The next step in the evolution of predicting performance of franchisees and employees is to develop a prescreening (or prequalification) tool that has been designed to be used during the application stage. It should be inexpensive enough so there is no hesitation to have every applicant complete one.

Why should you develop and use a prescreening tool? Quite simply, it's to save you money. In the case of franchises, it helps your franchise development people stop dealing with unqualified and unsuitable candidates. Because your franchise sales department can now focus their sales efforts on those applicants that give the greatest return on investment, use of a prequalification tool reduces the cost of franchisee selection.

Use of a tool such as this helps increase franchise sales while helping your team select better franchisees. Because you're selecting better franchisees, inevitably this leads to increased royalties.

The consequences
In the case of employees, a quality prequalification tool can help you reduce turnover, save on training and recruitment costs and build a better team. Each of these also has an impact on your customers. High turnover leads to more pressure on existing employees as they'll have to take time away from giving great customer service and focus more on training the new hire.

A person can't give great customer service at the same time as they're training other staff. How many times have you groaned when you found out the your bank teller was new and in training? Were you inconvenienced by the resulting delays? Personally, when I see someone being trained, I tend to stay away. My day is simply too hectic. Taking more time out of it simply sets me further back.

What to look for in a prescreening tool
Eventually you'll want to look at the applicant's beliefs, their situational judgement and job specific behaviors. But for now, you'll want to focus on whether the applicant meets the minimum standards for your system. To do that, you'll want to look at Conscientiousness. If you recall, Conscientiousness is the personality characteristic with the best record of indicating future performance in a wide variety of jobs, so it's a good idea to include it in any early use assessment.

Another factor we touched on was Cognitive Ability. It would be nice to include this as well, but since it doesn't have the wide-spread applicability that Conscientiousness has, leaving it for use later in the process would be appropriate. Instead, when you're developing your own prequalification tool, choose those things that have a big impact on eventual success while keeping the number of questions low enough that you don't scare applicants away.

For instance, in addition to Conscientiousness, franchisors typically first and foremost want to know whether or not the candidate has integrity and what their lifestyle motivation is.

By integrity, I mean whether or not the franchisee will deal in unscrupulous or unethical ways. Lifestyle motivation can best be defined as the candidate's desire for wealth and high social status. Typically, franchisees that want to buy a franchise simply to get rich, don't do well for a variety of reasons.

When you combine these two characteristics, you can get a good read on the overall way the applicant will run their business. For instance, someone with low integrity that wants to live the "high-life" will conduct themselves very differently from someone that has a lot of integrity and has a moderate or low need for wealth and status.

Sample prequalification reports
For a sample franchisee prequalification assessment report, click here.

It's often stated that a prequalification tool should be designed to measure job specific functions. When used for employees, I would agree since the job is far more narrowly defined than running a franchise. A franchisee needs to be a "jack-of-all trades". It's very difficult to measure enough job specific behaviors so early in the process. Asking too many questions runs the risk of losing applicants. A real concern in today's climate.

It's also natural that the deeper you look into an applicant, the higher the cost. During the initial applicant vetting process, you want to keep costs down as much as possible while still getting the benefits of using a consistent selection process.

When to use a prequalification assessment varies depending on the position you're hiring for and your interview process. In a QSR environment, applicants are generally interviewed on the same day as they complete their application. In this case, it's appropriate to ask your job specific questions right away. However, you'll still need to know a number of things of how the applicant will relate to the team and their customers.

Download a sample QSR assessor here.

In positions that have a longer interview process such as a sales position, a very brief questionnaire focusing on job related behaviors would help you eliminate unsuitable candidates.

The Pros and Cons
The Pros and Cons of using a prequalification tool whether developed in-house or purchased include:

Developing your own questionnaire and resulting report can be difficult unless you have access to a psychologist.

Possible resistance by senior management because franchisors often believe that selling franchises is a numbers game. The more "leads" the franchise sales people talk to, the better the chance of selling a franchise. Instead it is far most cost effective for your sales people to devote their time and your money on selling to qualified leads. Trying to sell to any lead, whether qualified or not, is akin to throwing mud against a wall and seeing what sticks.

The investment required. These days everyone is looking for ways to cut costs. It's natural to look at the short term effects of cutting the cost of a prequalification tool. When looked at from the "40,000 foot" perspective, it becomes apparent that eliminating a prequalification process costs far more.

Not using a prequalification process will cause future pain which will come in the form of increased training expenses, increased turnover and attendant increased recruitment costs and, in the case of franchisors, possible increases in lawsuits, difficulty in selling future franchises, lost royalties to name just a few.

Hoping that the economy turns around before this pain is felt is not a good idea. Consider how long we've been in the current recession. It's already lasted a year or two longer than anyone anticipated. How much longer it will last is anyone's guess. Taking the chance that your business will recover before you feel the pain may not be a good business decision.

Questions to use
Using a structured, formal prescreening tool makes it possible to approach the prescreening process from a more scientific perspective, using the same set of questions, you'll be able to track the progress of the applicants to see how good and bad compare to each other. You'll also be able to run a scientific analysis to refine your selection criteria.

For a list of sample questions you could consider, download "2000-Interview-Questions.pdf" here

The next step up in terms of effectiveness in selecting high performers is the structured interview. In the next post we'll explore the things to look for when developing your own structured interview.