Use of I/O psychology can improve quality of hire, productivity levels, says expert
With employers still struggling to attract, hire and retain the talent they need, turning to data may just be the solution, according to one expert.
Having “talent intelligence that marries hard and soft skills” will help employers, says Caitlin MacGregor, CEO of workforce solutions provider Plum.
One aspect of that is industrial-organizational (I/O) psychology, she says in talking with HRD.
“Research is really clear that past experience in education, while it can predict if somebody is eligible to do the job… it won't tell you who is going to perform the best or stay the longest.”
I/O psychology, MacGregor explains, is the alignment of the innate behaviours that somebody has with the behavioural needs of the job.
“If you need somebody to be thinking outside the box and coming up with new innovative ideas, if you are able to hire people who are naturally driven by innovation, they're going to outperform somebody, and they're going to be fulfilled, so they'll stay longer in that role.”
‘Metrics that aren’t capable of accurately forecasting performance or potential’
With the use of industrial organizational psychology, Plum studies have found a 93% increase in quality of hire, says MacGregor. Also, third-party studies show that if you align the innate behaviours of an individual with the behavioural needs of the role, “you can increase productivity by 322%,” she says.
Employees who feel confident in their job search saw a decline in the second quarter of 2024 as employers grow "increasingly strategic" in hiring, according to a previous report.
However, while employers are looking to create competitive advantages in the business environment, “we see organizations trying to achieve big outcomes with broken workflows, bad data and outdated technology,” says MacGregor.
No business can afford to sit back and hope to get its people strategies right, she says.
“The core of the issue lies in the reliance on metrics that aren’t capable of accurately forecasting performance or potential, which leads to critical missteps: making new hires using misleading indicators, overlooking real contributors for promotions, and creating a fantasy narrative between the culture envisioned by leadership and the reality being lived by the workforce.”
Human resources teams can tap into the powers of artificial intelligence (AI) technology to optimize the recruitment process — especially for high-volume recruiting, according to another expert.
Why hire an industrial-organizational psychologist?
For midsize and large businesses, hiring an I/0 psychologist may be a positive move, according to Max Freedman, business operations insider and senior analyst at Business News Daily.
“If you own a small business and have five to 10 employees, hiring an I/O psychologist might not be worth the investment. However, for midsize and large businesses, these professionals are a valuable asset if you want to increase employee satisfaction and productivity,” he says.
Deciding whether to hire an in-house psychologist or a consultant should depend on your company’s scale and the work that needs to be done, he says.
A majority of people leaders across the world are starting to evaluate employees based on skill, citing its impact on retention and diversity, according to a previous report. However, the report also discovered that the workforce has yet to catch up with evolving skills, particularly on generative AI, looked for by candidates.