What can organizations do to improve their recruiting processes and select the best talent? A few quick-hit improvements include:
- Stepping up the job description and requirements shown on job boards
- Improving interview techniques
- Strengthening the screening process by identifying specific behavioral characteristics that correlate to better on-the-job performance for the role they need to fill.
In the Society for Human Resource Management (SHRM) study “The New Talent Landscape: Recruiting Difficulty and Skills Shortages,”68% of respondents indicated that they are experiencing challenging recruiting conditions. There are a number of benefits to pre-employment testing that address those challenges; some of them obvious, others more subtle.
Here, we discuss specific advantages of adding pre-employment tests to your hiring toolkit.
Advantage #1: Finding a Good Fit for Both Parties
To help determine whether a candidate is a good fit for you – and conversely, you for them – employers need to collect data on both the candidate and the job they seek to fill. One way is to use personality assessments designed for the workplace. Using this kind of personality assessment during the application process can help employers better understand the lens through which a candidate sees the world of work, their likely reactions to new work experiences, and their approaches to work environments like the one the company offers.
Just as they would formulate a checklist of skills an applicant needs to have for a job, employers should also develop a behavioral profile that predicts performance in a specific position.
For example, if there is an open sales position which will require a great deal of relationship building and communication, it may be smart to hire someone who scores higher on extraversion and assertiveness. Utilizing the current sales team’s own extraversion scores and performance data, employers can set a benchmark against which to measure candidates.
Pre-employment tests also allow employers to match their hires with the company’s culture and goals. Good fits often equal better production. Employees who have the right skill and personality trait mix will mesh well with the company, transition to their new job quickly and begin contributing to the company’s success.
Advantage #2: Reduced Turnover
In addition to fitting in right away and quickly becoming productive, well-matched employees tend to have longer tenures. Companies that experience high turnover rates end up spending money on the constant challenge of finding productive, well-suited employees rather than benefitting from the added production of a good hire. One study puts the cost of replacing an entry-level employee at about 16% of their annual salary. The percentage increases as the pay scale rises.
An employee who has the aptitude and personality for a job generally is less likely to leave. By hiring the right people for a position the first time, you save money on hiring and training costs. Lower turnover can also positively affect morale and company reputation, making a business more attractive to applicants.
In an article in Business Insider, Zappos CEO Tony Hsieh says that bad hires have cost his company “well over $100 million.” Arte Nathan, former CHRO for the Wynn Las Vegas, points out in a SHRM article that bad hires affect the entire organization. “Most companies don’t know the full cost of the turnover, so they don’t apply the resources upfront to avoid it. If you make a bad hire, there is a ripple effect among all who work for you, your product, and your product quality.”
Advantage #3: Efficient Hiring
The time employers spend sifting through resumes, phone screening, interviewing, and collecting feedback costs money by engaging managers in activities not directly related to the company’s productivity. The internet has made it easier for applicants to apply to more positions in less time, increasing the number of applicants you get for each job posting but not necessarily increasing the quality. Using pre-employment tests can streamline an employer’s hiring process, particularly when used early in the process. With this approach, employers can prioritize the candidates likely to be the best fit.
Advantage #4: Legal Protection
The same federal guidelines that govern the use of any other hiring selection method—including resumes and interviews—also apply to pre-employment tests. According to these guidelines, pre-employment tests are legal to use as long as the tests are job-related. Beyond that, tests can also provide an additional layer of protection for employers because they provide companies with objective, scientifically-validated predictors of success in a job, as opposed to subjective hiring criteria. That means pre-employment testing can allow employers to be better prepared to defend their hiring procedures in the case of a legal challenge.
Simply using pre-employment testing will not prevent employers from ever making a bad hire again, but testing can provide a way to reduce the overall risk an organization faces each time they hire someone. Pre-employment tests provide a data-driven way to mitigate risk because .