Whether you are considering pre-employment tests for hiring, or already use them in your hiring process, it is wise to be aware of the risks associated with using them.
First, though, we’ll cover a few benefits of pre-employment testing to balance the scale.
The costs of a bad hire are high. The US Department of Labor says employers can estimate the cost of a bad hire to be about 30% of the individual’s first year earnings.
What does that mean? For an entry-level, full-time employee earning $30,000 in their first year, that puts the cost of a bad hire at around $9,000.
If you hire a corporate manager or executive in the range of $70,000 per year, and if the USDL’s estimate is close to accurate, it would cost a company about $20,000.
To help make better hiring decisions, some employers use pre-employment tests to get a more complete picture of job applicants and their potential to perform in their prospective role. These tests include:
- Cognitive tests – measure reasoning, memory, perceptual speed and accuracy, math skills, reading comprehension and/or job knowledge.
- Physical agility tests – measure candidates’ strength and stamina by asking them to perform actual or simulated job tasks. For example, moving a 50-pound package or piece of equipment.
- Personality tests – measure the degree to which a person has certain traits or dispositions—dependability or cooperativeness, for example.
- Job simulations / skills tests – assess performance and aptitude on particular tasks, such as testing how many words per minute an administrative assistant can type.
To continue reaping the benefits that pre-employment testing can bring to your company, make sure to be aware and avoid the risks. Below are 3 risks that every employer faces when using pre-employment testing as part of the hiring process.
Risk 1: Discrimination
Your pre-employment testing must comply with federal, state, and local nondiscrimination laws. This means you cannot design or use the tests to discriminate against candidates based on protected characteristics such as race, color, religion, sex, national origin, disability, or age.
- Be consistent. All candidates with similar situations should be subject to the same tests. For example, if physical agility is central to the job, you should test both male and female candidates applying for the position.
- Assess impact. Employment tests should be job-related and consistent with business necessity, and should not exclude applicants in a protected class. If your process screens out a certain group, see if there is a test that predicts job performance without excluding the protected class.
- Validate tests. Before using pre-employment tests, it is best to validate the tests for the positions and purposes for which you plan to use them. For reference, see the Uniform Guidelines on Employee Selection Procedures for information on validating tests. Review tests when job requirements change.
Risk 2: Accessibility (or Lack Thereof)
Under the Americans with Disabilities Act and similar state laws, candidates with a documented disability may require an accommodation during pre-employment testing so they have an equal chance to be considered for a job.
For example, a qualified individual with a sight-related disability may need to take a written pre-employment test in a different format, such as in large print, or they might need a reader to have the same opportunity as other candidates.
To this end, establish legally vetted methods that allow candidates to make these requirements known in advance of testing that do not violate hiring laws. Further, develop a plan for how you will accommodate and meet the accessibility needs of candidates.
Risk 3: Poorly Designed Pre-Employment Tests
Just as you must use caution when designing or selecting pre-employment tests to make sure your test content does not discriminate against candidates with protected characteristics, you also need to be sure your pre-hire screening tool is well-matched to the job you seek to fill and does not contain unnecessary or intrusive content.
If you use personality tests, for instance, determine the behaviors necessary for the job and design or select a test that can accurately measure candidates in those areas. In general, personality tests from companies like Resource Associates are both reliable and valid, and do not cause adverse impact to any protected population.
There are tests on the market containing content that, by design, identifies a candidate’s medical condition as a means of determining their suitability for a position, such as mental illness. If using these tests, they are subject to the ADA’s medical exam restrictions. You must wait until after you have extended a conditional offer of employment before administering such tests. Keep in mind your duty to keep the test results confidential.
It is also your duty to vet tests to make sure they are not poorly designed, inadvertently leading candidates to disclose protected information. Even if you are not aware of these disclosures, you could be in violation of ADA laws. Always review test content before administering any pre-employment test.
Some states prohibit or restrict employers from using honesty and integrity tests when making hiring decisions. Under federal and state laws, most employers cannot subject candidates to a polygraph test, for instance. State laws may also prohibit certain questions on privacy grounds.
Until Next Time…
Be careful when you design or select pre-employment tests and understand the risks. Never find something online and use it in your hiring process without first evaluating its content, and determining whether it is right for your company and for the job for which you are hiring. Be sure to consult legal counsel prior to engaging in pre-employment testing.
Disclaimer: The content of this article does not constitute legal advice. Resource Associates reminds you to consult your legal counsel prior to engaging in any employee screening practices to ensure compliance.
