they don’t face the same “pressures to immediately fill the job” that hiring managers and teammates do. With this volunteer role, they accept the responsibility to literally “veto” any candidate they feel will not be a good fit for Amazon. Amazon’s new hires are quality employees because Amazon promoted more than 68,000 employees globally during 2020.
• Hiring is a unanimous team decision – a second method for ensuring that they only hire a quality candidate requires a unanimous team decision. One prominent former Amazon executive noted that Bezos “ Believes hiring should not only be a team effort. It should be a team decision.” So in most cases, “After final interviews, each member of the hiring team meets in a room to share their opinions on each candidate. And after a discussion, a vote takes place, and the results have to be unanimous for the person to be hired.” A single “no” vote would mean that the team will have to go back and search again for the ideal employee. 
• Amazon’s “unregretted turnover metric” helps fix hiring errors – Amazon assigns an “unregretted turnover metric” to its managers. It serves as an imperfect post-hire check on weak performing employees that somehow made it through their hiring process. This after-hiring double-check mirrors the approach that General Electric had under Jack Welch. Under this “regrettable turnover metric,” Managers at Amazon have a target rate for annual employee turnover. This means they are expected to lose a specified number of employees that they “ wouldn’t regret losing ” (i.e., below-average performing employees). Although this practice may appear harsh on the surface, it forces hiring managers to reassess each new hire periodically. 
• Paying employees to quit – this “Pay Employees to Quit” approach is a second post-hiring check on quality under this program (borrowed from Zappos). Amazon proactively offers incentives to unhappy recent hires during their first five years. The goal is to force unhappy recent hires to take a minute once each year to decide if they “really want to stay.” Based on the premise that keeping workers unsure of their commitment to Amazon will harm both the customers and the team. So if a worker decides that they don’t want to be here, they can get between $1000 and $5000 for walking away.
• Finally, improve new-hire quality by assessing candidates on Amazon’s leadership principles – one of the primary ways Amazon maintains quality hiring and fit. By assessing every candidate on Amazon’s published “leadership principles.” So each candidate at Amazon is expected to know and commit to following them ( these principles are posted on their jobs website ). As a result, everyone involved in hiring is expected to assess every candidate’s knowledge and commitment to these principles. At least 3 of these 15 principles relate directly to recruiting. Those three principles are below:
• Hire and develop the best – leaders raise the performance bar with every hire and promotion. They recognize exceptional talent and willingly move them throughout the organization. Leaders develop leaders and take their role in coaching others seriously. We work on behalf of our people to invent mechanisms for development like Career Choice.
• Insist on the highest standards – leaders have relentlessly high standards. Many people may think these standards are unreasonably high. Leaders continually raise the bar and drive their teams to deliver high-quality products, services, and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed, so they stay fixed.
• Deliver results – leaders focus on the key inputs for their business and deliver them with the right quality and timely fashion. Despite setbacks, they rise to the occasion and never settle. 

If you’re interested in the 12 remaining leadership principles, click here . The remainder mostly focuses on key workforce capabilities, including customer obsession, innovation, learning, and ownership of problems.

Pillar #4. A scientific data-driven approach is the foundation for their success

During my assessment, I found that a primary reason why Amazon recruiting excels in so many different areas is that it operates under the umbrella of one of the most strategic HR functions. Their HR function is guided by 7 HR tenets , which are the guidelines that every HR function follows to “Maintain a Culture of Builders and Innovators. In my experience, shifting to a data-driven approach is required to maintain a culture in a large organization. Fortunately, Amazon is one of only a handful of HR functions (along with Google, Sodexo, and Nestlé Purina) that already makes decisions based on data and results metrics. Find that HR tenet in the box below. 

Every strategic recruiting function should know and follow three additional Amazon HR and leadership tenets. They are:

• Recruiting must focus on directly impacting business results – because BCG research revealed that “ recruiting has the highest impact on business results .” Therefore, it makes sense to follow and adhere to their HR tenet “We manage HR as a business.” Acting like a business starts with, rather than simply “aligning with business goals,” recruiting leaders purposely set recruiting goals and manage recruiting actions and resources to produce the maximum direct and measurable impact on business results. The next step is to reduce recruiting approaches that can’t demonstrate their business impact. And the final step is to convert recruiting problems and results into their dollar impact on corporate revenue (e.g., our recruiting efforts on sales jobs allowed us to maintain $232.5 million in sales revenue). Reporting recruiting results in dollars of revenue impact allow executives to quickly compare your dollar impacts to those from other HR and business functions.
• You must assume continuous obsolescence along with rapid learning – you should also follow another of Amazon’s HR tenets. Which is “Learn and Be Curious.” Because in an unpredictable world, you simply can’t prepare for most things. The secret to thriving is rapid continuous learning immediately as new problems and opportunities arrive. So the first step in a recruiting world where everything changes should be operating under the assumption that every current thing in recruiting will soon become obsolete. And, of course, you won’t be able to detect that obsolescence without collecting and applying performance data. Next, you must also continually be looking for a replacement for every current recruiting approach and tool. And that can only be accomplished by continuously learning about evolving business and recruiting approaches at other advanced companies. To identify the ones that might be applied to your recruiting situation. And finally, you won’t be able to determine if your new solutions are superior without following the tenet hypothesis testing covered in the next bullet point. 
• The utilization of hypothesis testing and experimentation – perhaps the most prominent difference between traditional and scientific recruiting is an insistence on hypothesis testing to discover what works and what doesn’t. The HR tenet is “ We form hypotheses about the best talent acquisition, talent retention, and talent development techniques and then set out to prove or disprove them with experiments and careful data collection.” For example, a split-sample experiment could prove or disprove the hypothesis that “Diverse interviewers select more diverse candidates” (They don’t). Google HR has also long been a supporter of hypothesis testing. An outrageous example of Amazon’s hypothesis testing occurred when their AWS group experimented by placing a job ad on the Tinder dating site.

Amazon Recruiting – A Case Study Of A Giant Among Children (Part 2 of 2 parts)

Today, every manager needs to learn great recruiting… and to find it, they need only follow Amazon!

The title of this case study includes the phrase “A Giant Among Children.” That’s just how large I found the differential between Amazon’s recruiting and the recruiting practices at most corporations. And if you take the time to read this case study, I am sure that you will agree with the sharp assessment. Of course, many managers already justifiably study Amazon because of its excellence in well-known areas, including customer service, supply chain, and cloud computing. However, most don’t realize that Amazon can only excel in so many divergent business areas because it is “a recruiting machine .” It recruits effortlessly even during our current talent shortage when most others starved for applicants. This case study is designed to show you their best practices and what makes them “a recruiting giant among children.” 

