A recent Harvard Business Review article examines the hiring practices of four low cost retailers: Costco, Trader Joe's, QuickTrip and Mercadona. The study was interested in understanding why these four retailers were so much more profitable than most of their competitors. Retail is traditionally a low margin business, and the conventional wisdom is that tightly restraining labor costs is key to maintaining profitability. This study found exactly the opposite: these leading retailers typically spent more on the hiring process than their competitors, and invested more in their employees post-hire, which in turn, had a direct, positive impact on the bottom line. Spending more to hire better-trained, customer-focused sales staff leads to more sales per employee and per square foot.
In my last post I described our customer service test and the kinds of personality traits that it measures. People who have high levels of cooperativeness, patience, and personal diplomacy tend to be well suited for customer service roles. The use of personality tests is even more widespread, however, in helping select salespeople, because there's a lot of research that shows that people with certain personality traits tend to be successful in sales roles across a wide range of industries. Most personality tests that are designed to help select salespeople look for outgoing, fairly aggressive people that tend to be competitve and highly motivated. This general profile of a stereotypical sales professional is probably not all that surprising. But what kinds of research underlies this type of "sales profiling?"
To finish off our discussion about personality tests, I wanted to discuss ways in which test developers are moving beyond the Big Five. The Big Five is sometimes too broad to predict work behaviors for specific jobs, where more fine-grained personality measures may be useful. For example, it has been shown that certain jobs such as sales positions are best performed by people with a set of personality characteristics that correspond to the work activities involved in sales jobs. Sales jobs often require cold-calling, initiating social interactions, prospecting, and building relationships. It won't be surprising to most people that qualities like assertiveness, extraversion, competitiveness, and self-confidence might be qualities that could help an individual perform well in such roles. For work in the field of customer service, on the other hand, qualities such as patience, cooperativeness, and personal diplomacy would be most important given the job activities of most customer service positions.