Omer Molad from Vervoe on Skills Assessments & Hiring Based on Merit | HR Think Tank #7

Skills are things that you can learn, while personality is typically fixed and stays with you for your whole life.  

Personalities can vary slightly, but people don’t normally change their personalities drastically. Whereas skills like welding metal, designing a logo, selling software, being good at pottery, or flying an aircraft – they’re things that we can learn over time.  

And if we go deeper into the definition of a skill, there are two dimensions: hard skills and soft skills.   

People often refer to hard skills as job-specific skills – in other words, doing something that’s specific to one job or a general work skill. On the other hand, soft skills apply to most or many jobs, such as attention to detail, openness to feedback, or working in a team. 

Here at Vervoe, we’ve essentially taken what the movie industry has been doing like auditions, and brought it online, made it digital, made it asynchronous, and made it possible and available for every job.  

There are a few other industries in technical roles like engineering where it’s common to ask job candidates to do a code test. Or sometimes, in hospitality, candidates will be asked to do a shift in the kitchen.  

We have taken that concept and applied it across all industries and job specs. So, from the supermarket checkout cashier to the data scientist, salesperson, marketing person, and security officers. 

There are obviously exceptions where there are more limited applications.  

So, cardiothoracic surgery is probably less relevant to online simulation, but for the vast, vast majority of roles, you can put candidates in job-related scenarios online in a way that gives you very valuable insight. 

It’s a real mixed bag, to be honest. But, it typically depends on three things: the job, the company, and market conditions.  

So, for example, if you have a role like a call centre role, where you have a lot of applicants, and your company has a brand that can attract many candidates, then the main problem you’re trying to solve is filtering – you’re trying to get from a thousand applicants to ten.  And so, in that scenario, you want to use skills assessments at the top of the final and automate the grading and the ranking of candidates.  

Now, there are other roles, typically more highly skilled roles, like a data scientist, for example. 

In this scenario, there are probably more vacancies than candidates, and if you’re going to hire a data scientist or an astrophysicist, you’re probably going to have to attract passive candidates. People aren’t going to be fighting amongst themselves to apply for your job. And so, you might use a skills assessment further down the funnel after you’ve courted people and convinced them that they want to work for your company.  

Now, you still want to do a skills assessment test because you don’t want to compromise your standards, and you want to make sure that they can do the job. But it serves a different purpose to the call centre role.  

The other day, I heard about a favoured senior person at a big company being put in a role that didn’t necessarily suit that individual. The CEO thought they were a star, but then they were placed in a position where they couldn’t perform.  

That wasn’t an example of a really good performance, and that reminded me that there’s no such thing as a star. There’s someone who can be a really good performer in a certain environment.  

So, it’s all guesswork. So, unless you’ve worked with someone for a long period of time, you don’t know for sure, and even then, they might be great at role A but not great at role B. 

So, the whole game of recruitment is establishing how to minimise the guesswork. The more you see people doing job-specific tasks, and the more you give them a chance to do a slice of the job, the less you’re relying on guessing, and the more confidence you have. And that’s true whether you have a thousand applicants or one.  

But you need to adapt your workflow and your recruitment process to the market conditions and the situation you’re facing – depending on how many candidates you have and the problem you’re trying to solve. 

Yes. So, when people have language barriers, learning disabilities, physical disabilities, or vision impairment, Vervoe has workarounds to support that.  

Generally, however, we’ve found that there can be a tendency to put people under unrealistic pressure on the employer’s side. For example, it would freak anyone out if a series of ten questions would have to be answered, one after the other, within a two-minute time limit.  

That’s intimidating. And in what work setting are you going to have to perform your tasks in two minutes with someone sitting over your shoulder? 

So, we try to discourage that. 

Now, as an Olympian, if you’re competing in 100 meters freestyle, you train for that repeatedly. And so, there are cases where you want to use video, and yes, there are cases when you want a time limit, but not for every question, not for every task.  

And people get carried away with technology, and then they say, “Ah, candidates aren’t doing this or candidates didn’t do well.” Well, because you scared them. If you want to know if someone can weld metal, watch them weld metal. You don’t have to watch them welding metal with a gun to their head. That’s not the scenario that they’re going to face on the job.  

So, we encourage being realistic.  

I went to law school, and in law school, exams are an open book, and people think that’s easier. Actually, it’s much harder because you can’t memorise anything. There’s no point. It’s not going to get you anywhere. It’s all about analysis and adapting the materials to the scenario you’re going to get. So, I think that’s a good analogy.  

Sometimes giving people more time is actually more challenging. And so, the assessment has to be appropriate to the job. Employers should also focus on setting people up to succeed, not to fail. That way, the top candidates can rise to the top and shine, and you’ll know who stands out.  

You said the magic word, confidence. And that’s why, regardless of where you use skills assessments in the funnel, it’s all about confidence and where you find it more effective to deploy.  

