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The Devil’s in the Details: Being Statistically “Significant”

Posted by The Bean Team

27-Jan-2015 13:00:00


Big data has flooded HR and recruiting articles in regards to candidate assessment. What does this vast amount of information mean on a grander scale? Big numbers can mean big trouble for organizations. While it's beneficial in aggregating valuable information about a candidate's fit to a position, the internal numbers aren't always as advantageous for the company. Large numbers of viable applicants can result in a statistically significant nightmare for organizations. Learn what your data can tell you and how to fix it.

When an organization sees a large number of applicants, there's a higher chance they can be found discriminatory. The EEOC and OFCCP don't even have to find the company intentionally guilty of discrimination. They merely have to show - via statistical analysis- that the organization's hiring practices impacted the applicant demographic negatively.

The data compiled from the ATS about candidates such as age, race, or gender determines the companies standard deviation. How far these demographics are from the average dictates if the organization’s hiring practice is statistically significant. For example, say the HR department sees 100 female applicants and 100 male applicants. One female is hired and two males are hired, that's only a 0.626 standard deviation. Considering the maximum standard deviation is 1.96 before the hiring practices are considered statistically significant, that's not a bad number. When the ratio of male and female applicants-to-hires multiplies ten fold, the standard deviation doubles becoming dangerously close to the point of statistical significance.

So what do we glean from this information? The more applicants that rotate through the hiring process, the bigger the potential problem.

Internet Applicant Rule

The technology age has brought the recruiting and hiring processes to a larger group of people and that means the potential for more applicants. There is a silver lining, however. Not every individual who applies via a career site or job board are considered to be relevant to determining an organization's standard deviation. There are certain characteristics an applicant must hit before the OFCCP adds them to the pool of candidates applicable to the numbers. According to the U.S. Department of Labor, an Internet Applicant must satisfy all four of these criteria:

  1. The individual submitted an expression of interest in employment through the Internet or related electronic data technologies

  2. The contractor considered the individual for employment in a particular position

  3. The individual's expression of interest indicated that the individual possesses the basic qualifications for the position

  4. The individual, at no point in the contractor's selection process prior to receiving an offer of employment from the contractor, removed himself or herself from further consideration or otherwise indicated that he / she was no longer interested in the position.

In short, the applicant must stay in the hiring process long enough to show interest and either receive an offer or a rejection. Only when the individual makes it through the entire hiring process and the organization offers or denies them employment do they count towards relevant data information.


Tools you need to combat the numbers

Growth is an inevitable part of business development. With that entrepreneurial maturation, it’s a necessity that organizations improve their tools they use to handle the rush of candidates. In fact, 60% of businesses are increasing their investments into talent analytics. When it comes to candidate sourcing, recruiters need software and tools to deal with the big data because talent acquisition professionals don’t want to be number crunchers and data scientists on top of their already hectic jobs. Companies have to adopt tools in order to compensate for the influx of data in their HCM planning. Broadbean has the tools for accurate reporting and analysis to handle the steadily increasing inundation of sourcing and recruitment data.

This is a lot of knowledge to take in, but it's useful information in staying compliant with EEOC and OFCCP regulations. Remaining in the good graces of these agencies is not easy when done manually. This is why the use of recruitment and sourcing systems is so important, especially for larger organizations.

As the number of applicants grow with each new job opening throughout the year, the amount of data internally only grows. Your organization will need an optimized tool that fits its needs.

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Topics: Talent Analytics