Tomorrow’s Talent: Emerging Industrial Roles in the Technological Era

 

The rise of the internet was an enabling tool that had to be adopted by large masses of the population to bring forth the unbeatable value it has today – that of real-time information streaming, sharing and usage. The presence of technology is the enabler, but the actual transformation success depends on people’s ability to integrate and implement it as well as the new business concepts it produces on a mass scale within an organisation. At the moment, all efforts are top-down. However, to enable mass transformation, these top management efforts need to spread vertically—to the very bottom of the organisation—as well as horizontally – to every single function and operation.

 

A study on Digital Innovation Leadership on Industrial Enterprise released earlier this year showed that the priority of organisations for the next two to three years will be the development of employees’ digital skills (1). This will not be possible without thorough review and functional re-design of jobs as well as the emergence of some completely new positions within the industrial manufacturers. However, as one swallow does not make a spring, so a handful of digital talents would be too insufficient to scale up innovation if faced with mindset opposition by the majority of the employees. This mass digital upskilling, however, can be developed through consistent and continuous daily learning opportunities and real-time exchanges between functions in similar industries. It can be facilitated by easy-to-access digital platforms, blended learning formats enabling accountability and innovation adoption incentives.

 

Often times we hear statements from the management of various organizations that they need to transform their culture into highly engaged learning organizations. And yet few of them do really understand or have experienced what is needed to take a workforce of thousands and change their mindset and daily working habits. It requires mass employee approach, high management dedication and reasonable, yet affordable investment comparing to the one organizations pump into new technology scouting and adoption.

 

Until today many organisations continue to allocate budgets every year for learning and development activities that typically benefit a handful of individuals at certain levels, without having a specific strategic development focus aligned to business objectives. Most of the time, there was no actual evaluation of the results. If there was any positive change, it remains with a handful of employees, who will eventually leave and set the organisation knowledge transfer capabilities back to square one.

 

How do we shift the digital learning paradigm to serve organisational needs then?

 

A quick browse through the various recruitment channels finds a number of newly emerging job roles, and new digital functions being attached to more traditional roles, that were completely unknown ten years ago. These are transforming the way business is managed, and revamps the overall business model for traditional industries such as the general goods industry, heavy industry, mobility, life science and others.

 

Let’s review a few digital roles that are emerging or being transformed in the industrial context.

 

Technology Marketing Officer (in some cases simply Technology Brand Officer) instead of Chief Marketing Officer

 

Today when we talk about a marketing role in a manufacturer, we inevitably think of industrial brand positioning, not only to the channel network but eventually to the end-customer. In short, we call this B2B2C marketing; activities that require development of a digital marketing strategy directed by a Technology Marketing Officer leading a tech-savvy digital marketing team comprising of a Digital Content Developer, Data Analytics Manager, B2B2C Social Media Specialist, User Interface (UI) Expert and a Brand Manager.

 

The Data Analytics Manager assesses data from a variety of digital platforms, open data sources or even purchased data, and passes the results to the Digital Marketing Strategist to design ways to reach the end-customer and streamline channel network management. Industrial brands more than ever before care who their end-customer is and better positioning themselves as easy-to-access brands using B2B2C digital platforms to facilitate two-way feedback. The traditional role of the brand distributor is quickly transforming into a highly qualified brand-knowledge specialist who can provide excellent onsite support to end-customers in their territory, earning margins from the quality of after-sales services offered rather than from buying vs. selling prices.

 

Supply Chain Ecosystem Technology Officer replacing Chief Supply Chain Officer

 

Supply chain management has always played a key role for manufacturers in overall productivity, cash levels, delivery performance, profitability and return on investment (2). With the advancement of technology, the specific roles within this function have already witnessed major transformation. Let’s take as an example a traditional mid-size company with a typical linear flow of operations starting with order management, procurement (sourcing, purchasing), production planning, warehouse and logistics management to end-customer delivery. As the order cycles frequency changes and the demand for shorter lead times and faster delivery time grows, supply chain management becomes a non-stop activity that requires highly tech-savvy and business-competent talent capable of managing big data, cloud computing, augmented reality and predictive analytics. Therefore, with our mid-size enterprise example, the supply chain will move towards predictive and even prescriptive analytics on future market behaviours.

