Pre-Hire Assessments: Secret Weapon of Best-in-Class Companies
More and more companies are turning to pre-hire assessments for hiring help. One reason might be that the cost of hiring mistakes has sky-rocketed. Estimates can rise to as much as five times a bad hire’s annual salary, according to Society of Human Resources Management.
Whether a termination is involuntary or voluntary or due to bad attitude or poor performance, it’s too expensive to tolerate or ignore anymore. As part of a solution, many companies now utilize pre-employment tests for selection, as well personality and competency assessments for development. These instruments add objectivity to what they know is a vulnerable and subjective talent-management process. For sure these assessments reduce bias but more importantly they add numerous reliable and data points at a time when predictive analytics is no longer a management option.
But you don’t have to just take my word. A white paper published recently by Aberdeen Group revealed some impressive proof about how pre-employment and career testing is a game changer for the future success of any company.
Let’s start with a reality check: According to Aberdeen’s 2015 Hiring Success Management paper, 79 percent of companies indicate that there is a shortage of critical talent available. They note that “even after companies do find their ideal candidates, it’s more important than ever to be sure that said applicants are the best fit possible.”
That is how pre-hire assessments can lend a big hand. They help employers understand a candidate’s skill sets, vulnerabilities, and ideal working environment. They help assess personality compatibility on teams and company values fit. They also provide extensive insight into the best ways to develop and motivate employee once they are on-board. There is no single silver bullet for determining strengths or concerns or for reducing potential poor performance but pre-employment tests certainly offers a compelling competitive advantage over the alternatives.
Best-in-class organizations are 45 percent more likely to use pre-hire assessments. That’s impressive considering that all companies are using assessments more often. Across the board management is frustrated relying on gut instinct and ineffective interviews to make critical hiring decisions. They want reputable and predictive data to assess candidates. According to Aberdeen, “pre hire assessments are the bees knees and the best-in-class know it, too.”
Part of the reason for increased acceptance of pre employment tests is that science behind them is more robust, more sophisticated, and more convenient to use. All companies – large and small – can get better hiring results conveniently at a lower cost per candidate. The ROI has skyrocketed. Not only do companies see a higher year over year improvement of key recruiting metrics – time to hire and cost per hire, but hiring managers are 35 percent more likely to be satisfied with their new hires.
More evidence that pre-hire assessments are an asset few companies can ignore include:
- Best in Class companies use of pre-hire assessments has increased 13 percent since 2014.
- Best in Class companies are 2.1 times more likely to have definitions for success of top performers.
- Best in Class companies are 2 times more likely to determine if candidates are a good cultural fit.
Pre-hire assessments can be a huge win for companies these days considering the extraordinary risk management assumes when a hiring mistake is made.