A recent study of over one thousand HR professionals from companies throughout the world showed a significant proportion of businesses are using psychometric tests as part of the pre-hire process. For example, 62% are using personality assessments.*

Indicators organisations look to when determining validity of an assessment:

1. Quality of hire
2. Productivity
3. Retention / Staff turnover
4. Process efficiency
5. Financial metrics
6. Training effectiveness/cost
7. Legal compliance
8. Performance ratings
9. Employer brand

Yet, according to a 2014 study (registration required) only 14% of organisations have data to prove the positive business impact of their assessment strategy.

A validity study is key in helping determine the effectiveness of your assessment strategy. You might remember validity from a previous blog article. A buzzword in psychometric assessment, it shows that the tests used go beyond something that looks relevant, ensuring they provide true value. The key questions a well designed validity study can help you answer are:

• Can you be confident that the prediction of a psychometric test is accurate for your situation?
• Can you be confident the investment you are making in pre-hire assessments is providing a worthwhile return?
• Is the test truly enhancing your ability to predict future performance?

Running a validity study: Is it a hassle?

No it is not. Especially, if you compare the potential benefits it can bring to your organization to the efforts it takes from you to run the study. In a nutshell, the process goes like this: The aim of every validity study is to let expert psychologists look into how well your chosen psychometric, or any other, assessment tool is performing. To carry this out, first, data that characterizes the on-the-job performance of candidates who has been previously assessed with the tool in question is gathered. Then, test results are compared to on-the-job results and the link between the two is scientifically demonstrated and translated into real business terms.

So how could a validity study help you?

• It will be created bespoke to your needs and your company.
• A validity study demonstrates the value you will get out of using psychometric tests, proving how they work for your own unique workplace environment.
• This provides you with solid ROI information to support your use of such tests – you won’t just be telling people you use them because others do or because they usually work, but because they work for you.
• The analysis will let you know exactly what to look for in each candidate’s results – to ensure you pick the best people for you.
• With the right data, candidate attributes can even be modeled into your future reports.
• You want more specific predictions about how well someone will meet your competency requirements? Given competency performance data, this is possible.
• Want to know whether someone has the characteristics of a good salesman in your team? If you have appropriate sales data, future sales performance can be predicted for each new candidate.

A validity studies are essential parts of data-driven HR processes, and great tools to prove you are using the right tools to select, develop and retain talent.

Talentsift offers psychometric selection tests and the best online assessment centre solution on the market. Our validity studies are complementary to all our tools, to ensure you make the most effective use of psychometrics. Contact us for more details!

*CEB Global Assessment Trends report 2014

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In reality, smaller businesses offer many advantages big businesses cannot, and there are some great articles describing how they can capitalise on these to become more attractive for talented candidates. We collected experts’ advice on small businesses’ specific hiring challenges, and looked at how using psychometric testing can help small firms put this advice into practice and become more effective not only in attracting but also in identifying top talent.

You could ask how psychometric testing is a new tool. It is not. What’s new, is that nowadays valid, quality tests running on online platforms are both easily accessible and affordable without the need for a large budget.

Whom to hire?

Small companies on the rise often face the dilemma of deciding which positions are most critical to fill first. Bob Marshall in the Wall Street Journal recommends small firms should first select candidates who are flexible enough to accomplish different kinds of tasks: “In a start-up, there are no set jobs. Everyone does everything.” But, how are you going to find out if someone can cover tasks across different fields? It is already a challenge using interviews to learn if a candidate will perform well in roles that are more specific, but in these cases checking previous projects or having the candidate to complete a work sample task can give some insights. However, what sample tasks are you going to give if you are looking for someone with an “all-rounder” profile?

Psychometric reasoning tests appear to be an appropriate tool for assessing the kind of mental ability and speed of thought you are looking for and can complement interviews and CV checks effectively. Different reasoning tests can give objective insights into how a candidate deals with numerical data or written information, and whether they can evaluate information quickly and apply logic to solve tasks in novel situations. Alongside this, amongst other traits personality tests can assess if someone is ready to work independently or to take on responsibility with little supervision. These are all vital assets in a small company.

High stakes hiring decisions

Decreasing the risk of bad hires is the strongest claim for using psychometrics in any organisation independent of its size. A company of 1000 employees would also want the best performing candidates to boost profits and strive for low staff turnover rates to keep replacement related costs low. However, for a 5-person business one or two bad hires can literally bring the company down.

At a 5 person business every hiring decision is of high stakes

Psychometric tests are not behavioural crystal balls telling a candidate’s future with 100% certainty, but research shows that they are much better predictors of future work performance than traditional selection methods.

Scarce HR resources

Without dedicated HR departments, or lacking many people working on recruitment full time, small companies often lack the time and resources to sort through a high volume of resumes, run dozens of reference checks and conduct telephone interviews to pre-select suitable candidates. One way of getting around the issue is finding a way to reduce the number of CVs you receive. Experts at the WSJ advise small businesses to avoid big job boards and focus on niche boards or LinkedIn groups in their area or industry where fewer, but only relevant job seekers will find their job postings.

While it is always a good idea to target your message, if you narrow down your audience too much you are risking not having a big enough candidate pool to choose from and not reaching the talent you are looking for. Psychometrics can be applied as a complementary and less time-consuming method to solve the problem of sifting out unsuitable candidates. One common way of using psychometric testing is to set a benchmark score for each test type and have only candidates scoring above the benchmark qualify for the next round. Using an online test platform, sending out the test invitations and having a quick look at the results takes no more than 5 minutes per candidate. When set properly, these benchmarks provide a clear, relevant standard that candidates need to reach to be considered.

You may be surprised how much resource spent on CV sifting, reference checks and other pre-screening methods, such as phone interviews, can be saved by omitting low performing candidates. To spare significant resources, your benchmark score does not have to be very high. Once you decide to go with psychometrics, your test provider will be able to give advice on best practices in order to get the most out of them.

Hiring freelancers and remote workers

One of the biggest advantages small businesses have over large businesses is their flexibility. This is highly appreciated by people who want to escape the corporate culture of rules and regulations and an asset small companies can capitalise on when competing for talent. Flexibility comes in many forms from no dress codes to flexible working conditions.

Fabio Rosati, Elance CEO and president, on the American Express Open Forum argues that an innovative way for small businesses to level the playing field is to embrace the ever expanding workforce of freelancers and people who prefer working from home or from remote locations: a talent pool rarely accessible for corporations due to their more rigid processes and organisational structure.
Having access to a large and unexploited candidate pool is a great thing, but still here, you do not just want to attract candidates – you want to identify real talent. With some freelance specialists, online reviews and trial projects work well, but if you want to hire permanent off site staff, you are practically back to square one. You have to deal with the CV sifting and reference checks again, only this time, in some cases, you do not even have the option of a personal interview.

Online psychometric tests work the same way in this case as they work with hiring on-location staff. They can be completed from home, and given that less information is available, the extra insights they provide on candidates are even more valuable in these special cases.

It can be challenging to compete for top talent with the bigger players, but small businesses are definitely not in a losing positon. With many advantages over large corporations, they need to find the ways they can rely on them to attract, identify and retain top talent. Implementing psychometric testing into their recruitment process is one way for them to pick up the gauntlet, and a potential solution to some of the HR challenges they are facing.

Talentsift offers psychometric ability and personality tests and the best online assessment centre solution on the market. If you would like to know more about psychometric testing, read our introductory guide on psychometrics, or get in touch and our occupational psychologist experts will readily answer your questions.

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