Considering the time, energy, effort, bandwidth and billions of dollars companies put into hiring and recruitment, the results aren't very good. A recent finding from Bersin by Deloitte revealed that more than 70% of organizations cite “capability gaps” as one of their top five challenges. Further, nearly a quarter of all new hires leave their company within a year of their start date, and hiring managers say they wish they hadn't hired one out of every five members of their team. So what’s the solution? A handful of Silicon Valley companies say it's games, big data and analytics that will wrest the hiring process away from credentials, colleges and connections.

"There's something about gaming and play that brings out your real true self," said Knack CEO Guy Halfteck, in a podcast with Forbes contributor Jacob Morgan. "It reveals things about you, brings them to the surface. When people play these games, and we collect the data, we are able to say something very meaningful about you that is also very accurate." 

Let the games begin

Knack makes video games designed by a team of neuroscientists, psychologists, and data scientists to quantify and predict human potential. The games include Wasabi Waiter, which involves delivering the right sushi to the right customer during a busy happy hour, and Dungeon Scrawl, a quest game requiring the player to navigate a maze and solve puzzles.

Though Halfteck says the games are easy to get into and fairly relaxing to play, a lot is going on below the surface. By playing one of them for just 20 minutes, you’ll generate several megabytes of data, a lot more for example than what might be collected from an SAT, ACT or personality test. 

How long you take to make up your mind, the path and sequence of actions you take, the manner in which you deal with and solve problems, conscientiousness, emotion recognition, all of those things and more are tracked and measured while you play. 

In turn, these hundreds of variables are all used to analyze your creativity, your persistence, your capacity to learn, your ability to prioritize, and even your social intelligence and personality. 

The result, Halfteck says, is an accurate picture of a person that is highly predictive of their success on the job. The job you are hiring them for. 

“People are our biggest resource, and right now a lot of them are mismatched,” says Erik Brynjolfsson in this very good article on the subject of people analytics in The Atlantic. Brynjolfsson is an adviser to Knack and director of the Center for Digital Business at the Massachusetts Institute of Technology Sloan School of Management.

Awash in algorithms

He also knows a lot about algorithms. Brynjolfsson and Andrew McAfee write in this piece in the Harvard Business Review that "more data cross the internet every second than were stored in the entire internet just 20 years ago. This gives companies an opportunity to work with many petabyes of data in a single data set—and not just from the internet. For instance, it is estimated that Walmart collects more than 2.5 petabytes of data every hour from its customer transactions. A petabyte is one quadrillion bytes, or the equivalent of about 20 million filing cabinets’ worth of text."

The very first algorithm is credited to 9th Century Arabic scholar Al Khwarizami. Today, these decision-making processes buy and sell stocks, determine what is recommended for us on Amazon and Netflix, and analyze our online activity so marketers can give us what they think we want. 

However, the algorithm-aided, data-driven approach to hiring and workforce management is fairly new.

As a result says The Atlanticnot much hard data exists at the moment to demonstrate its effectiveness, but "the arena in which it has been best proved, and where it is most widespread, is hourly work."

That's because the tasks are standardized, they exist in huge numbers, they turn over quickly and success can be clearly measured.

It's a fact that there is a fast-growing digital trail from assessment to hiring to work performance and work engagement. But not everyone is convinced the journey will be easy or smooth.

I found a quote in the comments section of this article about people analytics in The Washington Post.

"Any company that thinks they will get less turnover and better output using big data HR, without investing a lot more money in human evaluation, pay and training (and ongoing training of management), however, doesn't just risk homogeneous, inflexible, uncreative work forces. They risk getting snookered."  

The future

MIT's Erik Brynjolfsson concedes "big data’s power does not erase the need for vision or human insight."

Knack's CEO Guy Halfteck also says it's not his contention that algorithms will ever entirely replace human judgement. 

"The role of big data and algorithms is to actually guide our judgement. And to help inform the way we look at the world, help us make sense of it and introduce some rationality and some empirical data to improve a process."