Summary

A top 50 industrial distributor partnered with Cangrade to overhaul and enhance recruiting and employee development in the company’s core U.S. operations.

Leaders have credited these new processes with a number of significant business outcomes, including a revenue impact of over $70 million a year, profit increase exceeding $12 million a year, and a 28% drop in salesforce first-year turnover.

Following these results, this industrial distributor made the decision to nearly double its investment in HR Analytics, expanding the solution to improve the hiring and development of customer service and sales representatives and extending its usage to additional business units.

Challenges and Goals

When joining this industrial distributor in 2014, the CHRO discovered gaps in the organization’s implementation of strategic HR practices. “We knew which people and which teams were performing well, but had no idea why? Or how to replicate their success in an organized fashion.” Furthermore, they felt that first-year turnover in revenue-driving positions such as Account Managers was higher than desirable.

To address these challenges, the leading industrial distributor introduced a major HR Analytics strategic initiative with two goals:

• Increase service center revenue and net profit
• Decrease “false starts” or first-year turnover

The Solution

AI Success Models

Cangrade’s AI engine analyzed current employee personality attributes and performance data to determine what drives success for each role in the organization.

Pre-Hire Assessments

The industrial distributor uses Cangrade’s AI-based pre-hire assessments, based on their custom built success models, as an early step in hiring. These assessments serve as an initial screen in the recruiting pipeline, identifying which applicants are statistically likely to succeed and should be considered for further interviewing.

Structured Interview Guides

When a strong candidate is identified, hiring managers conduct a structured interview using the Cangrade platform. The behavioral questions in Cangrade’s Structured Interview Guides have been identified and standardized based on core competencies identified in the benchmarking process, with specific questions selected based on the candidate’s responses to the screening assessment.

Results

HR Analytics was initially met with cautious optimism at the industrial distributor. As results started rolling in, even the skeptics were converted.

Revenue

Service centers that successfully built teams with higher fit scores statistically outperformed their peers. Analysts estimate that improvements in this resulted in over 70 million dollars per year in additional sales.

Net Profit

Analysts estimate an impact of over 12 million dollars in additional profits each year since Cangrade’s solution was implemented. Service centers where employees adopted the recommended coursework tended to become even more profitable, contributing more than one million dollars a year in additional profits to the bottom line.

Retention

In the first 4 years of the solution rollout, false starts for core sales employees were reduced by 28%. When the solution was expanded to customer sales and service reps, false starts for that group declined by 17%. These improvements occurred despite a particularly strong job market, during which turnover would be expected to increase.