Strategic approach to hiring assessments

Aligning your company's strategy with the hiring assessment process
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Created by Mustafa Ekim / April, 2023

What is strategy?

"Strategy is about making choices, trade-offs; it's about deliberately choosing to be different." - Michael Porter

Strategy is the process of identifying and implementing a plan of action to achieve a specific goal or objective. It involves analyzing the internal and external environment to identify opportunities and threats, and then making deliberate choices and actions to create a unique and valuable position in the market. A good strategy involves making trade-offs and focusing on a specific target customer or segment, and creating a unique value proposition that differentiates the company from its competitors.

"Good strategy is not just about saying yes, it's about saying no." - Steve Jobs

Through the development of a strategy, a company determines which areas it will excel in, such as quality, pricing, design, branding, reliability, or innovation.

Source: Slide 15, Human Resource Management, Prof. Dr. Armin Trost<br>
Source: Slide 15, Human Resource Management, Prof. Dr. Armin Trost

How does a company's strategy affect its talent acquisition strategy?

After a company has established its strategy, it can distinguish between functions within the company that are of high strategic relevance and those that are of low strategic relevance.

It is important to note that the company's strategy involves making trade-offs between different functions.

If a function is highly strategic, excelling in that function can significantly impact the competitive advantage and future success of a company.

A function of high strategic relevance is also called a key function

By determining the level of strategic relevance of each function in a company, it becomes possible to identify the areas where the best and most skilled employees are needed, as well as the areas where average or less skilled employees can be utilized. This helps to align the company's HR strategy with its overall strategy, as it enables the company to recruit, train, and develop employees who possess the required skills and competencies for each function.

High performance in functions with high strategic relevance can have a significant, and at times, even dramatic impact on the success of a business.
FunctionStrategic relevance Talent required
Research and Development HighBest people on the market
Sales and Marketing MediumSkilled people on the market
Manufacturing and Production HighBest people on the market
Information Technology MediumSkilled people on the market
Human Resources MediumSkilled people on the market
Finance and Accounting LowAverage people on the market
Customer Service MediumSkilled people on the market

In the table above, which is an example for an imaginary company, research and development and manufacturing and production are identified as highly strategic functions and require the best talent available on the market. Sales and marketing, information technology, human resources, and customer service are of medium strategic importance and require skilled people to successfully execute the company's goals. Finance and accounting, on the other hand, is considered of lower strategic importance and thus requires average talent to carry out its functions successfully.

If a company's strategy is to differentiate itself through innovation, then it must prioritize allocating its resources to recruit the best people in the field of research and development.

The affect of talent availability

Another factor that shapes the hiring assessment strategy for each function within a company is the availability of talent for that function. For some functions, talent availability is high which means that it is easy for company to recruit the right people through the labor market. While for other functions, talent availability can be low hence finding the right people can be very hard simply because there are not enough people out there.

The affect of demand for a particular function

Another factor that impacts the development of a talent assessment strategy is the level of demand for a particular function. A high demand means that the company is constantly seeking to recruit for that function, while a low demand indicates that the company only occasionally recruits for that function.

If for a particular function, the company's demand for new hires is always big and the talent availability is low, that makes that function a bottleneck function.

Bringing it all together to build a hiring assessment strategy

To conclude the analysis, examine your company and identify the functions according to their strategic relevance, the availability of talent in the labor market, and the level of demand for each function within the company.

Source: Trost. A. (2012) Talent Relationship Management <br>
Source: Trost. A. (2012) Talent Relationship Management

Considering all factors such as strategic relevance, talent availability, and demand magnitude for each function, it becomes easier to establish an effective hiring assessment strategy for the company.

When a function has high strategic relevance, and the company has a significant and ongoing demand for hiring new people, and talent availability is medium or high, it is essential to invest in tailored recruitment assessments for that function. Building custom assessments can help to empower employer branding, identify the best performers and improve the assessment process over time by analyzing the performance of new hires and adjusting accordingly.

If the demand is low and the function is not of high strategic importance, it is generally more cost-effective and convenient to use standardized hiring tests for the hiring assessment process.

An example analysis of hiring assessment methods for different functions in a company

FunctionStrategic relevanceTalent availabilityDemandHiring assessmentWhy
Research and Development HighMediumHighTailor made customized hiring testsImproved performance, enhanced employer branding, and ongoing improvement
Sales and Marketing MediumHighMediumStandard hiring testsConvenient and cost-effective
Manufacturing and Production HighHighHighTailor made customized hiring testsImproved performance, enhanced employer branding, and ongoing improvement
Information Technology MediumLowLowStandard hiring testsConvenient and cost-effective
Human Resources MediumHighLowStandard hiring testsConvenient and cost-effective
Finance and Accounting LowMediumLowStandard hiring testsConvenient and cost-effective
Customer Service MediumHighHighStandard tests or Tailor made customized hiring tests

About the author

Mustafa Ekim, is the founder of Testinvite, an online assessment software that enables companies to improve their hiring assessments by utilizing premade standard tests, as well as custom assessments for functions of high strategic importance.

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