Quality Program Begins With Hiring

They're hiring about 100 fewer service techs per month, which amounts to a savings of about $7 million a year.

September 18, 2003
Name: American Residential Services
Location: Memphis, Tennessee
Business: Heating, venting, plumbing, air conditioning, and electricity service company
Employees: 7,000

When American Residential Services started its Six Sigma quality-improvement process, one of the first issues it targeted was turnover among the company’s 4,000 service technicians. In 2000 its turnover was 70 to 80 percent—not bad for the industry but unacceptable in the eyes of the ARS executive team, says Robert Beckmann, vice president and Six Sigma Black Belt, whose sole job at ARS is to implement Six Sigma projects. "One of our primary objectives with Six Sigma is to put greater focus on employee development. That begins with hiring," he says. "We needed to do a better job selecting people."

    To reduce the number of bad hires and to get a better overall understanding of the quality of applicants, Beckmann implemented a Wonderlic pre-employment assessment test for service technicians. At first, hiring managers were worried that the test would cut off their supply of labor, he says. But when they saw the results of the pilot project, which tracked assessment scores at two service centers, their fears were quelled. Only 10 to 13 percent of applicants scored below 70, which is the test’s "be careful number," Beckmann says. "It eliminated applicants with the least likelihood to succeed, but it didn’t prevent managers from filling job openings."

    Beckmann sees that 13 percent elimination as a significant cost-savings for the company. He estimates that each lost technician costs $5,500 to $7,000 and believes that before the test, all of those techs would have been hired on the spot. Except for drug and criminal-background screening, the company didn’t have a detailed interview process. "If they had a license, we got them on a truck," he says.

    With the success of the pilot program, Beckmann rolled out the tests to the rest of the company’s 70 service centers in January 2002. Now, whenever technicians fill out an application, they also complete the 90-question test, which rates their reliability, customer-service aptitude, and retention likelihood. Managers fax the test to Wonderlic and are e-mailed the results in minutes, allowing them to determine on the spot whether to continue the interview process.

    One year later, the number of those who score poorly on the assessment hovers at 10 to 14 percent for all the centers, he says, and the result of not hiring those people has been dramatic. While the number hasn’t been officially calculated, preliminary data shows that turnover had dropped 20 percent by November of last year. That means they are hiring about 100 fewer service techs per month, which amounts to a savings of about $7 million a year. Beckmann attributes that largely to the test and its impact on the hiring process. "It gives rigor to our entire selection process," he says. "It makes us take a better look at people and think about the implications of hiring them."

    And the benefit of the tests touches all of the company’s employees. "Every service team is like a club," he says. "When there are people in the group who don’t fit, it’s demotivating for the others. Our goal is to have elite teams of technicians who take care of each other and look out for one another." The test, he says, is the first step in helping them achieve that goal.

Workforce, April 2003, pp. 67-68 -- Subscribe Now!