Selecting Top Talent at Procter & Gamble

Scott Read

Global Talent Supply

Robert E. Gibby, PhD HR Research and Analytics

Agenda

• Today’s Recruiting Landscape

• P&G’s Recruiting and Assessment Processes

• Why is technology so important to P&G’s Hiring Process?

• Why use adaptive testing?

• What does it look like?

• How do we know our assessments work?

Today’s Recruiting Landscape

Talent Acquisition Pressures

60 %

40 %

20 %

52%

49% 49%

Increasing

competition in the

marketplace for top

talent

Shortages of required

skills available in the

labor pool

Pressure to meet

the company’s

growth objectives

Pe

rce

nta

ge

of re

sp

on

de

nts

(n

= 5

06

)

Source: Aberdeen Group Aug 2011

Top Strategic Actions

Perc

enta

ge o

f re

spondents

(n =

506)

Strengthen ability

to identify talent

most likely to

succeed

Proactively build

candidate pipeline

Create a better

candidate

experience

Building a talent

acquisition culture

25 %

50 %

Best – in – Class

Industry Average

Laggard

43%

41% 41% 35% 35%

33%

31% 34%

22%

31%

22% 18%

Source: Aberdeen Group Aug 2011

Assessment Drives Better

Hiring Decisions

Prediction

Selection System

Integration

Global Reach

Customized Branding

Test Security

Process Efficiency &

Usability

Sustainability & Innovation

Risk Mitigation

Assessment Drives Better

Hiring Decisions

P&G’s Recruiting and Assessment Processes

P&G’s assessments are completed by 1,000,000+ candidates a year in more than 80 countries

P&G’s Recruiting Landscape

Philosophy

Scope

U.S. Sourcing

U.S. Degrees

Diversity

Build-from-Within: Primarily entry level hiring -- All degrees / Jobs

Line Partnered: 30+ Multi-functional School Teams in U.S.

30+ Single-function Schools

Global Hiring 2,500 – 4,500 Managers --- 84 countries

1,500 – 2,500 Administrative and Technical

6,000 -- Plant technicians

Extensive Intern/Co-op programs globally

64% School Team / 36% Internet + Other Sources

BA

MBA

BS Eng.

MS Eng.

Ph.D.

30%

20%

30%

7%

13%

U.S. Female: 50% / Global Female: 45%

U.S. Minorities: 36 – 44% in total

Meet or exceed availability for each under represented groups

‘Build-from-Within’ Means…

• Next Generation of P&G business leaders already within our ranks

• Heavy investment in Leadership Development and Assignment Planning

• Heavy investment in Assessment up front to ‘get it right’

• Can’t afford high attrition – especially in the early career years – or talent pipeline is disrupted

• Can’t afford the variability that comes hiring decisions based on interview data alone

P&G’s Recruiting Landscape

Your chances at NASA? 0.4%

Are you really more likely to be an astronaut than a P&G employee?

Which means you have a 1% opportunity of working for PG

Your chances at Harvard? 9%

Globally we hire 10,000 Full time and Interns per year from the 1,000,000 applications that are submitted

Focus on factors that count and predict job performance

Our tests have been designed to measure performance dimensions that are clearly important and job-related, as determined by thorough research and analysis of P&G work

Are objective and fair

Irrelevant data (appearance, contacts) is disregarded and every candidate is asked the same questions, given the same amount of time, and compared on exactly the same metrics

Are comprehensive

Our tests have been designed to measure skills and accomplishments which generally cannot or do not emerge from interviews. In addition, the tests allow candidates to be asked many more questions than would be possible in an interview

Are efficient

With large candidate volumes, tests allow us to focus our limited and valuable recruiting resources on those candidates with the highest likelihood of success at P&G

….netting in better hiring decisions + competitive advantage for talent

Put simply, we get our best quality employees when we use a Total Assessment process consisting of sound resume screening, multiple interviews, and multiple tests that…

Objectives Guiding Development and Use of P&G’s Assessments

Prediction

• Measure quality in a more holistic way

Selection System Integration

• Drive scale by eliminating regional and country assessments in favor of a single set of tools that deliver calibrated global talent

Test Security

• Move to a fully online assessment environment where security is provided by creating a unique test for each candidate and a calibrated verification process at Day Visit

Fairness (Risk Mitigation)

• Seek to minimize cultural and racial adverse impact

In line with these objectives, we designed the “blueprint” model of the new system:

Unsupervised, Online/Telephone Delivery Supervised Delivery

Personalized Candidate Web Portal

English Language

Assessment (as needed)

Noncognitive Test

Supervised Cognitive

Ability Test

Pre-Screening Assessment

Adaptive Reasoning

Test

Structured, Behavioral Interviews

Business Unit Assessment (as needed)

Technical Interviews

(as needed)

15 minutes

25 minutes

30 minutes

15 minutes

60 minutes

65 minutes

- - - - - All tests are hurdled with minimum scores defined through global validation efforts

Why is Technology So Important to P&G’s Hiring Process

Technology drives P&G’s hiring process….