 

Revenue Strategy Planning Officer instead of Sales VP

 

In the past, the sales vice president of a manufacturer was a key role, managing the full sales process from qualifying sales leads to closing business deals. His/her activities mainly spread across sales development, managing channel networks and ensuring the right KPIs were in place to engage the sales force. With increasing demand for shorter and shorter lead times, customisation and irregular order cycles, manufacturers can no longer rely on sales forecasts based on historical data. They have to integrate a much more forward-thinking approach using real-time analytics on market demand, performance feedback, efficient channel network management and timely data collection of on-the-field product amortisation to foresee after-sales maintenance and spare parts demand. Thus, the traditional Sales VP role has started to require market performance analytics and revenue strategy planning skills, predictively shifting sales efforts from slowing down to higher performing accounts as well as developing completely new revenue streams based on analytical efforts.

 

Digital Talent & Organisational Development Officer instead of Chief Human Resources Officer

 

Today human resources activities in a foreign-invested mid-size manufacturing enterprise in China are limited mainly to simple generalist operations such as payroll management, re-active recruitment of vacancies and relatively-low skilled labor and admin related jobs. With the advancement of technology however, the usual repetitive operations can be inexpensively outsourced or internally replaced by appropriate software. What would be the future focus and added-value of the human resources officer role then, if most traditional operations become AI-processed tasks?

 

Simply put, the effort is shifting towards talent and organizational development to meet the overall business strategy with focus on its people. In the past 15 years, multinational companies have embraced the term ‘HR business partner’, developed by Dave Ulrich and Wayne Brockbank. This upgraded the HR function from merely HR policy and admin operations to strategy-making in support of line leaders and business decision-makers. The role, however, was rarely, if at all, adopted by small or mid-size industrial enterprises. Enabled by technology however, China-based enterprises are becoming more advanced in people management. Thus it is most likely that forward-oriented manufacturers will leapfrog from the well-known HR admin function straight to Talent and Organisational Development officers who use visualised data analytics, employ state-of-the-art people behaviour and talent analytics and develop organisational psychology approaches to engage the workforce. This employee will be well positioned to sit at the business table and advise on people strategy across all functions and levels in the organisation.

 

“As a beginning the existing workforce can get introduced to the transformation of traditional functions and then explore an opportunity to acquire the new skills and competencies towards a higher level of efficiency and advanced execution”

 

It is understandable, however, that to some above described digital roles may sound very futuristic and a bit distant from today’s reality in un industrial setting. There is a valid question of how we can ensure the practicality of developing the skillset and competencies to meet the job transformation demand? What enterprises have to do with the existing workforce that lacks the skills described above? Do they have to plan massive layoffs of outdated labor and replace it with new digital talent? Certainly not, otherwise this whole digitalization and innovation process would become worse than a nightmare and a very costly initiative, if possible at all. Not to mention the limited digital talents available outside. The most practical approach is to look and analyze the situation from within the organisations – in their own shop floors, back offices and among white collar staff. Based on the mid-term business goals they would need to outline first three priorities and implement effective and easily accessible talent upskilling platforms. As a beginning the existing workforce can get introduced to the transformation of traditional functions and then explore an opportunity to acquire the new skills and competencies towards a higher level of efficiency and advanced execution. Selecting on a suitable a well-designed platform is important to enable that first level of mass upskilling. To make it a successful effort further connection of the digital learning platforms to the performance evaluation system will have to provide equal incentives to the workforce along with other on-the-job achievements. Thus enterprises can achieve a mass effect on all levels within their organisations. The consistent top-down as well as bottom-up approach will disperse psychological uncertainty and threads away in favor of excitement from adopting new technologies and advantages they bring in day-to-day operations. Implementation in small, consistent steps on a mass scale over time can add significant value to daily operations in various functions. Once the adoption rate exceeds 10%~15% of the workforce in each function, it will continue spreading quicker leading to the long-anticipated paradigm shift. Without realizing it our organizations’ cultures will be completely transformed through digital embrace on all levels that previously looked so unattainable.