Pillar #5. Amazon’s amazing array of targeted recruiting programs

In my view, the most surprising of all of Amazon’s 6 pillars of excellence is their willingness to develop and offer numerous individual recruiting and career transition programs that are “customized” to the needs of distinct groups of candidates and employees. Targeting subprograms is essential because different groups are attracted and motivated by different offerings. At Amazon, they specifically target a wide array of people, including diverse women, veterans, the elderly, and those that need internal movement or an upward push. Unfortunately, space limitations prevent me from highlighting all of the amazing, targeted programs in operation at Amazon. However, you will find a representative sample of 14 of their exceptional targeted recruiting programs below. The programs that likely have the largest impact appear first on the list.

• The Returnship program helps the unemployed reenter the workforce – The Returnship is a reentry program designed to help the underemployed and those who have been out of the workforce for at least a year (usually due to unemployment, children staying at home, or Covid concerns). This program aims to provide this target group with a rare opportunity to restart their careers by joining Amazon. At the beginning of the program, “returners” work on a specific project. And after four months, they have earned the possibility to move into full-time positions at Amazon. During those four months, participants work remotely from home. If they need it, they provide child and elder care assistance. So they can ease back into the workforce without making any major life changes while they are in this program. And when they accept a permanent role, Amazon will also pay for their relocation if needed. Since their Returnship pilot initiative in January of 2021, Amazon reports that the program has enrolled more than 60 people, and 95% of them received an offer for a full-time role at Amazon. In the future, Amazon has stated that they plan to hire 1,000 professionals into the program during the coming years in roles ranging from finance to engineering.
• The Best Fit Program makes it easier for software engineers to find their perfect job – this best fit program is an accelerated job identification program. Designed specifically to help software engineers that are applying find their perfect job fit among all relevant Amazon jobs. This program helps make their job search at Amazon quicker and more accurate. Those in the program can avoid putting in the traditional multiple hours of searching for their right job. It allows these software engineers to apply once and then be automatically considered for thousands of relevant jobs across the company. A combination of electronic and human matching approaches finds the jobs that fit their preferences during the first step. For their ideal kind of team and their desired working style. But the program will still recommend jobs in new areas in which Amazon thinks they would also be successful. During the last part of the process, applicants get to meet all of the hiring managers for each of the recommended jobs. And finally, they get to choose their first job at Amazon.
• The Career Choice Program supports employees who want a college degree – support for getting a college degree or GED is a major attraction factor. One of the goals of this Career Choice educational opportunity program is to help lower-level Amazon employees transition into more lucrative paying and high-demand fields (and perhaps even leaving Amazon). For eligible employees, Amazon will now pay 100% of its employee’s college tuition and fees for earning a diploma or certificate in a qualified field of study at eligible schools. Recently the program has been updated to allow more flexibility.
• The UX Apprenticeship – It encourages development in research and design – Amazon’s User Experience Design and Research Apprenticeship program provide a combination of instructor-led training and real-world experience in a one-year program. It offers employees the opportunity to learn and develop research and design skills on Amazon teams, including Prime Video, Alexa, AWS, and Amazon Fashion. Apprenticeship graduates can move into jobs that help improve the experience of Amazon customers, from making payments easier on Amazon sites to designing features that make devices more accessible.
• Surge2IT – Proactively encourages career advancement in IT – their Surge2IT program is another career transition program designed to help entry-level IT employees across Amazon’s operations network. It focuses on IT employees who don’t possess a software development degree. After completing this program, they can become software development engineers after about nine months. This program allows lower-level IT employees to pursue careers in higher-paying technical roles through this self-paced learning resource. The course helps employees develop the skills necessary to advance their careers in the information technology field. Participants who complete this course and move up at Amazon can make up to an additional $10,000 a year.
• The Amazon Technical Academy makes you a software developer in nine months – this career transition program requires nothing more than an interest in software development. It started as an experiment, and since then, it has successfully enrolled hundreds of employees. Amazon Technical Academy builds on their initial interest by training them in the essential skills needed to transition to an entry-level software developer engineer role at Amazon. The program is free for their employees. And it requires a high school diploma or GED. And the fortitude to get through a rigorous nine-month, full-time program that expert Amazon software engineers created.
• The Mechatronics program prepares employees for robot maintenance jobs – under this career transition program in robotic repair . It is designed for employees interested in learning engineering and mechanical skills necessary to repair and maintain the equipment and robots inside Amazon facilities. Those that are accepted get the opportunity to go back to school for a free 12-week course. After that, employees begin a year of on-the-job learning under a technical maintenance specialist. After completing this final step, employees who now have these highly sought-after skills are eligible for a full-time role as a mechatronics and robotics technician, which may increase their paycheck by up to 40%.
• Project Juno – aids in relocating current employees – this internal movement program helps out when a current employee must relocate. After they have decided that they must move, this Amazon job finding process electronically finds the relocating employee the same or a similar job available at the Amazon facility in their new city.
• CamperForce – This Program offers jobs to traveling seasonal workers – CamperForce offers jobs for those who travel in RVs and work along the way. They are known as Work Campers. And because Amazon especially needs people to work in its warehouses during the holidays. They now encourage and hire seasonal help that live in a trailer or RV. In addition to welcoming them, Amazon pays them a small monthly stipend to live in their own trailer at an RV facility close to an Amazon warehouse site where they will work.
• The Military Spouses Program –  provides jobs for military spouses – the goal is to find jobs for the spouses of Amazon’s 45,000 veteran and military employees. Designed to find military spouses an appropriate job at Amazon. Either for the first time or when he or she must relocate along with their military spouse. In addition, Amazon recently pledged to hire over 100,000 U.S. veterans and military spouses by 2024, further building on their commitment to military families. 
• Amazon Warriors – provides support for transitioning veterans – this veterans support program is designed to help recent veterans transition into Amazon’s workforce. It helps by offering a professional network of Amazon employees that are veterans. It also provides a mechanism for community outreach.
• People with disabilities – They have their own targeted website – Amazon offers a targeted site specifically to meet the needs of applicants with disabilities. The site also educates them on how to take the best advantage of what Amazon has to offer applicants and employees with disabilities.
• Amazon hires felons – Amazon has no blanket policy against hiring felons. In fact, they are open to hiring them into seasonal jobs. Depending on the type of felony, time since they fulfilled their sentence, and the corrective actions completed, however, after successfully completing that initial assignment and based on their performance. The felon may then be considered for a more permanent position. 
• Amazon employee referrals – like most large corporations, Amazon has a formal referral program. Unfortunately, I only rate it as a little better-than-average because only 11% of those interviewed are employee referrals . And they pay a range of bonuses up to $5000 for a referral that is hired .

