Measuring Twice, Choosing Once


Jan Collins, administrative services manager for Lighthouse Financial Group, doesn’t hesitate when asked to name her company’s preferred method of screening candidates for jobs.

“Face-to-face interviews are our rule because we have to see how candidates get along,” Collins says. She said the hiring system at the company is based almost entirely on how job prospects interact with others. “Our hiring managers can tell right away if they have the right attitude and demeanor for the job.”

For Jan and others in the check-cashing and payday loan industries who were asked about their preferred method of screening potential employees, the one-on-one interview — in-person between the interviewer and the candidate — is their way of choice.

But a new school of thought is emerging. For many recruiters, the in-person interview is being supplemented and in some cases, replaced by another screening method: Online or written employment tests.

The one-on-one interview has been the preferred method of interviewing for companies for many years. For countless hiring managers and owners, this format gives the interviewer important clues into the candidate’s character and how the candidate relates to another person. After all, it’s the core of any retail business in which the customer experience is a vital part of everyday life.

But in some companies, the in-person interview is being supplemented and even replaced by online screening or written tests. Recruiters say there are several factors driving this trend.

Misleading Chemistry

While an in-person interview offers immediate insights into an individual’s personality and his or her ability to relate to another person, some recruiters argue that it’s this very chemistry that can be misleading and even deceiving.

Candidates for jobs today can be especially effective and even skilled at self-promotion in person, and subjective feelings and attitudes can exert significant influence on a recruiter in an interview.

In addition, recruiters may not always be trained well enough to ask the questions that can reveal more about a prospect than she or he would like the company to know. An interviewer can often base screening decisions on impulse and basic chemistry with a candidate instead of more rational and logical reasons.

An employment test is straightforward, consistent and, perhaps most important objective. A test or other form of assessment can help employers make decisions based more on logic than on emotion.

“In-person interviews are based on inductive screening, which typically provides a distorted perception of a candidate because it’s a subjective process,” said Don Everett, president and founder of Workforce Interactive, a personnel testing firm that specializes in values-based evaluation.

Two Categories

He breaks down interviews into two basic categories: inductive, in which theoretical behavioral questions are asked, and deductive, which is based on objective comparisons.

“The longtime standard, Myers-Briggs (Type Indicator), looked at inductive screening,” Everett says. “Those theoretical questions brought their expected results as well as a distorted perception.”

Everett explains that deductive screening is based on objective comparisons and results in a far more accurate assessment of an individual’s value system and likely behavior on the job. He pointed to the Bernie Madoff case as an example.

“People believed he was a kind man because how people act in front of others is not inductive of who they are,” he says.

“If he’d been tested with a deductive test, which is based on axiology, he’d have been flushed out long ago.” Axiology is the philosophical study of value and ethics.

Everett notes that untrained interviewers base decisions on how they feel toward a particular candidate fairly quickly — sometimes within ten minutes of an interview.

Proven Results

As a demonstration of his firm’s technique, Everett pointed to a 2009 case study in which 372 teller candidates were given Workforce Interactive’s values profile exercise. The company’s system rated candidates as having strong values (e.g., conscientious, trustworthy, high personal standards that would present a low risk to an employer) or poor values (less than ideal conscientiousness, trustworthiness and personal standards which posed a higher risk to an employer).

Managers in the study were allowed to hire whomever they wanted, and they wound up hiring 100 of the 372 candidates.

Everett’s firm followed up six months later, with the point-of-sale data associated with each teller considered so operating performance could be evaluated along with core values ratings.

The researchers were surprised: Tellers with strong values had a cash short per day metric almost one-tenth that of their colleagues who had exhibited poor values in their pre-employment screening.

This metric shows reconciliation of actual cash on hand in register to expected cash on hand in register based on transaction log. This means that low cash short positions are preferred and zero balance cash short positions are the ideal goal.

When computed by cash shorts and forgeries, the study showed that annualized losses were 150 times greater in the poor values group of employees. In addition, the group that tested for strong values processed zero forgeries. The group with poor values had annualized processed losses due to forgeries of almost $100,000.

Clear Conclusion

Conclusion: Individuals testing for strong values proved to be more conscientious and diligent in their review of presented checks because they closely followed their employer’s policies before releasing funds, and they avoided even the suspicion of dishonesty with mishandling of cash, while the poor values group was responsible for many cash imbalances.

