A Business Case for the Use of Assessment Tools in Talent Management

Assessment Tools (aka psychometric assessments) are growing in popularity among businesses worldwide for talent management, as well as by individuals for personal professional development and career planning. A scientifically proven instrument can be of significant value for matching the right person to the right job, for identifying areas of strength in professional skillsets and for professional development by organizations and individuals seeking guidance in their own development.

It has been estimated that more than 20 million assessments have been used by employers in Canada to assist in the hiring process, succession planning, training and development of employees. Organizations who use assessment tools claim to receive the economic benefits in areas such as improved hiring success rates, reduction in employee turnover, increased employee productivity and strengthening of overall corporate culture. The key is selecting the correct tool with the right intentions. All too often, we hear of organizations not using the best assessment to achieve the results they desire.

Why is the use of assessment tools to augment the selection/screening process becoming increasingly more appropriate?

Four 21st century reasons

  • Assessments

    Job applicants are becoming progressively more skilled in the interview process
  • A shortage of qualified applicants continues to hamper efforts to find the right skill set among job applicants
  • Ongoing business pressure hinder the availability of hiring managers to interview candidates in a timely manner
  • Getting valid reference information is increasingly more difficult to obtain.

There is an old adage; “people are hired on skills and fired on fit.” Skills testing assures the candidate actually has the knowledge required for a position, while job fit testing provides information on whether the candidate will be comfortable addressing the demands of the position in terms of things like ability to assimilate new information quickly, conscientiousness, interest in working with people, capacity to deal with stress, etc.

Does this sound familiar?  After an extensive search for your manager, finally one candidate stands out. They appear to have the right qualifications and the relevant work experience, and they also said all the right things during the interview and presented themselves very well. The hiring manager gives the “all clear” to make an offer and you hire. Whew!

Then, not three months later, the hiring manager calls raising questions.  You hear concerns about things such as relationships with peers, or the team appears irritated or perhaps morale has dropped and productivity is below expectations. Upon further review and after speaking with a few key team members, you realize there is a disconnect, a mismatch. Your new hire is not a good fit and the time and cost in rectifying the situation is expediential.

Cost-to-hire data is generally collected by larger companies that have a recruiting department or by recruiting firms. I’m sure you’ve had some experience dealing with these. Where I try to get organizations to focus is more on the cost of turnover. In other words, what is the cost of a bad hire? What is fairly well-known is the cost to replace a bad hire. The harsh truth is estimated to be in excess of three times the compensation for the initial hire, depending on the extent of recruiting and training costs that are related to the position. So, if you can reduce turnover by even as little as five to ten percent, the cost of testing the best two or three applicants for a position is pretty minor relative to the return – and that ignores the cost and interruption to the performance of the manager and fellow workers.

Talent ManagementIn my experience with the assessments tools we support, you can expect that they more than pay for themselves from the first hire made where assessments are used during the process. Most employee and new hire turnover is caused by lack of job fit – things such as communication and communication style, the inability to close sales, reluctance to make business calls, failure to make timely decisions, failure to complete and deliver reports, personal interactions or failure to lead effectively. Information from valid and reliable job fit assessments can provide insight into the characteristics that cause these behaviors and, just as importantly, whether or not those are behaviors that have been proven to drive success within your organization.

Here are five key reasons for companies to use assessments in both hiring and other talent management initiatives. They are extracted from an article in Workforce Management written by Ashley Shadday entitled “Assessments 101”.

  1. Screening or Job Fit: “Assessment tests, when used as part of the hiring process, provide employers with an effective way of deciding which candidates are the most qualified for a specific job. Though it may seem that selecting talent would be easy in the present climate, hiring managers have their work cut out for them with many more résumés to weed through.”
  2. Get a Better Read on Job Applicants: “Assessment tools provide managers a more in-depth read on the individual seeking employment, leading to more accurate and long-lasting hiring decisions. Assessments go beyond the typical means of analysis to highlight candidate qualities that might not be evident during a more basic interview process.”
  3. Reduce Turnover & Save Money: “… losing an employee is costly. ….replacing valued performers can reach more than two times an employee’s salary for high-level or specialized positions. Even replacing entry- to mid-level employees can be expensive, once training and recruitment costs are taken into account.
  4. Improve Fairness of Your Hiring Process: “… assessment testing provides the ability to improve fair hiring practices by standardizing the hiring process. Assessments, when properly created and validated, should treat all applicants in the same, non-subjective manner and should not discriminate on the basis of race, color, sex, national origin, religion, disability or age.”
  5. Corporate Career & Succession Planning: “Assessments can be used for employee development to determine a person’s best role. …workers’ roles and responsibilities change over time …Testing … allows organizations to move workers into roles that make the most of their unique qualifications.

Ms. Shadday goes on to cover other subjects in her article that are also very well presented. For the full text of the article, please refer to Assessments 101: An Introduction to Candidate Testing at www.workforce.com posted by: KJ Danderfer February 1, 2010

Career Partners International provides top quality talent management services to organizations of all sizes. Their offices around the world help assessengagedevelop, and transition talent in any industry. To find out more about Career Partners International and how you can maximize your organizational performance, reach out to an office near you or contact us today!

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