Study finds hiring algorithms outperform managers
NEW YORK 鈥 A new study by the National Bureau of Economic Research found that test-based hiring algorithms consistently choose better employees than company hiring managers, according to an .
The study, which looked at more than 300,000 hires in service-sector jobs, examined tests which asked questions about technical skills, personality, cognitive skills and job fit, as well as the algorithm that used the tests鈥 results to produce a three-tiered scaling system for job candidates.
鈥淲hile hiring algorithms have started to gain popularity as a way to reduce hiring and turnover costs, finding employees who fit better within companies, there鈥檚 still a tendency to trust one鈥檚 gut over a machine,鈥 the article said.
Green-rated candidates (highest rated) stayed at companies about eight percent longer than their yellow-rated (middle tier) candidate counterparts. The article also said that the less a company adhered to algorithm hiring recommendations, the worse results they found in hired candidates.
鈥淚t鈥檚 human nature to think that some of that information you鈥檙e learning in an interview is valuable,鈥 Harvard Business School Assistant Professor of Entrepreneurship Danielle Li said in the article. 鈥淚s it more valuable than the information in the test? In a lot of cases, the answer is no.鈥
Does your company rely on testing algorithms or is it something you have considered? Let us know by commenting below.
For the full, original article from Bloomberg, please .