Megacable case study
Research shows that more than 60% of turnover is voluntary, and that about 40% of voluntary turnover occurs in the first 6 months of employment (TALX, 2014).Midot StabiliTEST is an innovative web-based questionnaire designed to predict early voluntary turnover among job applicants. Megacable Communications is a Mexican cable operator and provider of internet and phone services.
Megacable is a publicly traded company on the Mexican stock exchange, and is one of the biggest and most successful in its field. The company has about 12,000 employees working in three main areas: sales, technology and operations.
The damages due to early voluntary turnover include recruitment costs, employee training costs and wages, and more. And, unlike longer term voluntary turnover, early leavers have typically not yet been productive enough in their jobs to return value to the company – especially in the first 3 months, which represent nearly a full loss to the company.
Despite Megacable’s comprehensive recruitment process, it was experiencing high early voluntary turnover. And, based on its positive experience using Midot’s other assessment tools, Megacable agreed to try out its new StabiliTEST for a period of one year.
The StabiliTEST is a short questionnaire that measures job applicants’ turnover cognitions (e.g., desire for the job, intention to stay) and personal characteristics (e.g., personality traits, and past performance) as a means to predict early voluntary turnover. The validity of the StabiliTEST was tested in 2 studies: First, the StabiliTEST was administered to a sample of over 400 new hires at Megacable, who were then monitored for up to 6 months for voluntary turnover. Next, the StabiliTEST was used operationally for a period of 12 months, after which time the company’s overall turnover rate was compared to that recorded 12 months prior to using the StabiliTEST. In all, the StabiliTEST was administered to about 18,000 job applicants over this period.
The results of the first study found the StabiliTEST to be a reliable and valid tool for predicting 3-6 month voluntary turnover (r = .22-.30), whereby low scorers were more than twice as likely to leave the company within 3-6 months than other scorers.
In the second study, the company’s 3-month early voluntary turnover rate was found to have gone down in 28% during its use after 1 year. This significant reduction was estimated at more than $600,000 dollars in saved costs to the company over the 12 month period! In addition, the 6-month voluntary turnover rate was reduced in 22%, for a savings of more than $800,000. The company attributes much of these reductions to its use of the StabilitTEST.