“Anywhere people have access to lots of cash, there is the increased chance for theft if people have low values,” says Everett. “If a person has poor values, they’ll find out how to use (dishonest practices) in every environment.”

Not surprisingly, he is a big believer in axiology. “Axiology is not about what people think but how they think and how someone’s value system is prioritized. The way some candidates think about relationships are affected, while others consider those relationships in relative terms, and still others think of them systematically — such as a conviction never to go on a blind date, no matter what.”

Testing identifies those values in a person, Everett says. “Testing helps differentiate a person’s aptitude for a job: One can be a good nurse but not a good doctor.”

Core Competencies

He also points out that testing can help an employer decide which employee excels in which area of responsibility. “There are different cultures for different companies, and the application of axiology proves how a person prioritizes values. Induction was a popular screening method for a different time — maybe 50 years ago — but today it’s time we turn to deduction for accurate feedback,” Everett says.

David Johns, the owner of Five Star Pawn and Jewelry and a pawn industry consultant, gives high marks to the screening methods his company uses. Like the method described by Everett at Workforce Interactive, his company employs a screening test comprising basic questions.

“We have been very successful with our approach,” Johns says. “Our standard set of questions actually allows for more flexibility for our interviewers by letting them ask other questions beyond the basic set.”

Johns says the core questions for prospective employees represents the first level of the interview process. “Our guide contains core competencies for job candidates and we administer it prior to the first interview.”

Art Sanders, director of human resources for PLS Financial Services, is blunt. “Nothing replaces one-on-one, the face-to-face,” he insists. “There never will be anything to replace it, but there are tools you can add that will help you with your decision. With testing, as with background checks, there are tools that can help, and tests are one of those tools.”

Sanders explains that customer service representatives at PLS are given assessments (“They’re assessments,” Sanders quickly adds. “We don’t call them tests.”) and they administer the same two for each candidate: The first is numbers-related, while the second is based on personal interaction. Neither, he said, is pass-fail.

Sanders acknowledges there’s room for consideration of a candidate’s values, much as Everett describes. “There are vendors with tests that measure value,” Sanders says. “We don’t use one at the moment but we’re looking into it.”

Forecast 2012: Grappling with Economic Uncertainty


A new year has arrived on our door step, and with the turn of the calendar comes fresh hope. Will 2012 bring a more favorable business environment?

Economists advise tempering optimism with prudence. Consumers, financial institutions, and state and city governments are still struggling to right their balance sheets. The resulting financial squeeze is putting a damper on commercial activity — and that means business owners will likely encounter another challenging year.

“We are anticipating weak growth in 2012, with a gross domestic product increase of some 2.7 percent,” says Sophia Koropeckyj, managing director of industry economics at Moody’s Analytics, a research firm based in West Chester, Pa. ( GDP represents economic activity, or the annual total of all goods and services produced in the United States.

At first glance a 2.7 percent rise in GDP might seem pretty good, given that the annual rate for an economy in average growth mode is 2.5 percent. Yet Moody’s number can be misleading because it is calculated off a poorly performing 2011 in which growth only stumbled forward at an estimated 1.6 percent. Says Koropeckyj: “Coming out of a recession, we usually hope for well above average growth as pent-up demand is released and as businesses ramp up production and hiring.”

Koropeckyj  also cautions that her firm’s forecast could be too optimistic: “While we are still expecting a recovery in 2012,  we now believe there is a 50-50 chance of lapsing into a double dip recession during the first half of the year.”

Consumers Hold Back

Moody’s ambiguous forecast reflects the uncertainty prevalent everywhere in the economic environment. Both players on the marketing see-saw are taking breathers: Consumers are waiting for a decline in the unemployment rate and a bottoming out of the housing market before opening their wallets in appreciable numbers. And corporations are awaiting a rebound in consumer activity before bolstering work forces and investing in new property and equipment.

“Unemployment remains high and wage growth is very slow even for people who do have jobs,” points out Koropeckyj. “As a result consumer spending has not been as strong as it could be.”

And will the jobs picture improve? “The expected economic growth in 2012 is at a level which can absorb some unemployed people, but not too many,” says Koropeckyj.

“So by the end of 2012 we are expecting the unemployment rate to be around 8.8 percent, not appreciably lower than the 9.1 percent level of late 2011.”

