Return on Investment (ROI)
Over 40 years of scientific studies have shown that investment in credible behavioral science tools can bring impressive returns across a variety of services we offer. Not only are there enormous positive Returns on Investment (ROI) when Great People Science is utilized (section I), but scroll down farther to also see how GPS also allows you to avoid hiring mistakes, losses & devastating liabilities.
Exemplary ROI’s highlighting revenue impact and far reaching value of GPS
- Profits and cash flow are up to 20% higher in firms that use strategic/more formalized selection processes (Huselid, Jackson, & Schuler, 1997; Delaray & Dotry, 1996).
- The potential financial benefits of improved selection and placement programs can be gigantic (Hunter & Schmidt, 1982). For example, decreasing the turnover rate of coworkers in an organization by use of a advanced screening methods was estimated to be worth about a quarter of $1 million over 25 month. (Lee & Booth, 1974)
- The use of a test of demonstrated validity for selecting more competent computer programmers is predicted to be worth hundreds of millions of dollars annually to the US economy (Schmidt, Hunter, McKenzie, and mold Jarreau, 1979)
- Executive coaching can produce an ROI of 6 times the cost of coaching (Fisher, 2001; Olivero et al., 1997; Peterson, 1993)
- There is a positive correlation between 360 degree feedback and productivity of organizational culture and a negative correlation between derailment factors and organizational culture (Fisher, 1997).
- Companies that focus on leadership development increase their leadership capacity and are 1.5 times more likely to be on Fortune magazine’s Most Admired Companies List (Csoke, 1997)
- 80% of the variance in senor leader productivity increases is due to interpersonal and emotional competence factors (Goleman, 1980).
- Organizations whose leaders create and sustain a “high performance” culture average a 21% return on shareholder equity whereas a “low performance” culture averages only a 6% return on equity (Denison, 2002)
- 75% of best in class organizations can directly attribute changes in profits to their assessment strategies (Aberdeen Group, Assessments 2012: Predicting productivity of Performance”)
- Organizations that effectively manage change have higher revenues and net income (Pease, 2002)
Preventable Mistakes, Losses & Liabilities
Don’t over trust superficial information. 40-89% of applicants were found to have falsified their resumes (American DataBank research statistics 2008 – 2010)
Solution: Get deep intelligence before you make deep investments.
Avoid hiring people with the wrong attitude. People can often conceal what their real attitude toward the work you want them to do is. Data collected in 2011 suggests that “bad hires” in 62%
of cases had negative attitudes, and in 63% of the cases failed to work well with other employees (source www.thehiringsite.careerbuilder.com ).
Solution: Precisely assess key workplace factors such as attitude and interpersonal skills before you make a deep investment.
Avoid major financial losses that come with bad hires. One in four companies estimate that a bad hire costs more than $50,000 (source solution www.thehiringsite.careerbuilder.com ).
Solution: Use sophisticated but economical tools that help you screen out bad hires and identify truly exceptional candidates.