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It is not always clear why businesses should use assessments and all the benefits a company can get out of assessment results. Testing is a specialised role, which forms a crucial part of the larger HR objective – although testing professionals and HR personnel do not always see the bigger picture, possibilities or potential symbiotic relationship. Below are 8 reasons why businesses should use psychometrics.
In the modern age, decisions need to be backed up by informed data – and psychometric testing contributes the key elements of science and objectivity. In South Africa, there are the additional Employment Equity Act requirements that hiring procedures are valid and fair – which psychometrics, with valid and researched tests, offers.
It can cost over 200% of the person’s salary to replace a skilled position. Businesses are becoming more aware of the consequences of making the wrong choice when hiring. Meta-analytical studies have shown that psychometrics can improve recruitment outcomes by up to 24% (over purely subjective methods such as interviews and resume-screening).
Quantifying human behaviour – of both incumbent employees and prospective candidates – is a massive challenge facing organisations. Pre-employment assessments are one of the most affordable and most effective ways companies can ensure maximum return on investment. Quantifying the results of HR initiatives demonstrates that HR is a critical business function.
There has been a lot of criticism against 360 degree questionnaires and the evaluation of people’s skills. 360 questionnaires have been shown to be a more accurate indication of the assessor than the person assessed. An interesting study and initiative by Deloitte can be found here.
Psychology professionals are becoming aware of the benefits of writing reports in behavioural terms or examples of behaviour in everyday, real world language. This is making reports more easily understood by test-takers and managers – and therefore the reports are becoming more versatile. Graphics that simplify the complicated concepts are also an exciting development.
Using psychometric tests can create a powerful first impression (Richman-Hirsch, Olson-Buchanan, & Drasgow, 2000; Sinar, Reynolds, & Paquet, 2003). Applicants cite the objective and standardised process as a key reason for their satisfaction. This is especially true for applicants from culturally and linguistically diverse groups (when culturally fair tests are used). It sends a clear message that the company invests effort to get the right people into the right job through the right process.
Quality data – which can be difficult to get – provides clarity on what employee initiatives work and which ones do not. When difficult company-wide decisions need to be made, psychometrics can provide clarity to an otherwise unclear situation.
Psychometrics assists with the HR strategic initiatives of selection, talent management, assessing workforce capability, employee engagement, understanding the organisational culture and effective succession planning.
Psychometric testing has long been an essential part of modern best practice recruitment. Companies that want to attract and retain the best talent achieve this using psychometrics. More than 75% of Fortune 500 companies use psychometrics in recruitment.
Once a selection is made, the psychometric results can be put to further use. The knowledge gained of the person can direct development programmes. Also knowing who your employees are helps knowing what they want from the company, how to motivate them and how to get them to work towards their strengths. It also informs what training and development initiatives need to be taken.
To conclude, psychometrics for selection, development and a variety of other HR functions is a growing trend that is turning into a critical business function. While companies strive to be more efficient in an age of information, gaining the right information quickly has become more critical.