Pillar #6. Unique elements in their “one-size-fits-one” agile hiring process

I have discovered 7 unique hiring process elements that contribute to making Amazon’s hiring process highly agile, flexible, and adaptable. These seldom found elsewhere elements make it possible for their hiring process to adapt to the recruiting needs of every Amazon business unit and location. Those unique elements include:

• By design, their hiring process flexes to fit every unique job – they hire in so many global locations and across so many jobs from pilot to janitor. Their candidate assessment process must be modifiable to fit the unique assessment requirements for each job family. We call this capability “one-size-fits-all one.” Of course, the hiring process includes the basic elements for all jobs, including the standard ATS/recruiter resume screen, a phone screen, and at least one structured remote or live behavioral interview. Some portion of that interview will be devoted to assessing the candidate’s understanding of Amazon’s culture through its leadership principles .  However, the interviews will likely last all day for most professional jobs. Often it will include an online test and a verbally presented work sample or problem to complete. The candidate may also be asked to write up an idea in a press release format (because that’s the way ideas are presented at Amazon). Or, developers may be required to participate in a virtual or in-person interactive whiteboard exercise for developer jobs where they have the candidate walk them through the steps they would take to solve a current software problem. In the end, the team will always make the final hiring decision, and the “bar raiser” gatekeeper will have the option of vetoing that choice.
• To increase innovation, Amazon specifically targets problem-solving skills – one thing that is common across all business units at Amazon is the need for innovation. And as a result, Amazon targets candidates that thrive at solving a never-ending queue of complex problems. They consider a spirit of innovation part of their DNA at Amazon. They clearly state upfront that they are looking for “analytical and critical thinkers with great judgment, who can both think big and roll up their sleeves to solve hard problems on behalf of our customers.” 
• Amazon increases its applications by removing the mystery from its hiring process – many firms talk about their “candidate experience.” However, I have found that applying for a job at most firms is a long way from being user-friendly. We know this because the number one complaint from applicants is almost always that the hiring process that they are about to face “is a complete mystery.” Amazon, instead, leads the way ( along with J&J ) in removing the mystery out of what the candidate can expect during their hiring process. They offer an extensive array of numerous free resources that guide applicants ( our hiring process website ) to meet this goal. It highlights what any candidate can expect from the day they apply until they begin work. In addition, they also offer suggestions on the best interviewing practices for its candidates to follow on its YouTube channel and its LinkedIn feed . They also make it clear that serious candidates must study the company’s leadership principles mentioned earlier. Finally, they help applicants understand the different teams they can work in. By providing them with a list of the 32 possible teams , a description of what they do, and how many open jobs are currently open in each team. They even have a “best-fit program” that uses artificial intelligence to help software engineers find their perfect job within Amazon.
• Amazon holds a national Career Day event like no other – many firms, including McDonald’s and Walmart, hold “national hiring days.” However, I find that they pale in comparison to Amazon’s. They call their unique Career Day “America’s biggest training and recruiting event.” It actually is unique because it goes well beyond the typical job fair. In addition to displaying open jobs, it offers remote personalized career coaching sessions and even some tactical training. It further provides candid advice on how job seekers can start, build, or transition their careers at Amazon. Last year, they received 1 million applications for their Career Day event.
• Amazon relies heavily on seasonal workers as a talent pipeline source – research has shown that often the new hire has the highest probability of success. Someone that has recently successfully served as a temp, intern, or contractor at the organization. Amazon takes advantage of this high-quality source by hiring well over 100k seasonal workers each year. In addition to filling their seasonal need, the seasonal workforce serves as an effective screening process for determining which seasonal workers should be offered a full-time job. It also gives the worker a chance to determine if they really want to work at Amazon.
• They use FC brand ambassadors to improve their brand proactively – I’ve never seen this done before. But, to counter the massive amounts of negative Twitter messaging found about working at their warehouses. Amazon has asked long-term employees at its fulfillment centers to act as brand ambassadors in an extraordinary move to improve their online employment branding. They don’t get extra pay, but they get $50 gift cards as a small reward for tweeting positive things about working in their warehouses.
• A shift in emphasis to remote and broader college recruiting – makes college recruiting more effective, diverse, and remote. Amazon is curtailing some campus visits and heavily emphasizing virtual student meetings. It has also broadened its reach to many more campuses to get added diversity to the point where for example, last year, it extended offers to students from 80 M.B.A. programs (instead of exclusively going to a few elite schools).

Amazon Utilizes Data To Identify The Most Powerful Attraction Factors

Rather than assuming that applicant attraction factors stay the same in a fast-changing world. A critical part of Amazon’s highly agile and adaptable recruiting process is continually gathering data to update “the most effective attraction factors” for their targeted potential applicants. Here are 8 examples of how they identify the attraction factors and the current ones.

• They start by using data to identify the most current attraction factors – most corporations simply guess at them or assume that they are the same as last year. In comparison, Amazon uses data to identify its current attraction factors. At Amazon, these attraction factors currently fit into four categories. Each of the four is emphasized on their main career website . The four primary attraction categories include benefits , career advancement , work/life balance, and culture . As part of their data-driven approach, they continually survey new hires to determine the general and the specific factors that actually attracted them to Amazon. And last year, 93% of their new hires cited Amazon’s Career Skills and Upskilling training program s as their top attraction factor. As a follow-up, Amazon is investing $700 million in upskilling 100,000 employees in the U.S. by 2025.
• They proactively encourage work/life balance – although some may argue about their level of success. Amazon boldly lists work/life balance as one of its four primary attraction categories. And on its work/life balance website , it describes how Amazon strives to help its employees reach that balance.
• Amazon is acting to reduce applicant health and injury concerns – during the pandemic. Amazon has focused on reducing Covid risks and workplace injuries as roadblocks that reduce potential warehouse applicants. So in that light, Amazon is currently developing a new automated staff schedule process. It reduces the risk of injury by utilizing computer algorithms to rotate employees between jobs when completed. A more frequent rotation is needed because their data reveals that roughly 40% of their work-related fulfillment center injuries are due to sprains and strains caused by repetitive motions. 
• Higher base pay – Amazon was one of the first companies to realize that they needed to raise employee pay and its hourly jobs in a tight U.S. job market. So Amazon’s average starting wage is now over $18 per hour, with an additional $3 depending on their shift.
• Sign-on bonuses – like many companies, Amazon has begun offering significant sign-on bonuses at some of their fulfillment centers (up to $4000).
• Being dog friendly is surprisingly an attraction factor – in work areas where it is safe. Amazon is one of the few companies that actively encourage dogs in the office. And because of their efforts, Amazon was listed as the #1 dog-friendly company in the US by Rover.com . Their leadership has noted that “Amazon has found that dogs in the office actually contribute to their collaborative company culture.” 
• They stopped testing applicants for cannabis –   in many states recreational or medical cannabis use is now legal. Amazon has been a leader in announcing that it will no longer screen finalist candidates for marijuana use. In part because this testing was unnecessarily reducing their candidate pool. But Amazon went one step further. It alerted its independent delivery service partners that if they too stopped testing for marijuana during their application process and prominently advertised that fact. They could boost their own business’s job applications by up to 400%.
• They offer anytime pay – this last attraction factor may not seem like much. However, it has proved to be an attraction factor for the many hourly workers that live paycheck to paycheck. Amazon’s free fast pay program offers the option, in some jobs, for eligible employees to receive 70% of their eligible earned pay whenever they choose (24×7).