Any improvement in the jobs picture will depend largely on policy decisions at the federal level, according to Scott Hoyt, Moody’s senior director of consumer economics.

“Under current law we will experience significant fiscal restraint next year, with the expiration of both the payroll tax holiday and extended unemployment benefits. Those are the two factors that most directly impact consumers.”

As for housing, consumers are wary of the continuing rounds of foreclosures and the high number of homes worth less than their mortgages.

“Foreclosures and housing inventory remain quite high, maintaining downward pressure on home prices,” says Koropeckyj. “We do not anticipate house prices hitting bottom until the end of 2012.” The median price for existing home sales is expected to be $166,000 in 2012, about even with the $165,000 expected for 2011, which represented a decline from the $173,000 of 2010.

Housing starts are expected to reach 610,000 in 2011, up marginally from the 580,000 of 2010. The number may hit a little over one million in 2012. To put those numbers in perspective, housing starts were averaging 1.6 million annually before the current recession which began in 2008.

Perhaps the most powerful force affecting the economy is psychological: People believe they are at the end of an era in which they could view their homes as sources of equity and as assets that would continually increase in value.

Together, the moribund state of housing and unemployment weigh heavily on consumers. “The current state of consumer confidence is consistent with a severe recession,” says Hoyt. “Consumers are very negative about the economic outlook.”

Business Sits It Out

Until consumers come out of their funk, corporations will be in no hurry to hire and expand. They are also being restrained by uncertainty about federal initiatives in areas such as the tax code, health care and financial reform, environmental and energy policy, foreign trade, and even the forthcoming presidential election.

“Given that frame of mind, it should be no surprise that no one is investing in new capital goods, or hiring,” says Michael Smeltzer, director of the Manufacturers Association of South Central Pennsylvania, a trade group whose one thousand members employ some 200,000 workers.

The fact is that most large and medium sized businesses would rather accumulate cash than launch initiatives that might not pay off in a wobbly marketplace.

“What Roosevelt said about ‘the only thing to fear is fear itself’ may have something to it,” says Walter Simson, principal of Chatham, N.J., -based Ventor Consulting (

“The fear in the business environment is palpable. People do not want to take dramatic action. They are afraid of a sudden drop in demand for unanticipated reasons, as happened in 2008.”

And there is enough anecdotal evidence about demand being choppy, adds Simson, that business owners are not thinking about what they should do to improve their operations. As a result, Moody’s expects spending on new plant and equipment to increase by 7.06 percent in 2012, down from the 9.61 percent of the previous year.

Hesitation to expand comes at a time, paradoxically, when credit for medium and large sized businesses is more readily available than a year ago. “Business credit is much like consumer credit,” says Hoyt. “Well qualified borrowers now have improved access.”

Smaller businesses, however, face continuing hurdles. “Our small businesses are continuing to find it difficult to find reasonable capital,” says Smeltzer. “The general machine shop — the small guy living week to week — that is where the problem is. And that’s where the jobs are created; that’s where the new ideas and the entrepreneurs start.”

Corporate profits will also experience headwind: Moody’s expects them to grow by some 3.2 percent in 2012, down from the previous year’s 3.8 percent, which was itself a decline from a robust 2010. The de-escalation, says Koropeckyj, is due to a number of factors, including higher operating costs and lower productivity growth.

What productivity increase does occur is being maintained through restrained hiring and additional labor saving machines. “Companies have found all sorts of ways to improve the way they operate with lean staffing,” says Koropeckyj. “These process enhancements will remain in place, and will in fact prevent employment from rebounding to where it was prior to the recession for many businesses, even when output does rebound.”

Labor Mismatch

Deciding to hire more people is one thing; finding the right people is another. And in this area the labor market will present a growing challenge to both consumers and businesses.

“We are beginning to be concerned about what may be a chronic labor shortage,” says Smeltzer. “The workforce is getting older, and our data tell us that as many as 5 percent of our employees could retire every year. That’s 10,000 people [out of 200,000 employees in the organization’s member companies] with a high quality work ethic and legitimate skills.”

And who will replace them? Despite high unemployment figures, business owners are having trouble finding the workers they need.

“Young people are not being trained in these skills, and a lot of the unemployed do not have the skills our businesses are looking for,” says Smeltzer. “They are not inclined to go back to school to learn the skills. They just want jobs, and the ones they qualify for are lower quality than what they were used to.”