But, having said that, if all you wanted to do was achieve efficiency at the end of the day, there are other ways to do it. For example, resume parsing is very quick. But it’s not going to predict performance. So you’re not going to end up with the best person because you’re still relying on the information in the candidate’s resume – which we know doesn’t predict performance. 

So, the key is confidence.  

Until you’ve worked with someone for a long period of time, the hiring process is a guessing game. So, how do you reduce the information asymmetry? How do you get as confident as you can? There are no guarantees in life, even with someone who’s a superstar. They might lose confidence. They might be in a poor environment. Things change. It’s human beings—it’s fluid. So, you want to get as much confidence as you can. 

Yes, America and APAC probably make up three-quarters of our client base.  And then Europe and parts of Asia make up the other quarter.  

​Let’s start with the big picture. So, we think of the market in segments: unskilled labour, semi-skilled labour, skilled, scarce, and then executive. 

So, unskilled labour is a role where you need to turn up, or you might need a drivers license, but you don’t need an education. You don’t need a high degree of any sort and hardly any skills.  

The semi-skilled segment is markets like high-volume call centres, retail and roles along those lines.  The skilled labour section comprises people with a high degree of skill and typically have a high degree of education. Generally, they work in an office, or they work in healthcare.  

And then have the roles that are hard to fill and the executive roles like the CEO of Qantas, for example.  

The semi-skilled and skilled segments is where most of our focus is, and that’s two-thirds of the economy. In the US, that’s about a hundred million jobs.  

​​Now, in the semi-skilled area, for example, we work with Walmart on multiple levels of roles, from the supermarket cashier to store managers and regional managers. Another example is with Australia Post, or pretty much anyone who delivers your mail. Those are the high volume, semi-skilled settings, where you’re testing thousands and thousands of people a day in a fairly basic way. It is job-specific, but it also might test things like punctuality.  

Then moving into the skilled area, the top three roles groups that we test for are tech, sales, and customer service – the two biggest industries are software companies and digital and ad agencies. These “new economy” companies hire knowledge workers – people who typically work in an office or work from home, but they’re not driving a crane or those sorts of workers. 

So there, the assessment is much more about confidence and less about efficiency. It’s less about filtering 10,000 people a day, and more about deep testing, rigorous kind of scenario-based testing, designing this onboarding flow, rewriting this sales deck and dealing with a customer scenario – middle of the funnel type testing.  

You might have 20 to 30 applicants, or you might have fewer. So, you’re trying to identify who stands out and often, it’s going to be the person you least expected. And sometimes it has to do with how much they want the job, how creative they are, and how hard they work – those people shine.   

So, the main two applications of the skills assessment:  efficiency for high volume semi-skilled roles and confidence for those more highly skilled knowledge worker type roles. 

David and I started the company together. We’ve been friends for 20 years but have had very different experiences in life. Ultimately, though, everything we’ve done in life has led up to this point.  

We had a perspective from both the candidate and the hiring side and saw the dislocation where the top performers in big teams were not necessarily the people you’d pick out of the resume lineup. They were often the self-taught, hungry kind of people that didn’t work at the logo company. 

At the same time, David read about how Automattic, the company that invented WordPress, was doing physical auditions, like a job trial, before hiring the right candidate. And we both agreed that that was such a great way to do it.  

The only thing it was missing was that it’s not efficient in every industry. It comes back to what I was saying earlier about reducing the guesswork and reducing the asymmetry.  

And then we got involved in a film – we invested in a movie. And the movie industry doesn’t really care what you’ve done before. There might be some exceptions if you’re Tom Cruise.  

But other than that, it’s basically an audition for the part. And like I mentioned about that star employee that was in the wrong role – you’re not going to cast Meryl Streep for Reservoir Dogs or Top gun. And Meryl Streep’s probably arguably the greatest or one of the greatest actors of all time, but just not in every film. 

So we realised that there has to be a better way to set people up for success and get them doing the best work of their lives – the job they were born for. And so, we said, “Okay, can we take this concept of an audition and make it online and for every job?”  

And that’s, really in a nutshell, it.  

We built fancy technology and built a big team, and we sell it, and people are using it all over the world, but when people say, “Oh, what is this?” We say, “It’s what the movie business does but for every job and efficiently online.” That’s it. And so, that’s never changed.  

It’s been extraordinary- what a roller coaster.  

So, a year ago, even sort of middle to late 2020, there were no jobs and a million candidates. The volume of candidates had increased up to three times and sometimes even five times for every role. Up to a third of recruiters were unemployed, and there were all these kinds of initiatives to get people jobs.  

Now, there are no candidates, and there are more vacancies than humans on the planet. It’s crazy.  

When the pandemic started, companies fired many people, and now they’re trying to hire them back plus another 5% to 10% on top of that. Then there’s government stimulus that, in some countries, has made it more attractive for people not to work.  

And then there’s the remote working prospect where people have said, “Well, ah, I can work from home. So, I’ll live in a different city, or I don’t want to do this minimum wage job anymore. I’ll just be a creator on Patreon and earn a living that way, which is more than minimum wage.” So, people have figured out that there are alternatives.  