Of course, Amazon is working on its weak points

Amazon is still far from perfect in areas other than recruiting despite all its efforts. Despite its ranking by LinkedIn as the #1 employer. They still receive relentless criticism because of their corporation’s size, speed of innovation, impact on small businesses, their percentage of diversity, and the waste they produce. Even some innovators criticize them for excessively keeping some innovative projects secret from other internal teams (just like Apple). 

In management, they have also received volumes of criticism, especially because of their anti-union stance and their common practice of continually replacing “human jobs” with robots. The media revealed that they once selected which workers to release using an algorithm, and they subsequently fired them via email. Its managers have been criticized for not telling their employees when placed under a performance management plan. They are also well-known for their fast-paced work environment that some argue can lead to excess injuries and employee burnout. And as a result of that work stress, in some cases, they have had to pay “show up bonuses” to reduce their sometimes-rampant warehouse absenteeism. Finally, as most great firms do, they have a relatively high employee turnover rate. This can be partly explained because they are constantly under attack by their competitor’s recruiters, who are logically targeting their exceptional talent. 

Final Thoughts

Today when I am asked by those beginning their career where they should work, I, without hesitation, say Amazon. It is primarily an innovation machine that dominates in so many different product areas and across so many industries. In the same light, if you are a recruiting leader, your goal is to lead your industry in recruiting and HR eventually. It’s time to realize that you must focus your best practice research exclusively on Amazon. You can learn so much so fast (Note: the previous recruiting leader, Google, has lost its luster since Laszlo left).

If you’re interested in past case studies by Dr. Sullivan 

The initial landing pages for Dr. Sullivan’s previous case studies on Google, Apple, and Facebook can be found on his www.drjohnsullivan.com website by clicking here . You can go directly to the introductory part of his four-part Apple case study by clicking here . The first part of his Google recruiting case study can be found here . Part 1 of his Facebook case study can be found here .

Author’s Note  

• Please share these best practices by sending this case study to your team and network or sharing it on social media. 
• Next, if you don’t already subscribe to Dr. Sullivan’s weekly Talent Newsletter, you can do that here .
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Case Study: Improving Recruitment Processes – Part 2 of 2

Published: June 2, 2014 by Niraj Goyal

In this case study, a team strives to improve the recruiting process in a large, fast-moving consumer goods company. Part 1 focused on reducing the recruiting cycle time . Part 2 focuses on decreasing the effort required to fill a job opening .

The case described here uses total quality management (TQM) to address the problem of rising attrition in a large, fast-moving consumer goods company in India. Specifically, the HR team sought to reduce the time and effort involved in finding good candidates for open positions. ( Note: The details of the process have been condensed and modified for the sake of confidentiality and easy of storytelling .)

As in Part 1 of this article, which addressed the cycle time to fill open positions, Part 2 approaches the issue of reducing the effort required for each recruitment through the seven steps of problem solving:

• Define the problem
• Research the causes
• Generate countermeasure ideas
• Test and modify the ideas
• Implement ideas
• Standardize procedures
• Compile quality improvement story

Step 1: Define the Problem

The 22-step recruitment process as developed in Part 1 of this case study is shown in Table 1.

To improve any problem, it must be measurable ( problem = desired state – current state ).

Table 1 reveals two easily measurable inputs: 1) the number of resumes reviewed and 2) the number of interviews held. The overall output is the number of successfully filled open positions.

Two metrics to measure the improvement were agreed upon by the project team:

• Resumes scanned per candidate selected (R/C) and
• Interviews conducted per candidate selected (I/C).

Data from past recruitments was collected and is summarized in Table 2.

R/C = 100 / 16 = 6.25 I/C = (95+47+21) / 16 = 10.2

The goal of the team was to reduce these measurements by 30 percent.

Step 2: Research the Causes

For this step, the team used the 5 Whys to reveal the root cause or causes of the problem.

Why #1 : Why were there so many interviews for each candidate selected? As Table 2 shows, only 5 percent of the resumes were rejected in the first selection step. In each of the subsequent two interviews, the rejection rate increased to 50 percent. It was clear that if the resume review process could be improved such that the number of candidates rejected could be increased earlier in the candidate selection process, the process would be more efficient.

Why #2 : Why was the resume screening so ineffective? A test was done to expose the causes. There were three staff members who did the screening. A sampling from past selections was prepared, consisting of 10 resumes from which three candidates had been selected.

The three staff members were given the 10 selected resumes and asked to select which they would shortlist for interviews. The results are shown in Table 3 below.

* The staff member selected the resume of a candidate who had received a job offer.

Reviewer 1 had a much more efficient process of shortlisting than his colleagues as his ratio of shortlisted candidates was 3/7 (42 percent) compared to 1/4 (25 percent) and 1/6 (15 percent) of Reviewers 2 and 3.

Why #3 : Why do the employees have varying degrees of efficiency at scanning the resumes? The criteria each staff member used to review resumes was clearly different as shown by the varied results. To learn more, the staff members were asked to list the criteria by which they selected or rejected the candidates. Predictably, the number and type of criteria used by each staff member differed. These results were tabulated as shown in Table 4 below.

Step 3: Generate Countermeasure Ideas

A means for standardizing the basis for candidate selection was required. The first shortlisting of relevant criteria listed in Table 4 was reviewed with the following categories:

• Criteria listed by all three (e.g., 1 and 4)
• Criteria listed by at least two staffers (e.g., 2 and 6)
• Criteria used by Reviewer 1 since his selection was most accurate

Each criteria was discussed before coming to a final consensus on whether it would be included in the evaluation moving forward. The results of these discussions are shown in Table 5.

The list of shortlisted criteria was reviewed by department heads requesting recruitment efforts; additional criteria suggested by them were incorporated into the new criteria.

The list of criteria (10 items in the end) to be applied in selecting resumes was determined. To further refine the process, a weighted average table was used to develop the numerical weight for each criteria relative to the others with a total possible score of 100 for each resume reviewed against the selection criteria. The resume selection model was now ready for testing.

Step 4: Test and Modify the Ideas

The list of criteria was tested with three batches of past selections and proved effective.

Step 5: Implement Ideas

The process was implemented for all future recruitment.

Step 6: Standardize Procedures

The specific improvements are shown in Tables 6 and 7.

The changes to the process resulted in a 40-percent reduction in the average number of interviews conducted per candidate selected and a 34-percent reduction in the average number of resumes reviewed per candidate selected. The process was standardized and adopted for regular use.

Step 7: Compile Quality Improvement Story

The quality improvement story was compiled and presented to senior management.

About the Author

Niraj Goyal

11 min read

The success of any organization relies on its ability to attract, retain and develop top talent.  Talent acquisition  refers to the ongoing strategy and process an organization and its HR department uses to source, attract, evaluate, hire and retain the highly qualified new employees it needs to grow.

A well-crafted talent acquisition strategy has become a critical component for organizations seeking to secure a competitive edge. Beyond simply filling open roles, a comprehensive talent acquisition strategy encompasses a holistic approach to  talent management , from identifying organizational needs to nurturing relationships with potential candidates.

