Case study - cut-e

The challenge: designing a comprehensive, cost effective and
accurate recruitment process for shop floor sales personnel
This case study presents how Elkjøp Nordic is now able to pick candidates with the
highest sales potential by redesigning their recruitment process. Using the compound
score, based on personality and ability measures, candidates applying for sales positions
at Elkjøp can be categorized based on their sales potential. Candidates with high scores
will be high performers on the job. This means real financial results: compared to the
average scoring salespersons, the top scoring salespersons contributed 50% more to
store revenue, and the lowest scoring salespersons contributed 58% less. With nearly
900 new hires per year, even a slight improvement in sales per person, on average, will
have a major impact when added up. Cost savings as a result of a more efficient and less
time consuming recruitment process comes on top of this.
Elkjøp at a glance
Elkjøp Nordic is the largest retailer of consumer electronics and household appliances
in the Nordic area. The Group is owned by the British Dixons Retail plc., one of the
largest retailers of consumer electronics in Europe, with a turnover of NOK 26.2 billion
(EUR 3.1 billion) in the fiscal year 2012/13. The group has about 8,500 employees,
and operates in Norway, Sweden, Denmark, Finland, Czech Republic, Slovakia,
Iceland and the Faroe Islands.
Elkjøp Nordic is growing rapidly and has nearly 2,000 recruitment processes and more
than 50,000 applicants a year. This places great demand on the recruitment process,
both in terms of efficiency and accuracy. Until 2012, Elkjøp’s recruitment process was
not centralized, with local variations and sometimes significant elements of
subjectivity. In 2012, a project to structure the process was launched and selection of
appropriate assessment tools was defined as central to the project. Relevant partners
were invited to the tender process and cut-e was selected as the supplier of
assessment tools and assistance in terms of training and implementation.
The objective of this project has been a common, structured Nordic approach that
ensures quality and efficiency across national boundaries but still keeps strong focus
on the individual stores' needs. Central to the work has been the identification of key
characteristics of successful employees, which is crucial for successful recruitment and
developing the sales force further.
© cut-e 2014, all rights reserved, E-Mail: [email protected], www.cut-e.com
Case Study: Elkjøp Nordic
Optimised
recruitment
process for
sales staff
The solution: defining personality traits and abilities that predict sales
success
Testing the current sales force
In order to identify what characterizes the most successful shop floor sales people in Elkjøp, 6371
sales staff from Norway, Sweden, Finland, Denmark and the Czech Republic were invited to
complete a test battery. This test battery consisted of the shapes sales personality inventory and the
scales aptitude tests sx-a measurement of deductive logical reasoning and ix measurement of
inductive logical reasoning. shapes sales provides an overview of personality traits and preferences
that are believed to be key to sales success. The ability tests combined are used to measure logical
reasoning and problem solving abilities. 760 sales professionals completed all tests. Sales results for
all participants were collected and the results of the 374 candidates where both sales results and
test results were present were analysed.
Personality and ability predicts sales success
The analysis shows that the test battery can be applied to identify effectively the candidates with the
highest sales potentials.
Personality
r=.49*
r=.27*
Deductive reasoning
Sales success
r=.31*
Inductive reasoning
* Statistically significant at the .01 level
Based on the test results a compound score was constructed. This score is now used when assessing
candidates for sales positions, indicating each candidate’s sales potential. The compound score can be
expressed on a 5-point scale, where 1 equals very weak, 3 is average and 5 is very strong sales potential.
The outcome: The return on investment (ROI) of hiring better sales staff
Current relationship between the compound score and relative sales contribution to store
revenue
The figure below presents the contributions of the five categories based on the compound score. Score 3
here represents mean and the percentages reflects how the other categories varies from this.
Average Relative Sales Contribution to Store Revenue
Compound Test Score (Test Score of 3 is Basline)
60%
50%
% Higher Contribution
on Store Revenue
40%
26%
20%
0%
0%
1
2
-20%
-40%
-60%
-80%
-40%
-58%
3
4
5
Using the compound score, which is based on personality and ability measures, candidates applying
for sales positions at Elkjøp can be categorized based on sales potential. The highest scoring
candidates will produce the highest performance on the job. Compared to the average scoring
salespersons, the top scoring salespersons contributed 50% more to store revenue and the lowest
scoring salespersons contributed 58% less. Based on this, Elkjøp should strive to hire candidates
with the highest scores possible. In selection processes where there are only few applicants Elkjøp
should try to avoid hiring candidates that fall below score 3.
Further current relationship between the compound score and relative sales contribution
to store revenue
Our analysis shows that Elkjøp will gain 50% increased relative contribution to store revenue every
time a candidate with score 5 is selected instead of one with score 3. Even when hiring candidates
with score 4, a significant gain in contribution of 26% is achieved, not to mention the effect of
replacing weak candidates (scoring below 3) with average or strong candidates. In terms of
increasing the turnover of the entire shop, our analysis indicates the following numbers: an increase
in turnover of 3,41% if candidates with score 4 are hired and an increase of 5,75% when candidates
with a score 5 are hired. This will be covered in a later version of this paper, based on a greater
dataset.
With nearly 900 new hires per year, the effect will add up significantly. With these numbers, even a
slight improvement in sales per person on average will have a major impact when adding up. Cost
savings as a result of a more efficient and less time consuming recruitment process come on top of
this.
When it comes to Elkjøp Nordic’s empirical Return On Investment (ROI) in total, the current dataset
does not allow precise analysis. We will therefore await the collection of bigger datasets, when the
recruitment process has been run for a while. However, in the meantime, ROI can be predicted
theoretically. This falls outside the scope of this paper, but will be covered in a similar paper in
future.
Personality, ability and sales success
The following personality characteristics most important for sales performance in Elkjøp Nordic:
influencing: finds it easy to influence and convince others; likes to use own power of
persuasion; enjoys selling and negotiating
sociable:
is talkative, lively and sociable; enjoys being in groups; entertains others and has
a wide network of contacts
competitive: likes to compete against others; is determined to win; enjoys talking about own
achievements
behavioural: does not have excessive interest in others' behaviour; does not observe and
analyse others' motives and reactions too intently
Ability measures that contributes to sales success in Elkjøp:
Deductive reasoning (scales sx-a): Measures the ability to apply rules and principles in solving
problems and performing tasks
Inductive reasoning (scales ix): Measures the ability to detect underlying principles and
combining information in order to solve problems and performing tasks
For any further information please don’t hesitate to contact us!
E-Mail: [email protected]
www.cut-e.com
E-mail: [email protected]
www.cut-e.com