Assessment testing of employees and candidates is an effective way to identify talent. But fail to take a systematic approach and you will fail to maximize the return on your investment >> Fact: some people are more talented than others. You can spend time and money teaching someone to excel at a certain task or job, but if you get the right person in the right role in the first place they are likely to perform better. As the saying goes, why teach a turkey to climb a tree when you can find a squirrel? The research makes the case: for jobs of average complexity, the top one per cent of employees are 12 times more productive than the bottom one per cent (Hunter, Schmidt and Judiesch, 1990). With this level of return at stake, making the right decisions about the people you hire is critical. But this means predicting performance – is this possible? Or, more importantly, is it possible to predict performance quickly and cost effectively?
Unstructured interviews, CVs and references tell us very little about whether someone will excel. Simulation exercises, such as case studies and role plays, are much more effective. But these can be time consuming and expensive. The best way to get return on your assessment budget is to use psychometric assessment techniques. These provide objective and standardized measures of a person’s ability and personality at work which, in turn, provide an insight into how that person is likely to perform in a particular role. As figure 1 shows personality and ability tests are a particularly cost effective way of predicting performance.
Assessment: getting the return on your investment
Cost/hire (£)
Figure 1: The diagram based on research by Schmidt and Hunter (1998), shows that personality questionnaires and ability tests are the most effective way to predict performance whilst keeping costs in check
300
Assessment centers
Competency-based interview
150
Unstructured interview
Personality questionnaire Ability tests
References
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15
30 Prediction of performance as a percentage
Predicting performance is a science and to get it right you need to treat it as such. So here are five tips to developing an assessment process that will optimize your hiring process. Tip one
Tip two
Choose valid and accurate assessments
Be clear what you are looking for (and what you are not)
Picking the cheapest assessment is tempting when faced with a tight budget. But poorly developed assessments that don’t predict outcomes are a false economy: they may appear cost effective but the business benefits will never be delivered. Ask your supplier to prove the predictive ability of their assessments with examples of where it has worked in the past. And then measure the results for yourself.
Profiling the competencies you need in the role or level for which you are recruiting will help you decide on the most appropriate mix of assessment techniques. You can match these competencies against the specific personality traits measured in your psychometric assessment. This will be made easier if your tool has been created with common competencies in mind.
Assessment: getting the return on your investment
Tip three Use the right assessments at the right time This can drive huge savings, particularly in large recruitment processes. The key is to ensure that the assessments you use at the beginning of the process, when candidate numbers are high, are valid and easy to administer. This enables you to confidently sift out a large number of unsuitable candidates and save places at your more expensive assessment centers for the most talented.
Figure 2 is a real example of how a banking organization remodeled their recruitment process to save over $1.7m. By introducing Talent Q ability and personality assessments they improved the accuracy of their screening stages and took fewer candidates to the expensive interview stage.
Figure 2: Highlighting the cost savings in the recruitment process when introducing ability and personality tests