There is a whole host of market forces coming to play together. And so, now, if you want to hire a recruiter, basically you have no hope because it’s the most in-demand role on the planet, whereas previously, they were unemployed. 

On the other hand, there’s a lot of talk about a skills shortage. And while there is a skill shortage, most of the time, it’s that companies want to pay minimum wage and then complain that they can’t attract anyone. Well, if you paid a few dollars more, maybe you will get people to work for you.  

So, the truth is somewhere in the middle.  

At the end of the day, if you’re a good company and you have an attractive proposition, you will find candidates. You might need to take a long-term view and develop candidates. For example, if there’s a shortage of sales reps and you’re in a competitive market, consider taking people, building a boot camp and developing their skills over time.  

If you’re compromising your standards and hiring candidates in a heartbeat, that will come back to bite you because you will end up with people who are not going to perform or not be engaged or who will leave.  

So, I would encourage companies to absolutely get aggressive in attracting candidates but also think about developing people and also think about making sure, no matter how aggressive you are in attraction, that you’re not compromising your standards.  

One of the things I’ve focused on is my communication and choosing which “shots” to play. People would come to me with problems and previously, my tendency would be to solve it. But what I’ve learned is that they don’t always want me to solve it, they just want me to listen, or they might want advice. So now I ask them, “Do you just want to vent? Or do you want my advice? Or do you want me to get involved?” So now I play the role of the custodian or guide. I’m still hands on with a lot of things, but this gives the space for others to develop their own leadership style and to grow. 

Regarding the quote from the blog post that you read, there’s a term we use called ‘impression management.’ There are people who are focused on observed performance and being seen, and there are people who focus on actual performance. And what you want to do is reward actual performance, not observed performance. Not people who do things to be seen, but people who do things quietly and get the results. If you want something enduring, what you need to do is set the standards and expectations, and have the right people there for the right reasons and trust that it will happen. Be there for them in the right ways and at the right times, and know that you’ve instilled the values and standards so that if you go on vacation, people will know what’s expected. Most leaders don’t want to do that because they want to be indispensable. But actually, if you instill that, you are indispensable because you’ve instilled a spirit and philosophy in the company. And that in itself is a big achievement. So that’s what I was referring to in that quote. 

The future is data and skills taxonomy.  We just launched what we call Closing the Loop, which gives employers the ability to tell us who they have hired. They tell us who they’ve hired when they hired them and who the hiring manager was. Then we will send the hiring manager a survey 120 days later, asking them if they would hire that person again, what rating they would give them out of ten, and additional comments they have.   

Now, this does two things: it builds proof around the quality of hire and helps the feedback loop.  

For example, if you hired ten people into backend engineering roles and seven are outstanding performers, we will then look at what they have in common in terms of how they performed the assessment. And it turns out that of those seven, six of them did well in questions four and eight, and those questions are specifically around openness to feedback, for example.  

Now we know that for backend engineering roles, either generally or in this context, openness to feedback is important. And then we ask, “Okay, is openness to feedback important for all engineering roles or just backend or backend at startups or all engineering roles at startups.” We’ve got all this data so we can make specific assessments for engineering roles.  

So that’s the future –  the taxonomy to be able to reduce the guesswork and with confidence say, “Okay, for this role, these are the skills that are really important, not because we think, but because we know, and the people who have these skills and can perform these tasks in this context have a high chance of doing well in that role in your company.” 

A lot of our energy and intellectual horsepower is going into that data loop. 

• What was your first job? In grade seven, I worked at an amusement park in Israel for five shekels an hour, which is like a dollar an hour. And it was horrible. We just got abused all the time by parents who wanted their kids to win the teddy bear. But that was the first—rocky start.  
• What’s something interesting that is not on your CV? I don’t have a CV, but if I did, I wouldn’t put on that we invested in a film called This Is Happening – definitely an interesting experience. Actually, I went to LA to sit on the set for a week and learned so much. I probably learned more from that than I did at a bunch of jobs or degrees. But that’s not something you put on a CV. 
• What advice would you give your eighteen-year-old self? Probably to worry less about how to get a job and how to have a good resume, and focus more on how to create my own job and focus on the things that I genuinely love doing, not what I think I need to do to be employable. 
• What book is a must-read? If you’re in my position and trying to build a company, read The Hard Thing About Hard Things by Ben Horowitz. I also think there’s a book called Atomic Habits, which anyone who wants to either develop or shed habits would benefit from. In terms of movies, I’d suggest Silver Linings Playbook.  
• What’s a job for the future that doesn’t exist today? As we automate many things, I think there will be jobs for thinking and being creative. Literally, that will be the job. I think companies will want people that are the opposite of AI. There’s AI that writes copy and AI that makes art, but that’s exactly the point. It’s the randomness and unpredictability about humans that people are going to be looking for. Eventually, we’re going to have people whose job it is to sort of be the custodians of the humanity of those sorts of traits. I don’t know what it will look like, but I hope we have people dedicated to them.