Getting it right the first time: The value of psychometric testing in the hiring process

It all starts with your people. The attraction, development and retention of the right people are the foundations of not only a strong culture but in delivering excellent results on organisational strategy.

It sounds simple, yet the challenge of improving retention rates, hiring the right people in the right job at the right time, all while delivering bottom-line results is harder than it sounds.

80% of turnover is due to mistakes made during the employee selection process and replacing an employee can cost up to 150% of their annual salary. What is more, the wrong employee in a role can lead to low productivity, something which costs organisations over 350 Billion per year. A study by ADP put the cost of each disengaged employee at $2,246 per year.

Taking the guess-work out of talent acquisition and development

‘Psychometrics’ literally means mental measurement, and psychometric tests are measurement devices. The measurement is used to gain a deep understanding of an individual to better predict behaviour and provide a basis for future action. They can reduce turnover by rates as much as 70% and improve employee fit (Wagner, 2000). In other words, they take the hunch out of hiring.

Assessments are a strategic initiative for selection and development. At Maximus, we believe that a strong foundation in organisational psychology that includes psychologists accredited in a broad range of leadership and personality instruments is key to making the hiring process accurate and valid.

What can you measure with psychometric assessments?

You can measure many traits with psychometric assessments. Harvard Business Review reports that roughly 18% of companies currently select utilising personality tests in the hiring process. According to a survey by SHRM, that number is growing at a rate of 10-15% each year. When personality tests are used in conjunction to cognitive ability tests, they greatly reduce the chances of selecting an employee who does not have the right knowledge, skills and abilities for a position. An organisation must have the ability to effectively measure job performance for psychometric testing to make the largest impact during the hiring process. If you are not able to measure performance against specific job tasks, the ROI of psychometric testing investment is difficult to see.

Why share testing results with candidates?

Sharing testing results with candidates, whether they are chosen for the position or not, is a wonderful development opportunity for them. Having a debrief with an organisational psychologist allows a candidate to understand their current status, their strengths, development points and what they can improve upon for their next job interview. At Maximus, we always give our clients’ hiring candidates a thorough debrief to assist them in developing to their maximum potential.

The evidence-based approach to hiring with psychometric testing has gained popularity in the past few years because of the proven ROI. It’s much easier to invest in testing, have an organisational psychologist properly interpret the results and hire the right candidate than wasting time on training and developing an employee who is, in the end, not ideal for the job.

About the author:

VGVanessa Gavan, Founder and Managing Director of Maximus International, is an insightful and experienced organisational development consultant with a passion for developing and transforming organisations through their people. For over 15 years, Vanessa has consulted to an impressive range of leading Australian and international organisations to enhance business strategies, improve executive and leadership capability, redesign organisation structures, and deliver business-wide performance solutions.

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