Process Efficiency & Usability + Global Reach

• Isolate the best of the best candidates among more than 1 million applications

• Improve efficiency and productivity throughout the assessment and hiring process

Customized Branding

• Create a candidate experience that attracts and maintains interest through the assessment process

• Provides candidates with understanding of why they are being assessed and how assessment results give them assurance of post-hire success

Sustainability & Innovation

• Pioneer the use of web enabled, artificially intelligent test delivery to increase precision, allow for shorter tests, and ongoing question research and input

• Investigate use of cultural scoring algorithms to increase prediction and fairness in the global process

SHRM Recognition: Employment Branding Awards

1st Place – Best Attraction Microsite -

Experience P&G

1st Place –Best Global Collateral Materials -

P&G Global Attraction Templates

2nd Place – Best Local Attraction Website – P&G

Cincinnati

2nd Place – Best Social Media Pages – P&G Global Facebook/Youtube pages

2nd Place – Best Internal Campaign – P&G Social

Media Strategy Video

3rd Place – Best Recruiting Brochure – P&G

Engineering Campus Brochure

Why Use Adaptive Testing?

Ensures P&G Hires Smart People

• Provides the strongest prediction of performance available from a single test

• More than 1,000 test questions calibrated with the help of 180,000+ candidates

Balanced Assessment of Cognitive Ability

• Measures diversity in thinking styles, balancing left and right brain styles

• Drives creation of an innovative workforce

Predicts performance in a non-discriminatory way across all demographic groups

• Questions eliminated that displayed differences by gender, race/ethnicity, culture or age

• Validation with 2,000+ employees displayed equal prediction across groups

Complies with legal/regulatory requirements

• Verification Reasoning Test used to ensure results of online, unsupervised Adaptive Reasoning Test with 90%+ convergence

Conceptual &

Strategic Thinking

Raw

Processing

Power

Learning

Innovative

Capability

Decision-

Making

The Adaptive Reasoning Test and other Next Generation Assessments provide positive ROI through…

Increased efficiency in reaching a broader set of candidates

• Nearly 70,000 more candidates assessed on cognitive ability this year

Reduced resources – money and people – for global testing

• More than 25,000 fewer paper-and-pencil tests delivered last year

• Allows for HR and line resources to focus on other value-add work

• Reduces costs associated with test printing, delivery and scoring

• If we assume that each paper and pencil Reasoning Test costs $15 US to deliver, the savings each year is over $375,000 US

Global calibration of talent at entry

• Creation of a fluid and diverse global workforce able to operate in a VUCA world

• Critical for driving our promote from within talent systems

Management of increasing candidate volumes

• 1,000,000 applications per year and growing

Online assessments also create positive benefits for candidates

Conducted extensive candidate reactions research with thousands of candidates from across the globe to ensure our assessment process:

• Allows 24/7 flexibility to complete online assessments – especially important to Gen Y and Gen Cloud candidates

• Provides an application and assessment experience consistent with their expectations and desire to showcase their abilities

• Delivers quicker turnaround of our hiring decision

• Increases prediction, working to ensure their success with P&G post-hire

• Provides fair and unbiased assessment of the full range of their skills and capabilities – eliminating human judgment/desire of managers to hire people like themselves

• Delivers real time status and communication through our Candidate Web Portal

• Provides the ability to deliver branding, links to social networking and realistic job preview information to help candidates assess whether they are fit with P&G

What Does it Look Like?

Question #3 :10

How Do We Know Our Assessments Work?

Adaptive Testing: Increased precision with fewer questions – delivers quality of hire Low likelihood that two candidates get the same test

Research Item

Final Ability Estimate/Range

Incorrect Response

Incorrect Response

Incorrect Response

Initial Ability Estimate/Range

-1 -0.5 0.5 0 1 1.5 2.5 2

0.0000000000

0.3881931938

0.3881931938

0.7420871028

1.0562633763

1.3629186656

1.419023159

1.5764051338

1.11742

1.6518438240

1.22502

1.22696

1.28667

1.34550

1.38549 15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Ensures we are spending interviewer time on the best of the best candidates

0

500

1000

1500

2000

2500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

RT scores with passing RS score RT scores with or without RS scoreVRT scores with passing ART VRT scores with or without passing ART

Based on reaction from industry, universities and external partners, P&G’s Assessment System is seen as a best practice approach…

Cognitive Assessments selected as one HR Executive Magazine March 2009

of the “Best HR Ideas for 2009”

Assessments named as “Best in Class Recruiting Roundtable November 2008

Recruiting Process”

P&G is the only company allowed to Harvard University 2008 – ongoing

conduct assessments prior to Interviews

20+ professional publications, book Society for Industrial 2004 – ongoing

chapters, and presentations that Organizational Psychology,

showcase NGA as a best practice among others

in industry

….and Most Importantly, candidates continue to seek jobs at P&G

Hiring this year at P&G included…

• The fewest positions available in our recent history

• A 4+ month hiring freeze

• Another record year for the # of applications/job posting

• More than 600,000 online applications