 

Labor Prospects for Expatriates in China

 

There is a passage in Mark Kitto’s China Cuckoo where the author compares himself, a sort of adventurous explorer turned entrepreneur, with a new class of expatriates that became more prominent in China following the trailblazer of business opportunities that sprang when the country joined the World Trade Organization (WTO) in 2001.

 

He describes what he perceived was a transition from an old class of foreigners, those who had come to China attracted by the idea of China itself, towards a much more driven, goal-oriented type, brought in by the multinationals that wanted to tap into the economic prospects that China offered. To this new type of foreigners, it did not matter so much the destination (whether China or elsewhere), but the purpose or intent. He refers to them as professional expatriates.

 

As the author was pondering the idea to leave China (he would leave eventually in 2013), there came this descending feeling upon him that as China was becoming a different country, it would then need also another type of foreigner.

 

Which brings us to the main point of this article: is the era of professional expatriates in China coming to an end? What is the outlook with regards to the labor prospects for expatriates in China?

 

 

Spotting Trends with the Data we Have

 

In our attempt to answer these questions, we first take a look at what data is available on the subject. It is hard to get official statistics on the foreign population in China, and when getting hold of some, it is always advisable to take them with a grain of salt.

 

At China-level, the most recent data comes from the Sixth National Population Census of the People’s Republic of China, which was completed in November 2010. Based on the census, there were nearly 600.000 foreigners in China in 2010, with South Korea (20%), U.S. (12%) and Japan (11.1%) making the top-3 foreign nationalities in China. No previous data exists, for that was the first time foreigners were included in the census.

 

However, China’s economy and labor market conditions today bears little resemblance to the traits that defined it in 2010.

 

The Shanghai Statistical Yearbook (2018 edition) offers a proxy that is more relevant timewise (see Figure 1).

 

Foreign Residents in Shanghai | ChinaHRnews.com

According to this source, the overall foreign population in Shanghai reached its peak in 2015. Especially pronounced is the downward evolution in 2017 of U.S., French and Japanese nationals. Foreigners coming for work present the highest decrease: a 10.4% year-on-year (y-o-y) in 2016; however, those who come to China to study are on the rise, with an increase of 7.9% y-o-y in 2016.

 

Another interesting source, for it is more current and regularly available, is the number of household-goods shipments (see Figure 2). Again, the data does not tell us about the whole foreign population in China but is a good proxy to get a glimpse at the underlying trends that shape them.

 

Figure 2. Relocation Activity in Shanghai | ChinaHRnews.com

 

The total number of sea shipments in Shanghai’s bonded warehouse peaked in 2013, totaling 15.334 shipments according to data from Thomas Coupat, China country manager at AGS Four Winds Shanghai. After 2013 shipments have decreased by an average of 9.8% y-o-y, though with varying degrees of intensity: shipments went down by almost by 12% in 2015 and 2016 and tumbled 16% in 2017. In 2018 the decrease was much more moderate (3.7%), with the catch that the number of imports increased by 1% y-o-y, meaning that for the first time since 2013 there had been an increase in the number of relocations to China (that is via Shanghai only).

 

Ryan Metz, Director at Crown World Mobility, tells ChinaHRnews via phone interview: “The probable consensus you get from talking to people is that in the last five years companies have reduced their expat populations. We also see that: we have a client who had about 80 expatriates five years ago, today that number has gone down to under 40; another company had a population of 70 expats in 2013 and now has shrunk to below 30. These are perhaps extreme cases. I would say on average companies have reduced their expatriate populations by 40% to 50% in the last five years.”

 

Jason Will, Country Manager China at Asian Tigers Mobility, offers a very similar account for an almost identical period. In an email to ChinaHRnews.com he tells us: “based on the number of personal effects shipments we have been handling, we have certainly seen an ongoing contraction of the expat population in China. Over the last 3-4 years, we have seen a continual exodus of expatriates, especially families. Many of the international schools in China that we have spoken to also testify to the reduced number of western expatriate students enrolled at their schools”.

 

Isaac Trallero, General Manager at Asian Express International Movers, adds via phone: “Today we are seeing more outbound than inbound relocations in China. We had a slight decrease in our traditional trading business lanes from countries such as USA, Australia, and Europe during the period 2013 – 2017. However, we have noticed a significant increment on domestic relocations for both corporate and private business in China moving out of the so-called first-tier cities to second and third-tier cities. We have also noticed an increase of intra-regional relocations within the South East Asia region with a higher number of assignees looking at opportunities in China. While the U.S. and Europe remain our main markets, we are expecting even bigger growth from the Asia region, especially from developing economies such as Vietnam and Myanmar as their talent pools become more attractive for higher skilled opportunities in China”.

 

When turning to the vast array of business confidence surveys and similar research conducted by chambers of commerce in China, we find traces that concur with this. For instance, findings from the Labor Market and Salary Report by the German Chamber of Commerce in China (disclosure: a report elaborated in partnership with Direct HR Group since 2016) show that, whereas in 2013 about 33% of German companies were considering replacing some or all of the positions held by foreigners by local staff, in 2018 that proportion went up to 41.5%. (see Figure 3).

 

Figure 3. Positions held by foreigners | ChinaHRnews.com

 

In 2017’s China Business Report by the American Chamber of Commerce in Shanghai, 34% of AmCham members had reduced senior foreign executives headcount (another 8% had increased it). That seemed to be a one-time metric, and no data is available for benchmark from previous editions or in the subsequent 2018’s.

 

 

A Change in Demographics

 

Besides the tendency to see a larger outflux than influx of foreigners to work in China there is also a change in the profile between those who are leaving and those who are coming.

 

According to Mr. Will, “while we have seen an exodus of expatriate families from China, an increasing proportion of the incoming expatriates are younger ‘millennial’ types. They have come to work in IT jobs, as students or entrepreneurs to try to make their fortunes from the market opportunities that exist here. These younger expatriates do not typically bring large personal effects shipments with them; they are content living off smaller housing budgets, and do not need many of the typical expat package benefits that families need.”

 

Mr. Metz also points to a shift both in the demographics of expatriates as well as in the expectations they bring along: “There is a change in the profile of expatriates. The expectations of what the company will do for this new demographic of younger expatriates has changed. Back in the day companies would provide air and sea shipments. The air shipment would get the employees started. After they settled in into their property, a big sea shipment would bring in their furniture and other belongings from their home country. Younger people nowadays don’t want or need that. They are fine to arrive in China with a very small shipment if any.”

 

 

“China’s steering towards its domestic market is the factor that will have the most significant impact in the employment prospects of foreign professionals

 

 

Whether motivated by changes in the expatriates’ demographic and their expectations, or such changes being the result of companies trying to adapt to a more challenging environment in China the consequence is that the new influx of expatriates is lighter on the benefits they are entitled in their compensation packages. Mr. Metz offers further insight: “Many companies are changing their relocation policies. They are not only reducing their household good shipments but also, if the employee does not need to bring that much or event does not want his company to manage the process, companies might give them cash to do it themselves. Many companies go into what we could call “self-managed” relocation policies, or they dramatically reduce the amount of support, being household goods, housing allowances, or school support.”

 

What is behind those numbers? Which are the underlying forces behind the dwindling numbers of foreigners?

 

A difference between the China Mr. Kitto wrote about and today’s is that its current economy relies heavily on its middle class and domestic market. This inward focus as a source of economic growth is a trend that, at least for the foreseeable future, is here to stay. That does not sit well with the employment prospects of foreigners in China, with the exception perhaps of those coming from South East Asia regions that share important social, demographic and cultural commonalities with China, such as Singapore or Malaysia.

 

As China’s GDP continues to reflect the economy’s careening towards its domestic market, other factors shape the centripetal forces that are driving down the number of foreign professionals.

 

One of these forces is the speed of China’s economic growth. The days of double-digit growth are gone. Companies need to be more realistic about the return-on-investment they can expect, and cautious on how they spend their resources. Overall, the Chinese economy grew by 6.6% in 2018 – the weakest pace of growth since 1990. Behind this relatively weaker performance, there was a slowdown on retail sales and a tumble on car sales during the second half of the year. Auto sales started to fall in the summer of 2018, with sales in December down 19% from a year earlier (it should be noted that 2017 was the second and last year of a tax break for car buyers).

 

A second force is the quality of homegrown talent. Marcel Austin-Martin, Sr. Manager – Marketing & Admissions at CEIBS Global Executive MBA (GEMBA) tells ChinaHRnews via phone interview: “there are many Chinese private-owned companies that have reached such state of maturity that they’ve outcompeted their foreign competitors here and now they are looking to extend their reach outside of China as well. Over the last five years, positions that were previously held by expatriates have either been localized because the local talent certainly has improved; or some of those expat positions just have been eliminated as companies have shrunk and scaled back their investment in China.”

 

The world of Global EMBA programs in China is another vantage point from which to observe underlying trends about the labor prospects of foreigners in China. To the question of how registrations from foreign students have evolved, Mr. Austin-Martin says: “during the period 2009 -2019 our English EMBA has kept, in average, a 30 to 40% proportion of foreigners. In 2013 we saw the EMBA market reach its peak in terms of players. Many international business schools opened foreign programs, lured by the attractiveness of the destination. Two things followed: at China level, there was an excessive offering; and, globally, there was a shift in companies’ sponsorships. If two or three years ago you could still find a majority of companies sponsoring in full their employees’ EMBA fees, today only around 50% of students have company sponsorship, and of those, only half are fully sponsored by their companies.”

 

What is more, in CEIBS GEMBA they do not find any direct correlation between China’s economic growth and the number of foreign applicants to its English program. There is, however, a shift that reflects on the general trend we have described so far. As Mr. Austin-Martin ads: “in the past, the majority of our international students were living and working in China for multinational companies with operations here. This proportion has been decreasing, and today we have an increasing number of international students that fly in once every month or every two months to participate in the program. I would say about 25% of our GEMBA international students are based outside China. These are senior executives that might not want to live in China necessarily, but who want to do business with China and therefore have an interest in learning more here.”

 

Paul Shao, Managing Director of EMBA Program at Washington University, Olin Business School & Fu Dan University offers a slightly different account: “Five or six years ago, international students represented about 15% to 20% of the total; today they account for about 10%. The total size of the program has remained stable as Chinese students’ relative weight has increased. Most of our international students work and live here; they are mostly European, Canadian and U.S. nationals that come from the industrial goods, manufacturing and industrial services industries. Although the total number of students sponsored by their employers has declined, those who are being sponsored still see the same level of financial commitment from their companies. Our take on the decrease in the relative weight of international students is that China overall is seeing fewer expats, and especially the most senior type in major cities like Shanghai”.

 

A third vector contributing to the dwarfing numbers of foreign professionals working in China stems from their perception about the living conditions. According to HSBC’s 2018 Expat Explorer Survey, China ranks 27 out of 31 countries in terms of its attractiveness as a destination. There are specific dimensions where China is fairly attractive and thus more competitive than other geographies, especially in the economic arena: disposable income, savings, wage growth, career progression. However, those do not outbalance other aspects where China scores low: quality of life, work-life balance, health & healthcare, childcare, and school quality. As a result, the country’s overall attractiveness is low.

 

Although the survey does not provide results by age groups, nearly 60% of the expatriates in China contributing to it are in the range of 35 – 54 years. This group is more likely to place higher importance to factors such as childcare, school quality, or health & healthcare than younger cohorts, and matches the demographics of foreign professionals that are most likely to leave China.

 

Visas & Working Permits

 

There are several (local) visa initiatives that have been enacted to widen the range of foreigners that can establish in China for work: i.e., Shanghai’s Business Startup Visa (创业签证), or long term visas for foreign experts.

 

On the other hand, the regulatory framework presents a fragmented legal landscape with several jurisdictions and is continuously evolving. In general, it is unclear when and where regulations will be enforced.

 

It is because of the above two conflicting patterns that is not easy to assess what are the net effects of visa regulations on the prospects of employment for foreigners in China.

 

 

Competency-Based Interviews: One Criticism

 

One of the criticisms placed on competency-based interviews (CBI) is that, by focusing on competencies, the stress is on the past rather than in the future. Consequently, CBI interviews are useful – the criticism goes – to identify candidates that are looking for a lateral career move: to apply their already acquired competencies in another organization and at a somewhat similar role. However, top talent is not looking for lateral moves but career progression. And here is where CBI interviews would fall short: their lack of focus on the future opportunity for professional growth. 

 

This is a fair criticism. There is, unfortunately, no single bullet assessment tool. However, we believe this does not diminish CBI interviews’ value nor disqualify them as a methodology.

 

 

“Incentives to grow professionally are not antagonistic of current competencies. There is not a continuum that separates the two as if they were opposites”

 

 

To put the focus in the future, we could use situational interviews – another structured form of interviews – to present hypothetical contexts and measure analytical or problem-solving skills from the interviewees under those situations. Insights gathered in situational interviews could complement CBI. But then again, situational interviews also present their shortcomings: mostly, there is no way to know with certainty how someone will behave in the future regardless of how precisely the individuals describe what they will do.

 

Another available tool, assessment centers, can also come in handy to help recruiters understand whether they are dealing with candidates that can motivate themselves by defining their own goals or are a good fit for their organization’s culture.

 

CBI interviews are designed taking into consideration the necessary competencies to perform successfully in a particular position. When confronting the required competencies with the actual competency levels candidates are bringing to the table, it is unlikely that a single candidate will check all the boxes. It is in such a gap where exists a growth opportunity for the candidates.

 

This might sound like code for accommodating candidates that are not top-notch, but it is not. A candidate that looks promising based in her ability to cope with the challenges thrown at her under the form of hypothetical situations might fall short from the expected performance if she is not able to tap in her own pool of experiences when the time comes. That is why it is essential, in CBI interviews, to get specific examples of how candidates behaved in the past.

 

Incentives to grow professionally are not antagonistic of current competencies. There is not a continuum that separates the two as if they were opposites, with candidates moving from one end to the other by trading more of one extreme for less of the other.

 

 

 

Wait, Competency-Based What?

Competency-based Interviews (CBI). In these types of interviews, questions are designed to find out whether a candidate possesses a particular set of competencies that are considered necessary to perform in a specific role successfully.

 

Taking into consideration the significant costs to any organization that come with wrong recruitment decisions it is critical that those decisions are as accurate, reliable and objective as possible.

 

The cornerstone assumption of CBI is that one of the best predictors of an individual’s future performance is to look at what she did in the past. That is why these interviews are also called behavioral interviews. Still, we prefer to refer to them as competency-based interviews since competency encompasses not only behaviors but also a set of skills and a stock of knowledge. 

 

As the above may have suggested, questions in CBIs are designed in order to get the candidates to elicit past work experiences and decisions they took to achieve a particular outcome under scenarios that were similar to the circumstances and situations they will have to face under the prospective role. Recruiters will use then the candidates’ answers to obtain a better understanding of their capabilities, including as well how they go about articulating thoughts and presenting arguments if that is also relevant for the position. The ultimate goal for the recruiter is to have a more reliable, valid indicator of how the candidate will act in the future.

 

The first challenge that CBI interviews pose is about having a proper definition of competencies. How can we define competency? Let’s start with one of the most straightforward descriptions: according to the Cambridge Dictionary, competency (or competence) is “the ability to do something well”. The Dictionary also offers a definition more appropriate for the purposes of this article: “an important skill that is needed to do a job”. Skills can be broken down into hard (technical) skills, such as the ability to write code or to operate a particular machine, as well as soft skills like communication, leadership, the ability to work on a team setting, interpersonal skills or creativity (combine facts and information – knowledge – in innovative ways). 

 

However, referring to competency solely as a skill seems a somewhat limited definition. The impression is that competency encompasses something larger than skill. We have mentioned knowledge. If knowledge refers to the cognitive ability an individual has to retrieve facts and information acquired through a theoretical or practical understanding of a particular subject, then it sure looks like knowledge also can play a role in defining what competency is.

 

The OECD defines competency as “something more than just knowledge and skills. It involves the ability to meet complex demands, by drawing on and mobilizing psychosocial resources (…) in a particular context”.  Psychosocial resources are motivations, desires, values, attitudes and even skills. An individual drawing and mobilizing those resources is what, in the eye of the beholder, translates in the observation of a behavior or a specific action.

 

Combining then behaviors, knowledge, hard technical skills as well as interpersonal skills in the context of this article leads us to the following definition:

 

Competency is the result of the combination of knowledge, behavior, tangible and interpersonal skills an individual needs to perform well in a specific job role

 

The same way an enterprise is more than the sum of its parts (i.e., 30 engineers will do more working together than each working individually) the combination of knowledge, behaviors, and skills will result in a competency that is higher than just the sum of these components.

 

“The basis for designing an interview should always be the specific job description to ensure interviewers aim to the relevant core competencies given a particular role”

 

A recruiter wants to put together those questions in the interview that will help her understand whether candidates possess a particular combination of behaviors, knowledge, and skills that will support the candidates to perform on the specific role. By focusing on how the candidates handled specific and relevant situations in the past, the interviewer can gather the evidence she needs to conclude whether the candidates have the competencies required. That is, in a nutshell, what competency-based interviews are about.

 

What is Special About CBI?

 

We summarize the advantages of CBI in three main points:

A) It uses the job description (analysis) as the source from where the recruiter can derive most of the questions, keeping questions in the interview relevant to the position;

B) It uses the same questions for all applicants;

C) It uses standardized scoring keys to evaluate the answers.

 

The basis for designing an interview should always be the specific job description to ensure interviewers aim to the relevant core competencies given a particular role. In turn, the job description is an outcome of the collaboration between the recruiters and hiring managers.

 

 

CBI questions should always be related to the job. Let’s suppose that one of the requirements is “leadership.” Interviewers then should make sure that in the interview there is at least one question that aims to assess this competency: for instance, “Can you provide an example in your role as X at company Y when you had to push others and yourself to achieve a certain goal?”.

 

Using the job description to design the interview will have the added benefit of providing interviewers with a consistent structure that later will facilitate comparisons between the performance of different applicants. Inconsistencies in the questioning (lack of structure in the interviews performed across a set of candidates) are, on the one hand, not fair to applicants and it will also make it very difficult to compare who did best in equal terms.

 

Finally, because CBI questions focus on facts from real situations and CBI questioning requires that interviewers design a set of scoring keys, this will result in more objective evaluation – away from biases and judgments. Developing a rating score requires a great deal of time and work in the preparations leading up to the interviews. It often feels troublesome for recruiters and hiring managers. However, the benefits of such investment will become apparent further down the recruitment process when, thanks to a clear set of rules, assessments will be based on objective, non-biased observations from the interview process. It should be clear though that CBI questions, by themselves alone, cannot completely prevent bias. Interviewers will be required to make a conscious effort to avoid falling for heuristics or stereotyping

 

The Biases That Fooled Us

When interviewing candidates we want to adhere to standard and consistent evaluations across the board. However, often we incur in biases – consciously or unconsciously – that result in potentially poor hiring decisions as well as in unequal opportunities for candidates.

 

Biases undermine the consistency and fairness intended with structured interviews. Orchestras in the U.S. were mostly composed of men in the 70s, with the top five having fewer than 5% of female musicians. To address such a gender imbalance, orchestra conductors started holding blinded auditions where musicians would play hidden behind a sheet. Consequently, gender, race, personal connections, or reputation stopped accounting for anything in auditions. The only thing that mattered was the music that came from behind the sheet. The proportion of women playing in the larger orchestras has grown by a factor of five since blinded auditions became the norm – a great leap, though they still make up for only one-quarter of the musicians.

 

On the other hand, rating errors include, for instance, giving all candidates high ratings or all low ratings.

 

Most Common Biases and Rating Mistakes in a Recruitment Interview

 

Attribution bias

Categorizing people helps individuals navigating our social world more efficiently. To prevent from brain overload, we make sense of a large number of stimuli by sorting those into buckets, into categories. This categorizing frees up mental resources for other tasks. For example, our stereotype for the elderly is what causes us to speak loudly in their company, even if a particular individual does not suffer from deafness.

 

In the context of an interview, the risks for an interviewer is to end up paying more attention to actions that are more consistent with the stereotype, than to actions that contradict it, resulting in less accurate evaluations (increases the risk of getting false positives).

 

“Similar to me” / Confirmation bias

We have a natural tendency to like others who are similar to us in various ways, whether it is because they studied at the same institutions we did, support the same basketball team, or have similar interests.

 

In the context of an interview, the risk is to bestow higher ratings than they actually deserve to candidates who appear to be similar to the interviewer.

 

Halo effect

The tendency to like (dislike) everything about a person, based only in very limited information. Taking just a very limited piece of information we build unfounded associations, including things that we have not observed. Because someone shows she is such a great (poor) speaker, we assume she might be also a great (poor) creative person or a great (poor) problem solver.

 

In the context of an interview, the halo effect increases the weight of first impressions, causing the interviewer to build associations that are not funded in observations.  It might induce higher ratings on, let’s say, Problem Solving just because the candidate has a high score in verbal communication (Interpersonal Skills), irrespective of the candidate’s performance on Problem Solving. It also increases the likelihood to dismiss information that might contradict the first impression.

 

“Whether it is an attribution (“Similar to me”) or halo effect bias, the best course of action is to avoid jumping to conclusions too fast”

 

Rating mistakes: Strictness, Leniency, and Central Tendency

Rather than mistakes per se, the following tendencies devoid evaluations of any discriminatory value since they all represent a propensity to give all interviewees similar ratings.

 

Strictness refers to the tendency to give low ratings to all candidates. On the opposite extreme, we have leniency: a tendency to give high ratings to all candidates.

 

As opposed to leniency and strictness – which are about extreme ratings – interviewers might present a tendency to rate all competencies at the middle of the scoring scale. This rating mistake is referred to as central tendency.

 

How to Minimize Them?

 

How to minimize biases? Whether it is an attribution (“Similar to me”) or halo effect bias, the best course of action is to avoid jumping to conclusions too fast. When evaluating, interviewers should concentrate on the responses given by the candidate rather than on the outward characteristics or personality of the candidate; hold back from considering any non-performance related factors. A re-examination of the scores to the candidate based on the hand notes interviewers took during the interview might also help to reduce biases.

 

Another way to tackle biases is to conduct interviews using a panel of interviewers, rather than being led by just one interviewer. This is a way to even out individual judgments. Yes, there might be individual errors, but since all panelists share a common basis when all judgments are averaged, the average usually is accurate. However, a panel might not work if all panelists share the same bias and/or if panelists evaluations influence one another – that is if assessments from different panelists are correlated.

 

How to minimize rating errors? By understanding the competencies assessed and comparing the behaviors observed in the interview with the behaviors used to establish the proficiency-level ratings for each competency.

 

When there are doubts on whether to award a high (low) score, interviewers need to understand such score does not indicate perfect (complete lack of) performance. It means, in the high score cases, that the interviewee demonstrated more of the competency than it is generally common; equally, in low score cases, it means she did not show much of the competency in her responses.