Extreme Vetting: Hiring with Behavioral Insights (Episode 27)

May 24, 2018

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Darcy Grabenstein: Hello from SmartLinx! In today's podcast, we'll talk about how to use behavioral insights to optimize your vetting and hiring process. Our guest today is Leon Morales, chief relationship officer for DNA Behavior International. Leon is a seasoned leader and consultant with experience working in finance, technology, operations, accounting, and organizational change. He's passionate about assisting organizations to unlock the power of behavioral insights to accomplish business goals. He works with leaders to further develop their organizational skills and to build collaborative teams that can execute. DNA Behavior International is an international people insights business. Since 2001, it has helped organizations worldwide by providing a single technology platform, which delivers practical and scalable behavioral intelligence solutions. Welcome, Leon.

Leon Morales: Thank you, Darcy. It's a pleasure to be here.

DG: Good to have you. I have to say, your platform sounds a lot similar to SmartLinx. We have a single technology platform for workforce management. So I can't wait to learn more about your approach. My first question to you is, with the current staffing shortage in long-term care, why would an organization want to invest in placing greater scrutiny on new hires? Isn't finding good people hard enough?

LM: That's a great question, Darcy, and I think it's important in the whole hiring process that it is our belief that there are individuals always looking for meaningful work. And that's always good; it does probably take time and effort on the recruiting side to find qualified people.

And what we do here at DNA Behavior is apply this questionnaire process — we call it natural behavior — and in that process it really does help identify where somebody is really suitable for a role. And by that I mean, we sort of measure the world and individuals on how relational someone is or how results-focused someone is.

If you just keep those two things in view, it helps to understand why it's important in long-term healthcare that you probably want someone who's going to be a little more relational when it comes to patient care, because if you've got somebody that we would call a factor of fast-paced, they tend to maybe not be quite as caring and may not apply that level of empathy that's needed in long-term healthcare, which can lead to lawsuits and potential misunderstandings in communication, especially in that whole patient care process. So that's why we help in finding and identifying the right individual with the right behavioral fit for a role.

DG: Got it. So this type and level of vetting may actually enable an organization to stop unwanted behavior and other issues before they start. Could it also curb turnover, which as everyone listening probably knows, is a big problem today in long-term care?

LM: Yes, that's a great question as well. And I think it really does point to if somebody's not in the right role behaviorally — that's how we would identify it — they may actually get bored potentially if they're a little bit more of that fast-paced nature. They might circumvent some of the process just because they're trying to get to the next task.

So it's important to have that right behavioral fit. And if you do that, it does reduce turnover because somebody's really suited for the job, they're happier in the role. And then it also helps develop much more job satisfaction — we call it behaviorally smart organization. It really helps build, when you've got people in the right role, build that culture that the company is trying to develop and actually reduce turnover and longevity of the employees. And potentially even for individuals applying for new roles within the company, you know, you really want to make sure they're suited for that role. So it does in a behaviorally smart organization.

DG: That was a really good point you mentioned there, that certain people might want to skip certain processes. And in healthcare you can't do that because of all the regulatory requirements. So yes, that's something to definitely keep in mind.

LM: That's exactly right, and what we do in this natural behavior process is we identify 64 factors — that's a good way to look at it — and you build that behavioral profile or that fit based on them. So somebody who's really fast paced, high pioneering, they really want to just get to the goal. So circumventing some of those processes may be intentional, it might not be just because they're so fast paced. You need someone with a bit more a patient profile to do that, and what we would call experienced based, they'll follow the same process each time, you want to make sure you've got an element of that as well.

DG: Right. So it sounds like HR pros and hiring managers may be vetting for a broader range of qualifications beyond typical candidate screenings. And how would they do that?

LM: Yes, so we do see that for HR professionals and hiring managers, the interviewing process can be quite rigorous and just get overwhelming because they've got so many candidates who might apply for a role. And we do see more adoption going on with behavioral interviewing; I think that's a key in an organization. Because you could look at the same profile of an individual who might be qualified for a healthcare company in this particular organization, but it might not be the best fit for another one because of that culture that's been identified within the company. So that behavioral interviewing process would pick up things with key managers or key employees that might — you know, one person's filter might be different than another's. But you've got at least the insights to be able to use it and draw from in that hiring when you're actually selecting that candidate.

And the real challenge that I hear from a lot of hiring managers, they just get inundated with lots of resumes, and they can't tell if it's the right behavioral fit. So that's why the use of personality assessments is becoming much more prevalent in the industry. But one thing that we always advocate is, if you're actually doing hiring using personality assessments, use it uniformly, don't pick and choose who you're going to select. Because that does open it up for EEOC [Equal Opportunity Employment Commission] spotlighting, and we want to make sure that you're treating individuals universally around the process, that everybody goes through it and then identify the candidates that are right for that role.