By recognizing the importance of a strategic and proactive talent acquisition approach, companies can position themselves as employers of choice. This approach can foster a culture that not only attracts the right candidates but also cultivates long-term success and sustainability.  

A talent acquisition strategy is a comprehensive plan that an organization develops to optimize its talent acquisition—the identification, attraction and retention of the right talent. It includes a series of interconnected processes and initiatives designed to align the organization’s talent needs with its business objectives. The strategy outlines the methods and processes for sourcing, screening and selecting candidates, while also focusing on employee retention and long-term development.

Talent acquisition strategy involves the use of various recruitment methods, technologies and practices. It enables HR professionals and the organization to build a strong employer brand, create a positive candidate experience and foster an effective, diverse and inclusive workforce. An effective talent acquisition strategy continually adapts to changes in industry trends and candidate preferences. It ensures that the organization’s talent acquisition efforts remain competitive and resilient.

An effective talent acquisition strategy includes elements designed to effectively attract, asses, identify and retain the best talent for the organization’s current and future hiring needs. The creation of a successful strategy should include these steps:

A compelling employer brand can set an organization apart, making it an attractive destination for skilled professionals. Many steps can be taken to build and enhance an employer brand, including:

• Define the employer value proposition (EVP):  Clearly articulate what sets the company apart as an employer—what it stands for and the kind of working environment it offers. Highlight the unique benefits, opportunities and culture.
• Create a compelling careers page:  Build an organized and informative careers page on the company website. Describe the application process. Use engaging content, images and videos to showcase the work environment.
• Collect and share employee success stories: Let employees describe their experiences working at the company, including career growth, work-life balance and company culture.
• Use social media:  Promote the employer brand on social media by sharing company news, employee stories and industry insights. Engage with potential candidates and encourage a sense of community.
• Offer competitive compensation and benefits:  Meet or exceed industry standards for pay and benefits packages and clearly communicate these offerings to potential candidates.
• Foster employee engagement and growth:  Create a supportive work environment that encourages employee engagement, professional development and career advancement.
• Initiate employee advocacy:  Encourage employees to become brand advocates. Provide them with tools to share positive experiences on their personal social media accounts and professional networks.
• Promote diversity and inclusion:  Widen the pool of top candidates by highlighting initiatives that demonstrate the organization’s commitment to creating a diverse and inclusive workplace.
• Provide a positive candidate experience:  Streamline the recruitment process to ensure a seamless and positive experience for all candidates. Communicate with transparency.
• Highlight work-life balance:  Showcase any flexible work arrangements, wellness programs or other initiatives that prioritize the health and happiness of employees.
• Attend industry events:  Participate in conferences, webinars, speaking engagements, award competitions and other events to establish a presence and engage with potential candidates.
• Monitor online reviews:  Respond to reviews, whether positive or negative, to demonstrate a commitment to improving and addressing concerns.
• Measure impact:  Use analytics and metrics to assess the effectiveness of branding efforts. Monitor website traffic, application rates and employee referrals to gauge their success.
• Seek feedback and continuously improve:  A positive candidate experience can contribute to a favorable employer brand. Gather feedback from candidates who go through the hiring process.

Conduct a thorough assessment of current and future talent that the organization requires to achieve its business objectives.

• Conduct an organizational analysis:  Identify key areas where new talent is needed to support the company’s current and projected business goals and growth plans.
• Determine short- and long-term talent needs:  Distinguish between immediate hiring needs and future requirements. Prioritize roles that require immediate attention.
• Develop candidate profiles:  Create personas for ideal candidates and write detailed job descriptions for each role based on the skills and qualifications necessary for success.
• Evaluate internal talent:  Encourage employee retention by identifying suitable internal candidates for open positions and evaluate existing employees to determine if they can be upskilled or reassigned to fulfill upcoming roles.

A diverse range of sourcing channels can effectively connect with a wider pool of potential candidates. Key sourcing channels include:

• Company website:  Maintain an updated careers page on the company website that provides comprehensive information about the organization, job openings and the application process.
• Job boards:  Post openings on popular job boards and career websites such as Indeed, LinkedIn, Glassdoor and Monster to reach active job seekers.
• Recruitment agencies:  Collaborate with reputable recruitment agencies and staffing firms that specialize in the same industry to gain access to their talent pool and sourcing expertise.
• Social media platforms:  Use LinkedIn, Facebook, Twitter, Instagram and TikTok to promote job openings, share company culture and engage with potential candidates.
• Employee referrals:  Encourage current employees to refer potential candidates from their professional networks. Implement an employee referral program to incentivize employees to recommend qualified candidates.
• Networking events:  Attend industry-specific networking events and job fairs to establish connections with potential candidates and build relationships within the industry.
• Professional associations:  Engage with relevant professional associations and groups to reach candidates who are actively involved in the same field.
• Employee alumni networks:  Reconnect with former employees who may be interested in returning or referring other qualified candidates.
• Online forums and communities:  Participate in online communities and industry-specific groups where professionals discuss relevant topics and raise awareness about job opportunities.
• Talent marketplaces:  Explore online talent marketplaces and freelance platforms to connect with freelancers and independent contractors for short-term vacancies or special project roles.
• Direct outreach:  Reach out to potential candidates through emails, messages on professional networking platforms or phone calls to introduce the company and discuss relevant opportunities. 

Implementing a structured and comprehensive screening process can help assess candidates’ skill sets, qualifications and cultural fit. To develop an effective screening process:

• Review resumes and cover letters:  Assess their qualifications, relevant experience and alignment with the job requirements. Look for key achievements, skills and career progression that match the position.
• Conduct phone screenings: Assess candidates’ communication skills, professional demeanor and overall fit for the role.
• Administer skills assessments: Administer tests or assignments to evaluate candidates’ technical skills, problem-solving abilities and job-related competencies.
• Conduct multiple or panel interviews:  Gather diverse perspectives on each candidate’s fit for the role by arranging separate or panel interviews with key stakeholders.
• Include behavioral interviews:  Use behavioral interviews to understand candidates past behavior and assess how they might respond to specific situations in the workplace.
• Assess cultural fit : During the interview process, evaluate candidates’ alignment with the company’s culture and values. Ask questions that assess their work style and preferred work environment.
• Check references:  Reach out to the provided references to verify the accuracy of candidates’ work history, skills and achievements.
• Conduct background checks:  Include employment verification, education verification and criminal record checks. This validation of candidates’ qualifications ensures they meet the necessary requirements.
• Assess soft skills:  Evaluate candidates’ soft skills, such as communication, teamwork, adaptability and leadership potential, during the interview process.

