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Psychometric Assessments – Do you need them in your Selection Process?

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In the US, 80% of Fortune 500 companies use psychometric assessments in their selection process. In the UK 75% of the Times Top 100 companies do the same.

In Australia, psychometric testing is also becoming increasingly popular and gaining clout in selection processes. Some major companies use the results as “deal breakers”, refusing to consider a candidate if their psychometric profile reveals doubt about their suitability for the role.

But do these tests hold enough validity to predict future performance and destroy career opportunities, or are they simply a useful tool in the selection process as part of the bigger and more complex picture?

The Argument for Psychometric Assessments

There are over 3,000 psychometric assessments available on the market. Most of these are personality assessments, designed to measure a wide range of attributes like interpersonal relationship preferences, sales and leadership ability, thinking style, energy, emotions and preference for tasks.

When you’re on the hunt for exceptional candidates you’re essentially searching for three things – skills, knowledge and talent.

During the interview process, the latter can be extremely difficult to both identify and assess, especially when hiring entry-level candidates. By their nature, entry level candidates have short and shallow resumes that do not provide the same level of insight and discussion points as their more experienced colleagues.

For an interviewer this can make the interview process subjective and hard to measure and psychometric assessments can be a very useful tool. They can provide an objective basis for discussion and a platform for deeper questioning and understanding – especially if the assessment contradicts earlier predictions or expectations.

After all, hiring someone with the wrong cultural “fit” in an organisation can be an expensive mistake.

The Evidence

When it comes to the potential impact of a misaligned profile on performance of an individual what real-world evidence is there?

  • Hogan Assessment Systems claim there is a strong correlation between personality assessments and job performance.  They found that screening candidates with their personality assessment tool was shown to reduce turnover, improve productivity, and increase financial sales.
  • In a major Telco, candidates who fitted the right profile were two times more likely to receive high ratings for customer focus and overall performance; conversely, 38% of candidates who did not meet the profile soon left the company. A study undertaken by Harvard Business Review followed 360,000 people through their sales career to determine what factors made success in sales positions more likely. The study found that hiring decisions based on experience, age, technical skills and qualifications alone were unsuccessful in identifying sales talent with the ability to excel in their role.

The successful strategy? Hiring candidates by matching their core abilities, natural talents, interest in the position and their personality fit to the organization and the role. When this strategy was used, the candidates hired increased sales productivity dramatically and reduced turnover as much as five times more than their unsuccessful, poorly hired counterparts.

The Rookie Experience

We work with a particular company, which knows exactly the type of person they want based on previous profiling and performance metrics.

This business uses personality and behavioural profiling to not only find out if they will suit the role they’ve applied for, but also suit the way the team works and the management style they’ll be working under.

Interestingly, if they interview someone they really like whose profile is not a perfect fit, they don’t reject the application immediately; they will consider the candidate’s profile and then look at the challenges of hiring and managing a candidate like them; then they weigh up whether the pros (a candidate’s areas of strength not seen in other team members) are likely to outweigh the cons (likely risk of disruption and conflict), before making a hiring decision.

If a profile comes up misaligned, the company will outline their concerns to the candidate, and discuss whether their implied suitability will hinder a successful partnership.

From our experience, this system means that the two parties go into the employment agreement with their eyes wide open, and the chance of surprises down the track is limited, as there are expectations that are proactively managed against.

This strategy has been hugely successful for this business, and the General Manager believes they are a true predictor of future performance and team “fit”. Profiling continues to form the foundation of their selection process for all members of staff – not just senior, technical or sales roles.

The Legal Position

Interestingly, the most frequently stated reason for using personality testing in recruitment is to provide a selection process which can withstand legal challenges.

This is because of the standardised way a personality assessment is administered; some companies say personality tests can reduce bias and discrimination – and emotional attachment – in the selection process by providing an objective element to screening candidates.

This can be utilised positively in your search for entry-level candidates as a way of bench marking the traits you’ve identified as a good fit for the role.

The Dangers of Psychometric Testing

A note of caution: if hiring managers do not understand psychometric reporting, assessments are at risk of being misinterpreted and the data used in the wrong way, in both selecting candidates and developing them.

Research shows that in certain companies, personality assessments have been used to assess a candidate’s suitability for promotion, sometimes hindering a candidate’s progression.

If you don’t know exactly what you’re looking for, seek the advice of professionals like Thomas International or Hogan who can help you determine what will work best in your team. That way, if you have any questions about the report, experts can help interpret the information and weigh up the opportunity cost of hiring a candidate who doesn’t display the characteristics you were originally targeting

The Verdict

Personality and behavioural profiles are no longer pseudo-science – they are exceptionally useful and underutilised tools, whether you are searching for your next career starter or your next executive.

The statistics speak for themselves – not only can assessments help predict and determine future performance; they can also increase productivity and retention rates in your business, making their initial cost a well-calculated and hugely beneficial investment.

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