DG: Got it. So, Leon, I guess what this boils down to is behavioral insights, and then something that I've heard you call “behavioral finance.” Does this have to do with finance? Can you tell me more about that?

LM: That's a great question. Yes, a lot of people are a little bit mystified by, OK you're using a personality assessment, how can you get behavioral finance out of this. So what's interesting about this 46-question discovery we call “natural behavior.” It powers both business DNA, which we talk about for the hiring process. But it also is used with financial DNA, so if you or your spouse, both of you go to your financial investor or advisor, and he puts you through what we call financial DNA, it measures your behavioral finance. Same questionnaire, same 46 questions, but there's not one financial question on the assessment.

Behavioral finance is really a new field that really combines behavioral and cognitive psychology and how people would react in financial decision making. So in the last few weeks, we've had a lot of volatility in the stock market, so people will react differently. You might react differently than your spouse might. Mine certainly does with different market conditions because I have that element of risk taking and spontaneity where somebody else might not have that. And that's what really behavioral finance does, it helps the financial advisor be able to understand the best way to work with a client and build a suitable portfolio. So you can use this behavioral finance concept because it does measure these behavioral biases for an individual even in the hiring process.

DG: It's funny because my spouse and I are the opposite. I think I'm more of the risk taker and he's not. So I guess we balance each other out.

LM: It's not uncommon, Darcy, for opposites, 70 percent of couples are actually opposite. It's quite interesting.

DG: They say opposites attract, right?

LM: That's correct.

DG: Does a process like this reveal not only weaknesses and limitations in a candidate but also strengths?

LM: Great question, Darcy. Yes, we actually here at DNA Behavioral are a strengths-based organization and we train our clients and consultants to focus on strengths rather than what we would call struggles, or weaknesses some people would say. And when we were young and learning what we're good at, a lot of times our educators or individuals that we worked with did tell us to work on our weaknesses. And our philosophy is that it's really difficult to make them better. You can mitigate them, those struggles, you can mitigate them. And sometimes a behavioral strength can become a struggle because it's overplayed, the intensity of it is so strong that it can become the struggle.

So our philosophy is really using an individual in placement to focus on those strengths and what they're really good at. And I don't know if you know my background, I'm actually a CPA. My two top behavioral factors, I'm spontaneous and I'm a risk taker. So if you're actually looking to hire an accountant, I might not be the best behavioral fit for the role. And I struggled for a long time in my career because I didn't realize why I wasn't as good as some of my counterparts who were actually great at it. And it really looks at that natural behavior. What I am good at is this human behavior part of what I do and understanding that. It really does help to understand that, and what I've always believed is that an individual going into that second career usually identifies what they're really great at and chooses a career that's more suitable for them and their natural behavior.

DG: Interesting. Yes, I don't want to stereotype accountants, but I was surprised to hear that match-up for you. So that's very interesting.

LM: It's one case study that I often refer to because I had to live that.

DG: Leon, could you give us an example of an industry or even an organization that's doing this extreme vetting, and any results?

LM: I sure will. So probably about 18 months ago, President Trump was talking, and it did get a lot of negative press. So we always try to demystify what extreme vetting is, because there is a time and a place that you really do want to make sure that you have a good rigorous process for identifying the right candidate for the role. And the Department of Homeland Security actually does apply this extreme vetting process, they've been working with IBM to develop that process. It really does identify the right individuals. We see it a lot in IT firms with security, because security controls are so important to make sure that you get the right individual for that right role.

So there's more adoption with the term, extreme vetting. I think sometimes it does get, just by the sheer name “extreme vetting,” it probably does get some negative connotations around it. But it's really identifying the right role for the individual. And I'll use an example of that. We see a lot of entrepreneurs that start, we do a lot of work with entrepreneurs and their teams. So you would see more intense behaviors with an entrepreneur, and it wouldn't fit well in an organization that's been around for a number of years with good process because they would not do well. They would skip that process, they're pioneering, they're fast-paced tendency. So the importance in the context of hiring the right people for the role in that organization is really what we have to do.

DG: So, Leon, what level of accuracy can an organization expect from this whole process?

LM: We use a methodology called forced-choice assessment model, and it's validated by Georgia Tech here in Atlanta; it's a company that came to move the headquarters to Atlanta. So in that process called forced choice, it's a 91 percent accuracy, and so when you complete the 46 questions, it simulates a very, almost like a pressure situation for the individual, and then it moves on to the next question. And the theory is that that actually is programmed by the time we're three years old. So it gets down to that natural and instinctive behavior. And if you're familiar with Daniel Kahneman's work on Thinking, Fast and Slow, it's that level-one behavior that we're all, it's innate in each one of us, and that's really the high reliability, that 91 percent.