Here are some effective ways to improve the candidate experience:

• Provide clear communication:  Ensure that candidates are informed about the next steps and the expected timeline throughout the hiring process.
• Streamline the application process:  Minimize the number of steps required and optimize the application platform for user-friendliness.
• Create transparent job descriptions:  Include the role’s responsibilities, qualifications and expectations and provide insights into the company culture and values.
• Conduct engaging and respectful interviews:  Ensure that interviews are well-organized, respectful and engaging, with interviewers who are well-prepared, ask relevant questions.
• Personalize candidate engagement:  Tailor candidate interactions to create a personalized and meaningful experience.
• Offer constructive feedback:  Provide specific insights into their strengths and areas for development to help them understand how they can improve and grow professionally.
• Ensure consistent employer branding:  Ensure that the candidate experience aligns with the employer brand. Maintain consistency in messaging, communication style and overall candidate engagement.
• Provide responsive and accessible support:  Make it easy for candidates to contact the hiring team or recruitment professionals for guidance and support.
• Follow up:  Express appreciation and provide closure on their application status, whether they are selected or not. Encourage them to stay connected with the company for future opportunities.
• Gather feedback:  Implement satisfaction surveys to gather feedback on the overall hiring process. Use this feedback to identify areas for improvement in the candidate experience.

By leveraging data-driven insights, organizations can make informed decisions, optimize the recruitment processes and improve the overall quality of hires. Here are several ways in which data and analytics can be used in a talent acquisition strategy:

• Forecast talent demand:  Analyze historical data and job market trends to forecast future talent demands. This helps anticipate hiring needs and proactively source and attract the best candidates in advance.
• Sourcing channel performance analysis:  Track and study the performance of different sourcing channels such as job boards, social media and recruitment agencies.
• Candidate journey assessment:  Identify potential bottlenecks or areas for improvement at each stage of the recruitment process. This helps create a smoother and more efficient experience.
• Application and hiring metrics:  Use metrics such as application completion rates, time-to-hire, cost-per-hire and quality of hire to measure the effectiveness of the recruitment strategy.
• Candidate assessment and selection:  Implement data-driven assessment tools and techniques to objectively evaluate candidates based on skills, competencies and cultural fit.
• Employer brand perception analysis:  Monitor and analyze online reviews, social media mentions and candidate feedback to gauge the perception of the employer brand.
• Diversity and inclusion:  Analyze data on candidate demographics, hiring outcomes and employee retention to identify opportunities for fostering a more inclusive environment.
• Return on investment (ROI) analysis:  Evaluate the ROI of different recruitment initiatives and strategies to assess their effectiveness in attracting and retaining top talent. Analyze the cost and benefits associated with each.
• Predictive analytics for talent management:  Use predictive analytics to identify potential high-performing candidates, forecast employee retention rates and  develop talent management strategies .

Technology can play a pivotal role in enhancing various aspects of a talent acquisition strategy. It can enable organizations to streamline recruitment processes, improve candidate experience and make data-driven hiring decisions. Here are several ways technology can be leveraged as part of a comprehensive talent acquisition strategy:

• Applicant tracking systems (ATS):  Implementing an ATS can help automate and streamline the recruitment process, from job postings to managing candidate applications. ATS platforms enable recruiters to track candidate progress, schedule interviews and communicate with applicants efficiently, creating a more organized and efficient hiring process.
• AI-powered sourcing and screening:  AI can help analyze resumes, assess candidate fit and even conduct initial screenings, allowing recruiters to identify top talent more effectively.
• Video interviews:  Save time and resources and get a more comprehensive understanding of candidates’ communication skills and demeanor by using video interviewing platforms.
• Employee referral software:  Enable employees to refer potential candidates and track the status of their referrals. This technology can streamline the employee referral process.
• Virtual events and career fairs:  Host virtual career fairs and events using online platforms to connect with a broader pool of candidates and showcase the employer brand.
• Data analytics and reporting tools:  Data-driven insights can help recruiters make informed decisions, identify bottlenecks in the recruitment process and optimize hiring strategies.
• Mobile recruitment applications:  Develop mobile-friendly recruitment applications and platforms that allow candidates to conveniently apply for jobs, submit resumes and engage with recruiters.
• Candidate relationship management (CRM) systems:  CRM systems help recruiters maintain a database of potential candidates, nurture relationships over time and provide a personalized and engaging experience for each candidate.

Incorporating diversity and inclusion initiatives into recruitment can yield numerous benefits: improved innovation, enhanced employee morale and a positive employer brand. Here are more reasons why diversity and inclusion are essential to a talent acquisition strategy:

• Enhanced innovation and creativity:  A diverse workforce brings together individuals with unique perspectives, experiences and backgrounds. This diversity fosters innovation, creativity and new ideas.
• Improved employee performance:  Inclusive workplaces that value diversity often experience improved employee morale, engagement and overall job satisfaction.
• Broader talent pool:  A commitment to diversity and inclusion in the talent acquisition process expands the candidate pool, allowing organizations to attract and retain an array of top talent.
• Better understanding of customer needs:  Employees from different backgrounds can enable organizations to develop products and services that better meet the demands of a diverse market.
• Positive employer branding:  Companies that prioritize diversity and inclusion are often viewed as progressive, inclusive and socially responsible, making them more attractive to job seekers.
• Legal and ethical compliance:  Emphasizing diversity and inclusion ensures that organizations comply with antidiscrimination laws and promote fairness and equity in the workplace.
• Adaptability to changing demographics:  Diverse and inclusive work environments are better equipped to navigate cultural differences, adapt to changing demographics and effectively engage with a diverse customer base.

Integrating diversity and inclusion into the talent acquisition strategy requires a comprehensive approach. It involves creating inclusive job descriptions, implementing bias-free recruitment practices, providing diversity training and fostering an inclusive workplace culture. By prioritizing diversity and inclusion, organizations build a more dynamic, innovative and resilient workforce reflective of the diverse society in which they operate.

Building a talent pipeline involves proactively identifying and nurturing relationships with potential candidates even if there are no immediate job openings. Here’s why building a talent pipeline is an important part of a talent acquisition strategy:

• Proactive recruitment:  By cultivating relationships with potential candidates in advance, companies can reduce the time and resources required to fill future job openings when they arise.
• Shortened time-to-hire:  With a prequalified pool of candidates readily available, organizations can quickly engage and evaluate, leading to faster decision-making and onboarding processes.
• Strategic succession planning:  A well-developed talent pipeline enables organizations to identify and groom internal talent for future leadership roles and key positions.
• Reduced recruitment costs:  By continuously engaging with potential candidates over time, organizations can reduce their reliance on external recruiters, job boards and other sourcing channels.
• Enhanced candidate quality:  Nurturing relationships with candidates over time allows organizations to gain a deeper understanding of their skills, experiences and cultural fit.
• Improved employer branding:  Maintaining a talent pipeline demonstrates an organization’s commitment to  talent development  and recruitment, enhancing the employer brand.
• Increased agility and flexibility:  Having access to a pool of qualified candidates enables organizations to adapt swiftly to emerging opportunities and challenges.
• Long-term relationship building:  Regular engagement with these candidates creates a positive candidate experience, even if they are not immediately selected for a role.

