Filling in the gaps by researching a candidate’s online records
Who isn’t concerned about the continued erosion of personal privacy in our “Brave, New (digital) World?” Even if you take all possible precautions–short of hanging out on the ‘Dark Internet’ (not a good idea), public and private institutions know more about you than you can imagine.
Is this always a bad thing? Surprisingly, new Internet algorithms designed to evaluate personal character for credit and other kinds of screening may be more fair and accurate than traditional methods.
Determining the credit risk of young people with no financial history
For example, how can lending companies fairly evaluate the credit worthiness of recent graduates who have never had a mortgage or car payments? Companies like Upstart, and ZestFinance are now filling in the gaps by researching a candidate’s SAT scores, quality of university attended, major, and grade-point averages. Validated data show that these variables correlate with the importance people place on their academic obligations and, hence, help predict their credit worthiness. Of course, there’s a clear difference between one’s willingness and ability to meet responsibilities, something that will require more sophisticated measures.
Zest differentiates between those who have had temporary bad luck, e.g., a one-time medical expense, and those who have a history of dodging and weaving obligations. Traditional tracking systems don’t.
Another critical ‘signal’ of credit worthiness is whether a young person has a history of dropping prepaid phone numbers. Because it’s so easy to track people via cell number, those who change them frequently often want to be invisible to family, friends and creditors.
Better than traditional evaluation criteria for hiring and firing?
Selection criteria in many areas of life are still largely based on face-to-face subjective first impressions. A large body of research confirms that managers hire those most like themselves, often with disappointing outcomes. Fortunately, more objective predictors of candidates’ likely job performance are beginning to emerge–with more focus on interpersonal skills via Emotional Intelligence and similar assessments
Job performance metrics aren’t new. Digitization, however, is giving employers more comprehensive, objective system for evaluating performance. Workday, for example, incorporates 45 employee performance measures in its HR software–predicting things like the likelihood an employee will quit with strategies for retaining valuable employees who may be thinking of bailing.
It’s a win-win when employers fully disclose how performance tracking metrics that define successful job performance. Sales staff, for example, need to understand the critical importance of tenacity (first defined in Martin Seligman’s classic 1991 book “Learned Optimism”). –If employees find it difficult to adopt traits that determine success, they have greater incentive to move on to work that is a better fit for their talents.
In the next and final installment of this article, I’ll discuss how computer-based metrics and apps like Gigwalk are shaping the future of finding employment and strategizing career success.