The process of hiring can be difficult, and separating the good from the not-so-good is not always easy, so is it worth considering psychometric testing to screen potential candidates?
People can perform well in an interview but not so well in the job, and false hires can cost some employers thousands of dollars a year in turnover costs.
According to LifeWorks Senior Psychologist Ross Eatt, adding up the costs of recruitment, loss of knowledge, retraining and administration, estimations usually say false hires cost between 12 months and two years of employment.
“If the salary of the position is $120,000 that means every time you get a bad hire, it costs you $120,000 minimum,” he said.
“Personality profiling can be extremely effective in increasing the accuracy of candidate assessment for suitability of a particular role and organisation.
“However, there are many variables involved, so it is not possible to say personality profiling works or doesn't work as a general statement.”
According to Mr Eatt, these variables include the specific assessment devices being used, clarity of selection criteria and their relevant importance, and whether the recruiting organisation seeks follow-up discussion with the analysing psychologist.
According to Acacia Director and Recruitment Specialist Laura Grierson, research shows that multi-measure processes, including psychometric testing, are the most reliable way to predict a candidate’s job performance.
“When I began my career, I rarely saw psychometric profiling used but it’s becoming increasingly common,” she said.
“It does depend on the company and level of the role being recruited for, but it’s widely used across larger corporate businesses in Australia.
“We have had a successful track record using it as part of our recruitment toolkit in executive search for our clients, and I think it has been critical to the high retention rates we have with our appointments.”
What should employers look for in a psychometric test?
While psychometric testing should not be used as a standalone device to assess a candidate’s ability, it can screen two potential employees for the role and provide an understanding of their suitability.
The importance of personality tests in the workplace can vary, so employers should carefully select a test that suits the role of the vacant position based on the industry, level and nature of the role.
Ms Grierson said the key to an effective psychometric test was the existence of an Organisational Psychologist, who was interpreting the data, to ensure the company’s questions could be answered and the information was not assessed based on a computerised system.
“Any suite of testing should contain both aptitude and personality testing,” she said.
“In my experience, the easy-to-use, computer-generated tests provide visually impressive reports but the information is less clear and useful.
“The most beneficial method in my opinion is when a credible Organisational Psychologist interprets the data and provides a tailored report.
“The report can then be used as a springboard to probe further into the insights through interviewing and reference checks.”
How to choose the right personality test
It’s vital the correct assessment device is chosen when considering personality tests in the selection process, as some don't work very well.
Some people equate personality assessment or profiling to the types of behavioural preference questionnaires that are commonly used for understanding individual differences.
“As a general rule, the safest thing to do is take a potential assessment provider and assessment device for a test drive – talk to a provider about specific criteria for a role and/or an organisation then trial it with a range of current staff or incoming candidates,” Mr Eatt said.
“Whether or not it added to the accuracy of the recruiting process should become reasonably clear.
“Note that in some cases, someone who is very smooth and says all the right things during an interview is precisely the sort of person who is better at being interviewed than performing conscientiously on the job.”
Psychometric profiling helps to reduce human bias, which can otherwise impact the selection of a successful candidate and may provide valuable information not available otherwise.
To most accurately test a candidate, it’s important to take the information psychometric tests provide and utilise it when interviewing, checking references and providing job trials.
“Any red flags can be further dissected through discussion with the candidate and referees to establish a rich, full-picture set of candidate data,” Ms Grierson said.
Advantages of personality testing for employment
Mr Eatt said psychometric profiling provided greater confidence that when recruiters either chose or eliminated a candidate that the basis for doing so was as accurate as it could get.
“Effectiveness can differ based on company culture and organisation type, as well as role criteria, but the difference is less if you customise each assessment, analysis and report,” he said.
Some larger companies use psychometric testing as a screening tool, while others use it when a shortlist has been established to decide the best candidate and company fit.
“Both myself and my co-director have also undertaken it for professional development purposes,” Ms Grierson said.
“The overwhelming data to support its use, plus the cost of having to rehire really do make it a no-brainer."
“Not only does testing ensure you pick the right person, it also helps set them up for success in the role."
“You, and your new employee once they receive their results, have a clear understanding of where their strengths and potential blind spots are.
“With this information, you are better equipped than ever to build a great and productive working relationship.”
Disadvantages of using personality tests in the hiring process
There are no specific disadvantages from psychometric tests being used in the hiring process if used correctly, but it may be ineffective if it isn’t used carefully.
“The recruitment process could be negatively impacted if testing is done too early, or if testing rationale isn’t understood or clearly explained to the candidate,” Ms Grierson said.
“It’s a significant investment of time for candidates, so they need to be engaged and on board.”
Mr Eatt said some assessment device providers could be misleading.
“It is unwise to rely purely on the results of personality assessment,” he said.
“The best accuracy comes from comparing and contrasting such indications against those obtained from a person's curriculum vitae, interviews and reference checks.
“If the results are consistent then the more confident you can be, but if there are differences do more digging.”
Making psychometric testing work for you
Employers need to take the time to analyse their workplace and the systems in place in order to customise a test to their company culture, organisation type and role criteria.
“If you just use exactly the same test and generate exactly the same report, the effectiveness would be easier to predict in a big structured company than it would be to predict in a small organisation that’s less well structured,” Mr Eatt said.
Ms Grierson said while psychometric profiling aided employers in making reliable predictions about a candidate’s performance in a specific role, they were just one tool in the recruitment toolkit and should not be relied on in isolation.
“Their power is best harnessed in conjunction with other hiring practices,” she said.