Regular evaluation allows organizations to identify areas for improvement, make necessary adjustments and align the talent acquisition strategy with the changing needs of the business. Here are several ways that an organization can assess its talent acquisition strategy:

• Key performance indicators (KPIs):  Establish and monitor specific KPIs related to the talent acquisition process such as time-to-fill, cost-per-hire, quality of hire and candidate satisfaction. Regularly tracking these metrics provides insights into the efficiency and effectiveness of the recruitment process and helps identify areas for improvement.
• Candidate feedback and surveys:  Gather feedback from candidates who have gone through the recruitment process to understand their experience, perception of the brand and overall satisfaction, as well as to identify opportunities for enhancing the candidate experience.
• Data analysis and reporting: Assess the performance of different sourcing channels, the quality of candidates sourced and the success rates of various recruitment initiatives.
• Continuous process improvement:  Solicit feedback from recruiters, hiring managers and other stakeholders involved in the talent acquisition process to identify bottlenecks, streamline workflows and implement best practices.
• Talent market analysis:  Conduct regular analyses of the talent market to understand emerging skill requirements, industry trends, shifts in the labor market and adjust the talent acquisition strategy accordingly.
• Internal stakeholder engagement:  Engage with internal stakeholders, including senior leadership, human resource management and hiring managers, to gather insights into the effectiveness of the talent acquisition strategy.

While attracting top talent is essential, retaining and developing existing employees is equally crucial for the long-term success and sustainability of an organization. Investing in employee development and creating growth opportunities within the organization can increase employee satisfaction and reduce turnover rates. This saves the organization time and resources associated with recruiting and training new hires.

Enhanced employee engagement, employee experience, succession planning and the cultivation of a learning culture provides several benefits, including: clear career paths for employees help avoid leadership gaps, and contribute to the organization’s overall growth and competitiveness. All of this attracts job seekers drawn to companies that prioritize employee growth, learning and career advancement.

Still, the cornerstone of organizational success remains a forward-thinking talent acquisition strategy—driving growth, fostering resilience and positioning companies for sustained excellence in the years to come.

As a leading talent acquisition and skills development consultancy, IBM Consulting® works closely with clients to tailor solutions specific to their recruiting and skilling needs. Whether you are looking to address high turnover, enhance the recruiting technology stack, improve work force productivity, address skills shortages, or create an effective learning experience for a diverse workforce, IBM can provide customized strategies and tools across consulting, technology and managed services.

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Backtesting a Trading Strategy in Python With Datalore and AI Assistant

Over lunch the other day, a friend mentioned his brother, a professional asset manager, swears by a simple mean reversion trading strategy. His strategy consists of buying the 10 biggest losers in the stock market each day and selling them at the close of the following trading session. I asked him if he knew which index or exchange his brother used to pick his losers from, and he told me that he wasn’t certain. As a curious casual investor, I decided to put this strategy to the test using historical data and backtest the trading strategy with Python. 

Disclaimer: This article is for informational and educational purposes only and is not intended to serve as personal financial advice. It was written by an external contributor, and published on their behalf.

What you will learn from this backtesting tutorial

In this article, I’ll walk through the process of backtesting a daily Dow Jones mean reversion strategy using Python in Datalore notebooks . To make it accessible even for those with limited coding experience, I’ll leverage Datalore’s AI Assistant capabilities. I’ll also show how intuitive prompts can be used to create the key components of the backtest, and demonstrate Datalore’s interactive charting and reporting features to effectively analyze and share the backtest results. 

To make things more challenging for myself (and easier for you), I won’t write a single line of code myself. Every line of code in this tutorial will be generated by AI as shown below:

Still, building a comprehensive backtesting system does require significant Python expertise. But for those who don’t yet possess strong Python skills, this is where Datalore’s AI code assistance comes in. With Datalore you can:

• Generate the needed code from natural language prompts, putting backtesting in reach for Python beginners.
• Leverage a cloud-hosted Jupyter environment, eliminating the need to manage your own setup.
• Create interactive, self-documenting reports to share methodology and results with stakeholders.

If you have experience with Python, you can access the example notebook of the implemented backtesting strategy here .

Open Datalore Notebook

Understanding the basics of backtesting

Before diving into the specific strategy we’re exploring in this article, let’s take a moment to understand what backtesting is and why it’s a critical tool for any trader or investor looking to validate their trading strategies using historical data.

Backtesting is a process by which traders simulate a trading strategy on past data to see how it would have performed. This method allows traders to evaluate and refine their strategies before applying them in real market conditions. By backtesting a strategy, one can get insights into its potential profitability, risk, and other performance metrics, without risking actual capital.

The concept is based on the assumption that historical market behavior can provide insights into future market movements. While not foolproof, backtesting offers a way to statistically analyze the likelihood of a strategy’s success based on past performance.

The mean reversion strategy: a case study in backtesting

The specific trading strategy we will backtest in this article is based on the principle of mean reversion. This financial theory suggests that asset prices and returns eventually revert back to their long-term mean or average level. Our strategy involves:

• Identifying the 10 biggest losers : At the close of each trading day, we identify the 10 stocks within the Dow Jones Industrial Average (DJIA) that have declined the most in percentage terms from the previous day.
• Executing trades : We then purchase an equal dollar value of each of these 10 stocks and hold them until the close of the following trading day, at which point we sell all positions. Immediately afterward, we repeat the process by purchasing the 10 biggest losers of that day.
• Performance evaluation : To assess the viability of this strategy, we compare its performance to that of the DJIA itself, providing an “apples-to-apples” comparison to see if our mean reversion strategy would have outperformed the broader stock market over time.

The DJIA, a stock market index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange and the Nasdaq, serves as our testing ground. By applying our strategy to the constituents of the DJIA, we aim to explore the potential of mean reversion in a real-world scenario.

To objectively evaluate this strategy, we’ll use 10 years of daily price data for all current DJIA constituents. Given the complexity of accurately modeling changes in the index’s composition over time, we’ll assume that the DJIA’s constituents have remained unchanged over the past 10 years. In our evaluation, we’ll calculate common performance metrics, including:

• Annualized return
• Annualized volatility
• Sharpe ratio
• Maximum drawdown

In the sections that follow, we’ll dive deeper into the process of implementing this strategy, from retrieving historical price data to calculating performance metrics, all with the help of Python and the Datalore AI assistant.

Retrieving historical Dow Jones stock prices 

Here’s a concise prompt you could provide to the Datalore AI to retrieve the constituents of the DJIA and their historical returns:

The following code was produced by the AI using this prompt to effectively complete the task:

Implementing the mean reversion strategy

Now that we have the historical price data for the DJIA constituents, we can proceed with implementing the mean reversion strategy. The steps involved are as follows:

• Calculate the daily returns for each stock.
• Identify the 10 stocks with the lowest returns (biggest losers) for each trading day.
• Simulate buying an equal amount of each of these 10 stocks at the close of the trading day.
• Simulate selling all 10 positions at the close of the following trading day.
• Repeat this process for the entire 10-year period.

Step 1: Calculate daily returns

To begin implementing the mean reversion strategy, we first need to calculate the daily returns for each stock in our data_filled DataFrame.

