5 Facts Employers Need to Know About Psychometric Testing

By Nick Davis - May. 29, 2017
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Editor’s Note: This is a guest post by Nick Davis – Director and Business Psychologist at Davis Associates. His opinions are his own.
The labor market is currently more candidate-driven than employer-driven. While this appears increasingly true, organizations need to keep in mind that recruitment, at its heart, is about one thing: ensuring business success by selecting the right people. When you consider the time and expense involved in recruitment, finding the right employee for a given position is not a task to be taken lightly.
Whenever we hire an employee, we are making an investment, and we want to ensure the best possible return on that investment. This is a consideration that is likely to become even more pressing as the years go by. Despite a candidate-driven market, 65% of recruiters claim a lack of skilled candidates is their biggest hiring challenge, and almost half of recruiters expect this talent shortage to get worse.
While carefully-tailored, competency-based interview questions certainly play a role in the hiring process, more and more companies are adding psychometric testing to their recruitment assessment processes. There are a number of benefits afforded by objective testing, but there are certainly drawbacks you need to keep in mind if you want your organization to positively gain from their use.

1. Psychometric tests can reduce turnover

Objective psychometric tests are carefully designed to help determine a candidate’s potential strengths, weaknesses, and motivations, thereby eliminating the need to rely on instinctive ‘gut feeling’. When certain assessments, such as cognitive ability tests, are used at the beginning of the recruitment process, you separate the wheat from the chaff, which means you’re only going to be spending valuable time interviewing the best of the best. When personality, motivation and situational judgement assessments are used at the later stages of your recruitment process they can also help you find an ideal match for your given position, which will reduce turnover in the long run.
It takes an average of 28 weeks to train an employee to full productivity, and the cost of high turnover can be much more expensive than you think. On top of the financial costs, high employee turnover can also have a negative impact on staff morale and engagement levels. Companies should aim to minimize turnover by making the right hiring decision in the first place.

2. Psychometric testing can help ensure company fit

Most hiring managers are aware that recruitment isn’t all about aptitude. It’s also about attitude and cultural fit. It is generally understood that when companies hire for cultural fit, employees experience greater job satisfaction, perform better, and are more loyal to the company.
Our understanding of the importance of cultural fit has blossomed over the years, as has our appreciation of authenticity and the role of company values. We want the whole workforce on the same page, and we want our culture and values aligned. Personality profiling can help recruiters assess how well a particular candidate will fit within an organization’s culture. Hiring an individual who is likely to conflict with the rest of the team causes trouble. Though it may be possible to resolve these issues over time, your company would be better served finding someone from the outset who is motivated and inspired in a way that aligns to your company’s values and cultural vision.

3. 80% of the Fortune 500 use of psychometric testing

Over 80% of Fortune 500 companies make use of psychometric testing. While it might be a leap to say that psychometric tests are the key to the success of these businesses, the fact that the majority make use of objective testing certainly supports their usefulness and value. If we strive to replicate the success of larger companies, we too can benefit by examining their recruitment assessment processes and understanding what tools they are using and why.
Though the above statistic is certainly impressive, it should be noted that psychometric testing isn’t the domain of the global conglomerate. Many SMEs make use of psychometric testing in order to enhance their recruitment practices and to save time and money that would be better served propelling their business.

4. Psychometric testing can be used for succession planning

When most companies recruit, they are looking to hire for potential on top of existing skills. You want the best of the best on board; employees who are engaged and driven to succeed. You also want candidates with leadership potential. Psychometric testing can be used to screen for promising leadership traits and qualities. Managers will then be able to use this science-backed data to their advantage when it comes to leadership development and executive assessment for senior roles.
Organizations want their companies to be built on solid ground, and objective data helps provide that foundation. Current managers might think they have a good idea of which employees have what it takes to lead, but instinct can be deceptive. Despite appearances, some top performers might not have it in them, or indeed want to unite and lead a team, whereas some quieter, more introverted individuals might have unexpected potential. If you test for the right qualities, and take advice on the output from an expert business psychologist, your business can secure a successful future.

5. Not all psychometric tools are created equal

Companies should be cautious of what psychometric tools they use, and which companies they hire to carry out certain tests. There are a range of psychometric tests out there, and not all of them are created equal. Some might be perfectly suited to a particular company’s needs, but the same tools might fall short of what you require. Like every other aspect of business life, tests require a great deal of research and consideration. Be wary of companies who are tied into a particular provider or tests that don’t demonstrate significant reliability and validity in their construction. In this case, you might not see the full benefit afforded by objective psychometric testing.

Nick Davis is a Business Psychologist and Director at Davis Associates. Using executive assessment, Nick has helped clients across the globe achieve greater individual, team and organisational performance. He is passionate about the beneficial qualities psychology can have within the workplace.


Nick Davis

Nick Davis is a Business Psychologist and Director at Davis Associates. Using executive assessment, Nick has helped clients across the globe achieve greater individual, team and organisational performance. He is passionate about the beneficial qualities psychology can have within the workplace.

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