Pre-Employment Testing Removes Complexity, Reduces Mistakes

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Pre-Employment Testing Removes Complexity, Reduces Mistakes

Could the author Tom Wolfe have been referring to pre-employment testing when he wrote:

“The idea was to prove…that you were one of the elected and anointed ones who had the right stuff and could move higher and higher and….join the special few at the very top.”

Helping employers make sound hiring decisions is now big business. How did that happen? One reason is that technology has removed much of the complexity in understanding personality.

pre-employment testing reduces hiring risk

Personality, that marker of human behavior, has fascinated great thinkers for a long, long time. More than two millennia ago, in 444 B.C., Empedocles described human behavior in terms of four elements. Shortly thereafter, Hippocrates identified body fluids as the driver of our actions.

Although scientifically inaccurate, these early and interesting observations underscore an inherent need for humans to understand each other. Think of the key to understanding personality as a Holy Grail. Just as Indiana Jones, and countless others, sought to break the Holy Grail code, so have scientists and psychologists labored to find ways to quantify the elusive qualities of human behavior.

It used to be that understanding personality was the link to helping folks through tough times, marital discord, and anti- or asocial behavior. That study now spills over into the business sector as employers try to answer the question: “What makes some people better suited to a particular task than others?”

That blew open the door for pre-employment testing.

Consider the article, Inside the Head of an Applicant published in Newsweek. Its central theme notes the demand for personality tests has skyrocketed. Small business owners, school systems, and the government join major corporations in using personality tests as an interviewing screening tool and to assess employees for internal promotions. The Newsweek article (2005) estimates this type of testing is a $400 million industry.

Today it is on its way to $1 Billion.

Acceptance of personality assessment for pre-employment testing was hardly immediate. Even with the first paper tools launched in the 1950s the journey has seen a lot of ups and downs. Frustrated and exhausted because hiring takes a lot of time, effort, and money, hiring managers have tried everything from handwriting analysis, lie detector tests, and even one-on-one psychological evaluations to improve the outcomes of hiring decisions. When these “alternative” methods didn’t help, many hiring managers just abandoned them. After all, why employ pre-employment testing tools that some human resources professionals describe as no more useful than a daily horoscope?

What has changed now? There are several factors involved.

First let’s start with global competition and a less than stellar economic recovery. Many organizations accelerated the shift to continuously improving productivity. To accomplish this, employers need a streamlined workforce of highly productive — competent, effective and efficient — employees. Employers can ill afford workers who don’t pull their own weight. Besides, it is simply too expensive to hire the wrong people.

There is also the significant increase in the cost of recruitment, Couple that with the real dollar drain of employee quits and involuntary terminations and the costs skyrocket. Hiring the wrong person can cost the company an amount ranging from 20 percent of annual salary to $25,000 or more.  Other studies indicate those dollar amounts can double, triple, or quadruple depending on the level of the position. Based on several executive golden parachutes, there appears to almost be no limit!

Now that we know pre-employment testing can occupy a comfortable niche in an employer’s recruitment and retention tool kit what’s next? Thanks to the Internet, thousands of personality quizzes are available at the click of the mouse. It seems anyone and everyone can suddenly become a hiring expert! How does an employer discriminate between this cornucopia of personality tests?

That’s a great question because not every test offered is valid and reliable. Unless the test screens candidates against criteria related to that employer’s job-related specifications, the chances of hiring the wrong people or rejecting the right ones remains high, not to mention risky. Of course this is no different than a manager asking an illegal interview question or getting blinded by his own conscious bias. Both the interview and pre-employment test must be predictable and job-related otherwise the employer doesn’t have a prayer of success. Removing the bias is proven when using validated pre-employment testing.  Removing human bias isn’t so easy.

The Newsweek article points out a fatal but common flaw in how many organizations use testing. It cites the Myers-Briggs Type Indicator (MBTI) as an assessment used by 89 of the Fortune 100 companies for hiring and promoting employees.

The article failed to mention that MBTI was not designed for employee selection. Even its publisher warns against it.  Of course, many skeptics have jumped on this as a broad brush indictment of pre-employment testing.

To be effective and comply with employment law, pre-employment testing should cover three areas that concern employers – the applicant’s job fit for skills, the team, and the culture.

The Newsweek article suggests a more predictive generation of pre-employment testing is now on the market. That’s absolutely true. At SPS, we recommend 3 different systems:

All of them are based on the Big Five Personality Model, which is designed to measure traits of normal functioning personalities. This is an important component for employers who want to comply with right to privacy and Americans with Disabilities acts. We recommend the five-factor pre-employment testing because the system was constructed and validated with job fit in mind. Our pre-hire testing software is as accurate and valid for predicting job fit as our competitors but exceeds employer expectations for the ease of administration, real-time turnaround and publication of easy-to-read job fit reports. As a bonus, each report includes recommended behavioral interview questions which are delivered to the hiring manager. These interview questions are customized for each candidate. With minimal training, a hiring manager or small business owner can assess a candidate and make predictable hiring decisions without employing a psychologist or relying on gut instinct.

Does this latest generation of personality tests work? SPS clients using pre-employment testing like PeopleClues, ASSESS, and Prevue have experienced fewer hiring mistakes, lower recruitment costs, higher productivity, and larger profits.

If spending less time hiring and fixing performance issues is on your 2017 to do list, contact us now or call 800-803-4303.

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