When Thomas McNamara first started as human resources director for New England Book Components Inc. in 1989, a speciality printer in Hingham, Mass., the company had a 56 percent employee turnover rate. This means more than half of the employees had to be replaced each year. By 1991, the rate was 8 percent.
The first step toward keeping employees longer is hiring the right employees, Mr. McNamara says. "So we trained managers to be better interviewers, to ask the right questions and look for special characteristics such as punctuality, dependability, and reliabiltiy." As a result of this practice, turnover dropped to 25 percent the first year.
"We were ecstatic, but we were still losing people," McNamara says. So they looked into tests that might help with the screening process. The company chose the Employee Reliability Inventory (ERI), a questionnaire from Bay State Psychological Associates in Boston, designed to measure a person's job commitment. By the end of 1990, taking the ERI became a required part of the application process.
New England saw immediate results - though McNamara says the region's faltering economy also helped to reduce turnover. "People couldn't afford to leave."
He says "the ERI helps us flag areas of concern that we wouldn't have thought to check before." For example, if the potential employee shows a weakness in safety on the tests, the former employer is asked specifically about this.
As a result, lost time due to accidents dropped. "In 1989, we had 20 lost-time injuries and 313 lost work days. In '91, we had only 13 injuries and 204 lost days," McNamara says. The ERI consists of 81 true-false questions and takes 10 minutes to complete.