Today’s hiring process has grown increasingly complex. Considering that a bad hire is arguably the greatest hidden cost to an organisation, it’s easy to understand why.
For a non-executive role in Australia, the cost-impact of a wrong hire ranges between 30-150% of the job’s annual salary. This represents expenses attributed to re-hiring, expended manager time, training investment, training of a replacement and opportunity cost. Furthermore, should legal snags arise; this percentage grows even more alarming.
Certainly, with each failed appointment, a chunk of profit heads out the door along with that person.
For this reason, many organisations are adopting increasingly thorough assessment processes before placing a candidate in a role. This holds particularly true when it comes to middle management and senior positions.
In seeking to reduce the risk of a bad hire, psychometric testing has become rather commonplace in the hiring process with many organisations adopting them as a routine addition to their recruitment process.
A psychometric assessment usually involves the candidate responding to a series of questions and cognitive exercises, which assess ability across a range of mental functions, as well as his or her behaviour bias and work style preferences.
Curious to find out how employers really feel about psychometric testing, we set about interviewing several senior human resources professionals who actively engage in hiring and human capital management processes on a day-to-day basis. Those interviewed keenly observe all angles of the subject in application, so who better to ask?
Perspectives expressed had slight variances in each case; however, there was surprising consensus on the nature of advantages and disadvantage.
Employers expressed that when utilised in a measured way – as part of a comprehensive hiring process, psychometric testing offers significant value. Particularly when it comes to finding a candidate that aligns with a company’s values and fits a team culture.
Even within existing workplace teams, collectively completing a simplified psychometric assessment, were believed to be very helpful. The observation was that when colleagues understand their differences and the areas where they complement each other, this can help drive better productivity.
Psychometric testing is regarded as a particularly useful tool when sourcing talent for middle and senior management positions. This is also the case for ‘high-touch’ roles such as sales and business development.
When two shortlisted candidates are match-for-match on criteria, capability and experience – a psychometric can give a helpful indication of soft skills, behavioural drivers and instinctive work style. These factors can have a far-reaching impact on human interactions inside and outside the business, and can be costly if ignored.
A further area where employers believe psychometric testing adds value is in giving an indication of a candidate’s overall ability, opportunities for development, and their potential for advancement and promotion.
Several hirers pointed out the risk that if a psychometric test is administered incorrectly, or considered in isolation, without balancing the other elements of the recruitment process, that problems with its use would be sure to surface. Also pointed is the importance of assessing a candidate’s results in concert with the psychometric profile of other people in a team.
Another risk worth remembering, is that on ‘test day’ things can go wrong. If assessment conditions are poor, or if a candidate is in a less than optimal emotional or mental state, it can affect the result. The fallout being that an otherwise fantastic candidate brimming with potential could receive a mark against them for promotion down the line.
One employer expressed how in administering these assessments, common-sense needs to prevail. If the role in question is a relatively simple one, there is slim need to assess someone past the level required. Furthermore, if the same assessment is given to all persons regardless of role and function, then this is not of much use either.
“There is always a flipside too, and the disadvantage is to read it in isolation and make a judgement of it or approach it with some sort of bias,” adds Tonya Miller – a HR Manager with over 20 years’ experience in all multi-disciplinary aspects of Human Resources solutions.
A further word of caution to organisations is to be vigilant about having the right people staffing the HR team.
If the practice is one where a good candidate is put through a poorly managed process, and made to feel like a number with scant communication either before or after psychometric testing – that employer could find the story of that candidate’s bad experience filtering through the marketplace.
Overall findings are that employers are in agreement that psychometric testing is a highly valuable tool when used wisely to support and consolidate the hiring process, though at no point should it be elevated to that of a central, decision-driving mechanism.
So what does this all mean?
- Tools need to be relevant – Those involved in hiring need to ensure psychometric assessment tools are kept job-relevant and are well validated. This will also help ensure legal compliance with anti-discrimination legislation.
- Define the role – Know your business needs in respect of the specific parameters of the role you are recruiting for. If you plan to have candidates complete a psychometric assessment, it’s important beforehand to thoroughly quantify what is required for them to be successful in that role.
- Communicate with candidates – Be sure to take the time to communicate thoroughly with candidates in the lead up to, and following, a psychometric test.
- Give post testing feedback – Feedback is important, it adds value to the process and is a very good way to help validate results. Furthermore, it is a professional courtesy that displays respect to a candidate, prevents confusion, minimises potential bad feelings. Regardless of outcome, giving feedback will complete the process on a high note.
Project Human Resources, carry out psychometric testing. If you have any questions regarding types of tests or best process for administration don’t hesitate to call them.