“For decades we could just put a sign in yard for a machinist and get 20 qualified people,” says Smeltzer.

“Maybe today you get 100 applicants but none are qualified.” While employers are seeing an increase in apprenticeship programs, they are concerned about the future. “The labor mis-match is not yet a crisis but it is approaching one.”

A Look Back at FiSCA XXIII


FiSCA’s 2011 Conference and Expo has come and gone, and many attendees probably haven’t given it a lot of thought since jetting home. I, on the other hand, find my brain quite busy contemplating the experience, new opportunities for the coming year and FiSCA 2012.

Being an attendee, an Exhibit Hall vendor, and a workshop presenter at FiSCA (not to mention a columnist looking for his next story) can make you feel a bit schizophrenic. Since most conference goers only fall into one of the above-noted groups, I thought it would be helpful to share my Sybil-like perspective on the event.

As a workshop presenter and exhibitor, one is somewhat of an insider at least to a portion of what goes into organizing these yearly mega-events that most attendees don’t see.

When I reflect on how seamlessly the entire event ran, and the quality of each element, from registration through checkout, I felt a real respect for the FiSCA team that planned and implemented a virtually perfect convention experience.

Smooth Road

As a “working” attendee, I truly appreciated having no bumps in the road. The hotel was flawless, the Exhibit Hall management responsive and prepared, and the scheduled events – whether dining, learning or listening – went off without a hitch.

It may sound corny, but every year, when the FiSCA announcement arrives months before the actual event, I get excited. I immediately get into an “imagineering” mental state.

It starts with envisioning the event is only a couple of weeks away, and sketching out all I need to get done as though I’m already under the gun. But if you know me, you know I will never put myself in that position. Conceive, plan, implement and succeed is my process.

This year’s readiness drill was largely the same as any other year, except that I added a workshop proposal based upon one of my recent articles, “The Model Has Changed.” That created a host of new questions to answer.

How do I make the proposal compelling? What panel members will make the workshop more effective? How will we make it a “must attend” workshop? What will the PowerPoint, handouts and materials include?

It’s the Little Things

Ultimately, though, it’s those little, seemingly inconsequential details that are either meticulously considered or absent-mindedly overlooked that make or break your conference experience.

One of the first things I consider in preparing for the event is the location. Upscale or perhaps a bit more casual? For me, appropriate appearances count.

A premium venue like a JW Marriott or Ritz Carlton require your best. They mean bringing more and better clothes, dining in nicer restaurants (and making reservations) and keeping your appearance consistent with the upscale environment.

It doesn’t hurt to pack a dare-to-dream mentality, too. As a mostly symbolic gesture, wherever I go – even if it is a cold climate — I always pack a swimsuit. I feel compelled to do so, if only to satisfy the fantasy that this will be the year I finally have time to lounge poolside.

But as a vendor, if you actually spend more than a few moments at the water’s edge, you are not doing the job you came to do. The same is true for alcohol and all-niters. Drinking too much and staying up too late is a formula for failure later when responsible adults and businesspeople are looking for you at your best.

At some point, you have to ask yourself: Do I want to be seen as a professional or a drinking buddy? Very few can manage to be both.

And speaking of “too casual,” I understand the temptation to pack the AC/DC T-shirt and torn jeans. (Someone once said to me, “One can never be too rich, too thin or have too many furs.” To which I mentally responded, “One can never be too single.”)

But I also learned long ago one can never be too well-dressed for success. Just don’t ask how I get all that stuff into a carry-on.

What’s Hot, and Not

Looking past what you should be doing, its important to consider what the attendees will want to do, and where they’ll spend their time.

Their decision-making process will depend largely on whether you’re in a “resort” or a “destination” city. Do I, for instance, really believe anyone will come to the Exhibit Hall after 7 p.m. on a Saturday night? Not a chance in Vegas. But in Orlando, where lots of folks are spending Saturday night “on campus,” perhaps.

On the Big Question of what to give away at our Exhibit Hall booth, a destination can all but make your decision for you. In Florida, what could have been more appropriate than sunglasses in a parade of shades, from black to white, with hot pink, and yellow in between? That was I question that I asked and answered in seconds.

