The Case for Character Assessment

Companies like Citgo Petroleum and Starwood Hotels have already been forging ahead with interview approaches that are asking open-ended questions designed to learn something about a candidate’s character as part of the hiring decision. They have sensed the need for the development of new tools that can help them get that done. Then and now, they are turning to professionals in our business looking for the solutions.

At the root of the issue is a simple and important question: Does character have anything to do with success and if so is it quantifiable and something that can be added to the tools already in place to make better hiring and promotion decisions? This question has caused search firms and related service providers to rethink the filters used in the recruitment and interviewing process. In fact, we are on the frontier now of experiencing potentially major shifts in what is being measured in the interview process.

So why has it taken so long to introduce character-oriented assessment tools into the mainstream of the hiring process? There are probably three main reasons:

	Unlike observable behaviors, character is often viewed as an intangible that cannot be easily correlated with desired business outcomes. That makes using such tools seem hard to defend in our litigious society.
	Until recent years, there has not been enough business failure associated with proven character collapse to get our attention. This is changing, as companies of all sizes have become public examples of what can happen when the necessary character safeguards are not in place.
	Until the popularization of more empirical studies associated with emotional quotient (Daniel Goleman and many others), it has not been widely understood how character can be measured and what influence it has on business.

The Cost of Poor Character Reflected in Turnover

Employee turnover related to terminations caused by character-related issues represents billions of dollars to American business. That alone should suffice to motivate companies to address the problem. While there are differences of opinion in how the actual cost of turnover should be calculated on an individual level, the average of all reasonable estimates would be around 100% of a person’s annual compensation when all six key factors are included:

	Direct costs due to a vacancy
	Recruitment costs
	Training costs
	Lost productivity costs
	New hire costs
	Lost business costs

The Saratoga Institute agrees with this estimate as does Dattner Consulting President Ben Dattner, who summarizes the need as follows, “Tools that screen applicants for factors related to turnover are simply making an effort to lower the risk factors associated with ‘wrong hires’ and ‘undesirable turnover.’ When we can tie individual test results to consistent projections of success related to desired business outcomes, we are essentially just trying to ensure that we are maximizing the hiring process.”

The Cost of Retaining Poor Character

Another side of this same issue is related not to the losses associated with turnover but the losses associated with retaining the wrong people. Once a person of poor character is gone there is not much else they can do to hurt the organization. But a person of poor character who remains employed represents an internal irritant that can wreak financial havoc of far greater proportion than the cost attributed to their departure.

In our experience, even a company with relatively low turnover can have this problem in significant measure. Let’s look at the following chart as an example.

Our contention is that in any organization about 55% of the workforce is competent and motivated while another 30% is marginal and the remaining 15% is either too new to have a measurable impact on results or too unproductive and on the way out. If you examine the roots of why 45% of the employee population is new, marginal or unproductive, you will find a high correlation between character and outcomes because a person’s character, as much or more than their training, is at the core of their performance.

Summary

The challenge for companies, then, is to not only evaluate an individual’s external strengths and accomplishments but to plumb his internal moral compass, as Lee Csorba of Heidrick and Struggles would say. Recent trends in American business suggest then that a growing number of organizations are ready for the next wave of assessment tools. Consider these trends:

Over 30% of Fortune 500 companies are now using executive and personal coaches to help their teams deal with character development issues that have not been effectively addressed through traditional, internal training programs.

Large consortiums of behavioral science firms are collaborating to put character assessment frameworks together as a scientific basis for supplementing the hiring process.

Progressive Human Resources executives are making advances in the expansion of their existing behavioral assessment tools to embrace measurements of character.

We can expect an acceleration of these trends as more hard data are added to an already abundant supply of proof that character not only matters but that selected attributes of character are strong predictors of success in the workplace.

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