Psychometric Testing And The War For Talent

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02-12-2013

5 min read

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Hiring the best employees at a reasonable cost in today’s human resources (HR) world can be a daunting task. Selection tools and services are plentiful and differentiating between the different methods available, understanding the benefits as well as the costs associated with each is an extremely complex task.

When does psychometric testing provide value?

In the last decade there has been a dynamic shift of power from the employer towards the candidate with ever increasing competition for talent amongst the employers.

Candidates now expect and demand consistent, objective, and speedy recruitment processes. As employers, we face the task of providing those consistent, objective, and speedy processes.

Online assessments can help not only to improve candidate experience but also save us cost while doing so.

While the “war for talent” is raging on the recruitment front, internally, many companies are struggling to retain their existing staff, especially their star employees. It is therefore important to find the right match of company and employee, to meet this challenge in particular.

>>Centralised Hiring Strategy

Online diagnostics are often used when recruitment strategies are designed centrally but executed locally. With the help of online assessments, it is easier to set and implement specific selection standards and thus ensure consistency across its selection policies.

In other words, it allows an organisation to control the process centrally while allowing local departments to act autonomously. This in turn simplifies structures, saves resources and accelerates decision-making.

>>Speediness

When faced with large numbers of applications, such as is often the case in graduate campaigns and/or scholarship drives, online diagnostics play an especially important and resource saving role.

The tools act as filters that will screen-in potential at earlier stages of application and differentiate talent towards the sharper end of the recruitment funnel, thus speeding up the process significantly.

Equally, when dealing with small pools of suitable applicants, competition for these candidates can be high, requiring companies to act quickly.

Online assessments help identify the good ones fast and reliably, and help recruiters to decide who to focus their time on.

>>Objectivity

Psychometric assessments and their results are completely independent of the investigator or the administrator. This is achieved through the standardisation of the administration, of the scoring and of the interpretation of results.

This creates a fair process for the candidate and ensures that a candidate is selected based on his or her ability to perform successfully in the job.

>>Retention

Online diagnostics match the characteristics of a particular occupation to those of a candidate and can therefore link candidate and employer together seamlessly.

Employees that are in roles they find fulfilling and are suited to, are more likely to stay on in their positions and be engaged to their work.

Engaged workers in turn are found to produce three times more than their unengaged counterparts.

For the organisation, developing an informed selection, promotion and development process can thus boost employee performance and reduce staff turnover.

Characteristics of good assessment tools

Knowing where online assessments provide the most value is important but knowing what sets tests apart from each other as well as from other assessment methods is equally as important. Reliability, validity and cost provide the basis for any comparison.

>>Reliability

Reliability refers to the extent to which diagnostic instruments show consistent results across repeated applications. While there are no completely reliable instruments or methods, a reliability value of 0.7 should be the minimum the instrument has. In the case of questionnaires, the ideal value lies between 0.75 and 0.85; for ability it is between 0.8 and 0.9.

>> Validity

Validity is the statement of how far the test measures what it is designed to measure. A valid intelligence for example provides a way to measure the intelligence of a person and therefore allows a prediction of performance in situations where intelligence is important. The minimum validity value an instrument should hold, to be considered useful is 0.3.

>> Cost

The diagram above highlights the trade-off between cost and validity. In the top right corner, you find probation as an assessment method which provides the highest validity score. However, it is also the most expensive way of assessing someone.

Ability tests on the other hand are both valid and cost efficient. Therefore if cost is a factor in your considerations, the logical choice lies to the left with high scores of validity preferred.

Frequently Asked Questions

Having worked in the industry for over a decade now, I have come across many questions and myths surrounding online diagnostics that keep on coming up and I hope I can help address them below.

Will a high investment of time and resources be required to introduce testing into our recruitment process?

Most reputable tests are web based and easy to use. This reduces time demands on the HR team. Managed services are also available. The differences lie in the technology and security each tool uses to deploy their method with.

Is it possible for a candidate to cheat?

When using psychometrics, one must understand that these are self-assessments and that there is a global cheat rate. As such, there are tools out there that implement technology that significantly reduces the cheating elements.

We recruit large numbers of people and are worried about the size of investment needed.

Using the right online based tool to assess large numbers of people is easy and cost effective. These tools will free up HR resources to focus on areas such as candidate experience throughout the process.

Through a better role fit, retention rates are also being improved. Important note: In order to get a good outcome, organisations must balance the cost vs quality elements. As the saying goes, “If you throw peanuts, you get monkeys”.

Testing, as an additional step in the recruitment process adds time to complete on the candidate’s side. Does that negatively affect candidate experience and my employer brand in turn?

While testing adds an extra step to the recruitment process, candidates understand that this is best practice and there is a reasoning behind it.

Psychometric testing is a valid and objective method of assessing candidates and ensuring a level playing field.

At the same time, it is important to strategise testing so as not to burden your process. Speak to a good consultant who can help you design a process that will work for you. This is a very important step as no two companies are alike.

I am worried that the particular tests offered are not relevant to my organisation or industry.

All reputable psychometric tool providers strive to ensure high face validity across all their tests and offer full bespoke tests, for example. Some even offer different industry specific versions of numerical and verbal tests, as part of their standard offering.

Sharma KSK Lachu is the managing partner at cut-e Malaysia, one of the worlds leading psychometric tools and consulting organisations. He has over 12 years of working experience, implementing talent measurement tools and designing recruitment and development solutions for clients in Australia, the UK, the United States and in Asia. For more information on these tools, contact people@leaderonomics.com . Click here for more articles.
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