Hotness quotients don’t just drive your choice in giveaways. Each year I look over our current software suite and new product release schedule. I do so with the understanding that all successful product launches build-in time for development, release, customer education, market acceptance and expanding demand.

Bearing all that in mind, you have to ask: What product will be “hot” by the date of the show? What needs to be introduced to people so that it will be hot by the next show? Once I figure out the “What” as driven by the “When,” I formulate the marketing approach for the show: Booth display graphics, literature and promotional materials.

Then I develop a plan for the show. Our sales team discusses in advance what we’ll be featuring and make sure everyone is up on their product and demo knowledge.

In short, we make sure that the Exhibit Hall experience for attendees is the best it can be.

As the date of the meeting approaches, I don’t slack off. I continue to develop a plan and a theme.

Which customers do I expect to see? Any meetings that I want to schedule? How can I stay on the cutting edge of industry directions and products?

Be Cool, Not Cold

I address this last set of questions by looking at the Exhibit Hall like a kid in a candy shop. This is my chance to see our customers and meet many people who could become customers.

Because I philosophically hate the walls business competitors erect, I make a major effort to break them down. I visit with them in their booths, both during setup and through the days to follow.

It’s about small gestures —  just saying hello, extending a hand in friendship, offering that hand in setup help or in moving something heavy. Often I’ll suggest competitors stop by our booth to pick up some of our cool giveaways, or a spare mouse if they need one.

The message I’m sending is one I need to hear as much (or more) than anyone on the receiving end of it. Namely, that life is too short and the world too small for old-school behavior. I want us to be bigger than that.

With those outreach efforts underway, my next mission is to learn all about what’s new and exciting outside of our product area. This is when the Exhibit Hall morphs from candy store to college.

What’s the latest loan product and how is it presented? What’s new in buying precious metals? Which card offering is attracting attention? Which bankers are courting customers and being romanced right back? What’s new in the world of money transfers? Which company can tell me more about me than I can? How can our software deliver all the latest goodies to our customers?

Workshop Prep

Like everything else in life, planning and preparation is key to putting together a workshop. My workshop had numerous iterations.

First came the development not only of a subject, but also of a theme. I tested both at meetings in New York and New Jersey.

Then came the fleshing out of all the elements to be included in my syllabus as the workshop’s facilitator, followed by PowerPoint brainstorming and development.

Next came the tall order of assembling a panel with the right pedigree. I had to speak with each panelist to determine not only their interest in participating, but their individual energy level, excitement and public presentation skills, too.

Through several rounds of circulating the PowerPoint presentation, I refined the theme and look. I met with the panel members and engaged in discussions to cultivate the theme in each of them so it would flow out of them naturally at the workshop.

I decided on handouts. In my experience, when all your handouts are gone you’ve had a successful meeting.

I then conducted final meetings with the panel onsite and got comfortable with the meeting room. For each session, I arrived early, checked the equipment, presentation PC, microphones and sound quality. Again, it’s about the little things.

At every trade show and meeting I’ve attended, there are vendors who complain about everything. Exhibit Hall traffic; their booth location; their guide listing; power or internet issues; late arrival of their goods and materials; Exhibit Hall hours, and on-and-on.

Most of the time, these are related to the vendor — not the show. The simple fact is you make your own booth traffic.

You make your own relationships with other vendors at the show. You learn and grow on the show floor. You choose to engage others or sit and talk only with your co-workers. You apply early to get the booth location you want. You actually send in your order for power and Internet – and make sure it got there. You ship your goods in advance and confirm their receipt. You fill out the guide listing form and send it in twice, and you maximize everything about the show.

In short, it’s all in your control.

After all was said and done, it took me a week to recover from FiSCA XXIII. No, not from partying. It turns out that it’s much more grueling to put your all into the success of the event than trying to relive your youth.

In the end, that allowed me to score FiSCA’s latest conference a “10.” And I only had to put in an “11” effort to earn it.

My compliments to the FiSCA team. I am already looking forward to next year!

Richard Kelsky is president of TellerMetrix, Inc. a provider of POS transaction, compliance, interface, electronic deposit and marketing software to check cashers, payday lenders and retail banks. He is also a New York and Connecticut Bar member, a Polytechnic Institute of New York University and New York Law School grad, a Certified Anti-Money Laundering Specialist and a frequent lecturer on business, legal, compliance, and technology issues. He can be reached at: