In today’s fiercely competitive world, most business leaders can agree that hiring new employees has become increasingly challenging due to the repercussions of the COVID-19 pandemic, which left business owners facing a global talent shortage. How significant is the disparity? As per a Korn Ferry  study, by 2030, there will be an astounding shortage of 85 million talent, potentially resulting in a loss of $8.5 trillion in unrealized profit. Data indicates that the primary reason for this shortage includes competition from other employers, lack of experience, and lack of technical skills. In such a competitive market, how can business leaders retain top talent?

One way is through utilizing behavioral science techniques. Since the emergence of the early 1900s, behavioral scientists have studied human and animal behaviors by exploring  what drives certain actions. Today, behavioral science can be integrated into human resources (HR) practices to improve choices made by consumers, HR professionals and employees.

What is behavioral science?

The definition of behavioral science has been a topic of long-standing debate. For this blog, we will adopt the American Psychological Association’s definition: it studies behavior through observation and experimentation, systematically analyzing actions and reactions of both humans and nonhumans. Behavioral science examines the impact of behavior, including motivation, social influences, and habits.

What companies are using behavioral science?

You might be wondering which companies use behavioral science. Large corporations such as Google utilize "People Operation”" to inform decision-making, support HR leadership and team development, while Capital One incorporates behavioral science into its security review process. Data from McKinsey found the use of behavioural science had an overall improvement in employee behavior and well-being, including a 33% increase in loyalty to the employer and a 35% increase in training and development, such as employees adhering to safety procedures.

Job seekers are ghosting HR recruiters here’s why

Traditional interview methods often hinge on antiquated questions like “How do you handle stress?” to assess prospective hires. However, standardized interview questions fail to showcase a candidate's skills. Hiring the wrong candidate is costing companies over $17,000, according to  Career Builder.  More job seekers are ghosting HR recruiters. Statistics collected from Criteria found the top reasons candidates abandon job applications:

• The average hiring time in the U.S. stands at 24 days, while job seekers remain available for only 10 days on average.
• Approximately 60% of applications are excessively lengthy.
• Moreover, 55% of job candidates abandon their job application process after encountering a negative review.

How HR professionals can apply behavioral sciences to improve recruitment

A better approach to recruiting new talent is by considering pre-employment behavioral assessments. Employers can evaluate prospective hires and gather useful insights by immersing candidates in unconventional scenarios. Hiring teams use behavioral assessments during the recruitment process to test a candidate’s suitability for a role. Behavioral assessments can evaluate  the following:

• Motivation
• Interpersonal skills
• Technological proficiency
• Behavioral habits to predict their likelihood of succeeding on the job
• Critical thinking abilities
• Personality traits

For example, to evaluate a candidate's preparedness, one might provide them with a set of questions in advance. Similarly, to gauge their technical aptitude, candidates could be tasked with solving a series of problems. Moreover, to assess cultural fit, organizations might arrange shadow interviews for candidates.

Five Factor Model

Companies can leverage behavioral assessment like the Five Factor Model to forecast employee performance. This assessment evaluates neuroticism, extraversion, openness, agreeableness, and conscientiousness. Recognized as a valid psychometric tool, it measures job performance, satisfaction, leadership qualities, and career success. Although there are no strict right or wrong responses, the assessment provides valuable insights.Acquiring proficiency in using behavioral assessments enables companies to identify suitable candidates and make well-informed hiring choices. Studies on the Five Factor Model have revealed that extraversion is positively correlated with promotions and career satisfaction. Conversely, neuroticism is negatively associated with career satisfaction (Seibert & Kraimer, 2001). By analyzing personality dimensions, HR recruiters gain valuable insights into traits that enable them to assess if a role is a suitable match. For instance, a position with minimal interaction may not necessitate a high extraversion score.

HR professionals can apply behavioral sciences for training & development

Social, environmental, and emotional factors help determine how humans make decisions. How can we ensure employees make the best decisions during training and development? One way is by looking at the Nudging theory,Richard H Thaler and Cass R Sunstein. For the purpose of this blog we will focus on the nudging theory while there are numerous theories. Nudging theory is a behavioral concept that steers people to make alternative behavioral options. It involves several strategies to prompt individuals to evaluate other decisions. Nudge theory strategies can include choice options, prompts, and social norms (Kwan YH, Cheng TY, Yoon S, et al., 2020; Cooley, P., et al., 2022).