We can use the following prompt to generate the code for this step:

The AI generates the following code:

Step 2: Identify biggest losers

Next, we will identify the 10 stocks with the lowest returns (biggest losers) for each trading day.

Step 3: Simulate trades

Now, we will simulate buying an equal amount of each of the 10 biggest losers at the close of each trading day and selling all positions at the close of the following trading day. We’ll assume an initial capital of $100,000.

Step 4: Calculate performance metrics

Finally, we will calculate the strategy’s annualized return, annualized volatility, Sharpe ratio (assuming a risk-free rate of 0), and maximum drawdown.

Step 5: Compare with the Dow Jones index

To determine if our mean reversion strategy outperformed the market, we’ll compare its Sharpe ratio with that of the DJIA. We’ll use the SPDR Dow Jones Industrial Average ETF Trust (DIA) as a proxy for the Dow Jones. The point here is to find out if betting on the losers of the Dow Jones, rather than the Dow Jones itself, is a more profitable strategy in hindsight.

Step 6: Compare our mean reversion strategy’s performance to that of the Dow Jones ETF

To better understand the performance of our mean reversion strategy compared to investing in the Dow Jones, we will visualize the annual returns, standard deviations, and Sharpe ratios of both strategies. Let’s break down these metrics and why they are relevant to this analysis:

• Annualized return: The average annual return of an investment. It allows for easy comparison of returns across different time frames and investments. We compare the annualized returns of our strategy and the Dow Jones ETF to see which generated higher returns on average.
• Annualized volatility: A measure of the dispersion of returns around the average return. Higher volatility indicates greater risk. Comparing the annualized volatility of our strategy and the Dow Jones ETF shows which had more stable returns.
• Sharpe ratio: A risk-adjusted performance measure comparing excess return to volatility. It reveals whether returns are due to smart decisions or excessive risk. A higher Sharpe ratio indicates better risk-adjusted returns. We compare the Sharpe ratios to determine which offered better returns relative to risk.

Examining these metrics side by side provides insights into the risk-return characteristics of our strategy and the Dow Jones ETF, allowing us to assess whether our strategy can outperform the market on a risk-adjusted basis.

Backtesting results:

The results of our analysis show that the mean reversion strategy outperformed the Dow Jones ETF in terms of both annualized returns and risk-adjusted returns. The mean reversion strategy generated higher annual returns while also achieving a higher Sharpe ratio, indicating that it provided better returns relative to the risk taken compared to the Dow Jones ETF.

Step 7: Visualize portfolio growth

To better understand the performance of our mean reversion strategy compared to investing in the Dow Jones, let’s visualize the growth of a hypothetical $100,000 portfolio over time for both strategies.

When we run the code, we get the following output:

The visualization of the portfolio growth over time provides a clear and compelling illustration of the superior performance of our mean reversion strategy compared to investing in the Dow Jones ETF. Starting with an initial investment of $100,000, the mean reversion strategy’s portfolio value grew to over $350,000 by the end of the 10-year period, demonstrating a significant return on investment.

In contrast, the portfolio value of the Dow Jones ETF, represented by the DIA, only reached a level below $300,000 over the same time frame. This stark difference in portfolio growth highlights the potential of the mean reversion strategy to outperform the broader market, as represented by the DJIA.

The divergence in portfolio values between the two strategies is particularly evident in the later years of the analysis, where the mean reversion strategy’s portfolio continues to climb at a faster rate compared to the Dow Jones ETF. This observation underscores the mean reversion strategy’s ability to capitalize on short-term overreactions in the market and generate superior returns over the long run.

However, it is essential to note that past performance does not guarantee future results. While historical analysis suggests that the mean reversion strategy has outperformed the Dow Jones ETF, it is crucial for investors to consider their own risk tolerance, financial objectives, and conduct thorough research before making any investment decisions.

Fine-tuning and optimization

While our mean reversion strategy has demonstrated impressive performance compared to the Dow Jones ETF, there are several areas where the analysis could be further refined and optimized:

• Lookback period: In this analysis, we identified the 10 biggest losers based on a single day’s returns. Experimenting with different lookback periods, such as using the average returns over the past 3, 5, or 10 days, could potentially improve the strategy’s performance by filtering out noise and focusing on more significant trends.
• Portfolio rebalancing: Our current strategy equally distributes capital among the 10 biggest losers. Exploring different portfolio weighting schemes , such as weighting stocks based on the magnitude of their losses or their market capitalization, could potentially enhance the strategy’s returns and risk management.
• Risk management: Implementing risk management techniques, such as setting stop-loss orders or dynamically adjusting position sizes based on market volatility, could help mitigate potential drawdowns and improve the strategy’s risk-adjusted returns.
• Transaction costs: Our analysis assumes no transaction costs. Incorporating realistic transaction costs, such as commissions and slippage, would provide a more accurate picture of the strategy’s net performance and help identify potential areas for optimization.
• Utilizing a Python backtesting library: While we implemented the mean reversion strategy from scratch, utilizing a Python backtesting library could streamline the process and provide additional features. Popular python backtesting libraries include Backtrader , which offers a simple and intuitive interface, and Zipline , which provides a comprehensive set of tools for complex strategies. These libraries differ in terms of performance, ease of use, and community support, so it’s essential to evaluate them based on the specific requirements of the backtesting project.
• Data cleaning with Datalore’s interactive tables: Instead of relying on AI to write the correct error handling code, we could leverage Datalore’s interactive tables for data cleaning tasks, such as dropping duplicates and columns. Datalore’s interactive tables make data cleaning easy and intuitive, allowing users to quickly identify and remove duplicates or unnecessary columns with just a few clicks. This feature streamlines the data preparation process and ensures that the data used for backtesting is clean and reliable.

By exploring these areas for fine-tuning and optimization, investors and analysts can further refine the mean reversion strategy and potentially unlock even greater performance potential. However, it’s essential to approach these optimizations with caution and thoroughly backtest any modifications to ensure they are robust and effective across different market conditions.

In conclusion, our exploration of a simple mean reversion strategy using the Dow Jones Industrial Average constituents has yielded compelling results. By leveraging the power of Python and the AI-assisted capabilities of Datalore notebooks, we were able to efficiently backtest the strategy and compare its performance with the broader market.

The results of our analysis demonstrate that the mean reversion strategy, which involves buying the 10 biggest losers in the Dow Jones Index each day and selling them at the close of the following trading day, outperformed the Dow Jones ETF in terms of both annualized returns and risk-adjusted returns. The visualization of the hypothetical portfolio’s growth over time further reinforces the potential of this strategy to generate superior returns compared to simply investing in the market index. 

However, it is crucial to emphasize that past performance does not guarantee future results, and investors should always consider their individual risk tolerance and financial goals before implementing any investment strategy. Nonetheless, this exercise serves as a powerful demonstration of how Python, coupled with AI-assisted tools like Datalore, can empower investors and analysts to test and refine trading strategies, ultimately leading to more informed and data-driven investment decisions.

If you would like to see an executive summary of the report in Datalore, you can visit this link .

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