DG: Interesting. So how does this go beyond just preventing the occasional bad hire?

LM: I think it's great. I would love to think that behaviorally smart organizations, on the onboarding process it's usually managers, they're sometimes opposite to the individual. And it can really create some very early problems with the candidate onboarding if they've got a little bit more intensity to their profile. So we always advocate that the team knows an individual is coming in, they do things to prepare for that.

And we really believe using behavioral insights — we call it hire to retire — you really should be using them throughout the year through projects when you're doing project selection of teammates, that you're using this information to be able to make better decisions. When somebody has the insight that they're very low on decision making, it's important to know what do they need to help them make decisions — is it another teammate, is it more information — so there's a lot of insight you can gain by actually using it within an organization. So it isn't just a one-time, using it for hiring, it really should be used for promotions, for year-end reviews, there's a number of applications for it. But, again, it should be used with positive intention and not necessarily punitive, because we all come from different behavioral insights.

DG: Now, you would say that the process has even broader implications in terms of how employees communicate and work together? So how would you use it in those instances?

LM: Yes, so it's one of the things that we do in our company is that it's used literally from the time a person's hired to the onboarding process, and this is what we'd advocate for our clients. And then there's also a 360 process, I'm not sure if you're familiar with it, a lot of organizations use 360 where the person gets their health assessment and then the team, and it's all integrated into the business DNA. And it really helps to build that behaviorally smart leader, you know, because if you really have invested in your people, as we did talk earlier about the cost of a hire, you know that you're building an organization that really is behaviorally smart. And what we see — and this is what the research does point to it — you could have productivity gains in a company up to 70 percent if you're really operating using the right insights with an individual and the team. We're not all great at everything, but if you've got the right team to help supplement the team, you can have much higher productivity gains.

DG: So, Leon, could you tell me a little bit about common misconceptions about behavioral insights? I'm sure there's many.

LM: There are several, I mentioned the one about extreme vetting which certainly did get some negative press. But one thing that I would always advocate, Darcy, is that you treat individuals uniformly. I think that's extremely important in the process, that people don't feel singled out, that if a candidate comes in and they're just not sure, there's a tendency for people to say, “Well, let's put them through a personality assessment.” And candidate two might not go through that process. It really doesn't start the hiring process off on a good foot. It's important to treat them universally so you can see the strengths of those individuals. And when you use that, it sort of builds that cohesion for the team to be able to do that.

And I think it loses its power around you using it in a punitive way. So, for instance, I mentioned I'm sort of more spontaneous, so the opposite of that would be I'm not well structured. So for my team, they see me being sort of spontaneous, but there's a certain amount of structure that we have to put into our company to get things done. So it could be there's a misconception that Leon is very low-structured, he doesn't seem to be able to get planning done. I have to actually work at making sure that we do have the right amount of planning; other people are just naturally gifted at doing it. So that's where that misconception can be reduced.

DG: Got it. So I realize that products and services offered by behavioral insights providers such as yourself probably vary a lot. But I think our listeners would want to know, is this an expensive undertaking for organizations?

LM: You know, it really isn't, Darcy. I think it's the mindset for the leader to say we would like to put something in place, and I would say that most organizations that I've worked with are always receptive to the team-building event, because I think it really does show that a team comes together to learn about each other.

I think they've got to take it to the next step and really integrate it in their daily process, as I mentioned. And it's not difficult. You know, we've had clients that come to us, learn about us, and they're up and running within — I'm not kidding — 30 minutes. They sort of move through the buy process to get started, self guided. We're huge on education here because it's what we do. We're all learning how to use this. And I think if an organization is just as interested in the hiring, certainly we're a SAAS company and able to do that. But we really always advocate taking it to the level where you're using it with the team, not just when you do the hiring. But it's just more of the investment of time for the CEO or the leadership to recognize this is going to be important, we'll have lower turnover, we're going to get the right candidates for the roles. And what we find is that when a company uses behavioral insights, they have a much better productivity gain and they rarely ever stop using it.

DG: Wow. Well thank you so much, Leon, for sharing your expertise with us today. And to all our listeners, thank you for tuning in. For more information on this topic, visit DNABehavior.com And if you'd like to learn more about SmartLinx and our fully integrated suite of workforce management solutions, including the applicant tracking system that streamlines the recruiting process from job posting through onboarding, visit us online at SmartLinxSolutions.com.

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