A comprehensive study by Cooley et al. (2022) examined the effectiveness of nudging in reducing prolonged sitting behaviors among employees to mitigate associated health risks. Results revealed a notable positive shift among participants, evidenced by increased breaks taken in response to nudge strategies. Nevertheless, a subset of participants reported adverse emotional responses to the nudges, attributed to discomfort stemming from a perceived alteration in their work identity, such as "feeling unable to take breaks when they had work to do." While change is challenging, nudges serve as a helpful strategy for individuals to deliberate and make decisions more thoughtfully rather than irrationally. The findings support the notion that nudging can indeed be effectively employed in the workplace to yield positive effects.

Nudging can be used for education & enhancing abilities

Nudging employees can look like anything from sending personal emails to a company-wide email to remind employees to complete surveys or training deadlines. When employees don’t feel worthy enough to reach a goal, managers can use nudges to change perception. For example, an employer can provide tools and support to make achieving the goal easier and complete their work.

Nudging can be used to encourage communication and knowledge sharing

Sometimes employees don’t communicate their opinions at meetings. One way to encourage sharing knowledge is by creating spaces such as common areas, kitchen spaces, work community groups/chats, or relaxation spaces is a type of nudging strategy. This can encourage employees to communicate their ideas or opinions, thereby fostering creativity and innovation.

Nudging be used through role modelling behaviors

Senior employees can role model desired behaviors, which is a nudging strategy that can help support employees. For example, employees typically emulate what their managers or leaders do. So, if employers want to remind employees to stop working late, they may set up posters or email reminders. Additionally, employers can set up posters to remind employees of a healthy work-life balance.

Nudging used for drafting work schedules

It is no secret humans have an attention span from 2 seconds to 20 minutes. Knowing this information, HR can develop work schedules or daily reminders to maximize productivity. Daily reminders can be set to encourage short meetings, breaks, walks, snacks, or hydration to improve employee productivity and performance.

Nudging used for career development

Humans prefer taking control of their own choices. Human resources can create career development programs for employees providing different pathways. Such pathways can include becoming a mentee, attending a training program in person, or courses online.

Motivate employees through the Goal Setting Theory

How can we ensure employees are motivated? One approach is to consider Locke's  goal setting theory in 1967. According to this theory, setting appropriate goals helps people feel motivated and is more effective in achieving goals than setting unclear ones. Locke demonstrated that when employees set goals, engage in challenging tasks, and receive constructive feedback, they are more likely to work harder. Research has shown that when employees participate in goal setting, it can promote proactive behavior and provide increased autonomy, leading to attainable goals (Pervaiz et al., 2021).This can enhance employee engagement, productivity, and performance.

Conclusion

To remain competitive, organizations must adopt innovative strategies, such as incorporating behavioral science. Employing behavioral assessments based on job descriptions to select the most suitable candidates can effectively decrease turnover rates and attract top talent. Embracing a human-centred approach that emphasizes personal and professional development can significantly boost employee engagement and performance levels. Employers can use nudging and goal setting theories to help train employees, and achieve new success.  To learn about other behavioral science techniques watch out for our next blog post.

References

Cooley, P. D., Mainsbridge, C. P., Cruickshank, V., Guan, H., Ye, A., & Pedersen, S. J. (2022). Peer champions responses to nudge-based strategies designed to reduce prolonged sitting behaviour: Lessons learnt and implications from lived experiences of non-compliant participants. AIMS public health, 9(3), 574–588. https://doi.org/10.3934/publichealth.2022040

Güntner, A., Lucks, K., Sperling-Magro, J. (2019). Lessons from the front line of corporate nudging.https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/lessons-from-the-front-line-of-corporate-nudging

Pervaiz, S., Li, G., & He, Q. (2021). The mechanism of goal-setting participation's impact on employees' proactive behavior, moderated mediation role of power distance. PloS one, 16(12), e0260625. https://doi.org/10.1371/journal.pone.0260625

Scott E. Seibert, Maria L. Kraimer, (2001). The Five-Factor Model of Personality and Career Success. Journal of Vocational Behavior,Volume 58, Issue 1,pages 1-21.

https://www.sciencedirect.com/science/article/abs/pii/S0001879100917573