Finding the most suitable employee for a position is not easy. Psychological assessment tools are becoming the key strategy of hiring corporations interested in hitting their business goals and avoiding high employee turnover.
Hiring and training new employees can be an expensive process. This is one of the main reasons why an increasing number of companies around the world are including assessment tools in their effort to accomplish a wide range of objectives and to answer a list of needs inside corporations. Together with the aim of hiring the right person for a position, psychological tests run by international work assessment companies also aim to identify high-potential talent, develop workers’ interpersonal and leadership skills, and set performance goals for staff.
WHY PSYCHOLOGICAL ASSESSMENT?
In today’s job market the purpose of psychological testing is to make more informed hiring decisions, and the easiest and fastest way for companies to do this is to consult outside corporations committed to employee screening with the promise to help companies save on the costs associated with high employee turnover. “Assessments are used for a variety of purposes. Most commonly to inform selection decisions regarding who should be hired, but increasingly for decisions about who to promote into sensitive roles and to diagnose areas for learning and development prior to moving into more complex roles,” says Doug Reynolds, past president of the Society for Industrial and Organizational Psychology and senior vice president of assessment technology at DDI, a global talent management consultancy. “Well-designed assessments give you an in-depth reading on the work-related capabilities of people, just as a blood test can help give a reading on physical health. Assessment solutions are useful in promoting and retaining top performers and identifying areas for development. In the case of John Clements, we take pride in our heritage as we have been in HR consulting work for the last 39 years.” “In my experience, assessment tools are often utilized when considering hiring new leaders, senior-level promotions, employee career development and overseas assignments,” adds Carol Olsby, principal of Carol Olsby & Associates Inc., based in Washington. “I have spent my entire career with technology companies and assessment tools are often utilized for the recruiting of executives and senior leaders, senior-level promotions, career development and consideration for overseas leadership role assignments,” continues Olsby. In some cases, psychological testing at companies still appears to be a matter of a “war of talent.” This is the belief of Evelyn Grace C. Sorongon, vice president and managing director of John Clements Consultants Inc., who comments, “As we all know, the war for talent is real and it is best to gear ourselves up and face such a market phenomenon. The talent landscape has also changed. We scramble for talent whenever there are vacancies, and a lot of times we are also unable to keep the talent as we neither need nor motivate the people to perform in accordance with our expectations. It is for this reason that managers of the 21st century should take a serious look at how they conduct their selection and recruitment process. They should also look at whatever assessment tools are available in the market to make the selection process robust and effective.” A “war of talent,” but also a war against the risk of spending money and wasting time on hiring the wrong person: “Assessment companies help their clients manage risk. A bad hire is expensive in time, money, lost momentum and aggravation. Now more than ever, our clients can’t afford a loss in any of these categories. By reducing the amount of ‘unknowns’ we help our clients make better hires and fewer mistakes,” affirms Guy Beaudin, senior partner at RHR International.
STEPS TO SUCCESS
In the hiring psychological assessment the central questions is: “How well does the candidate fit the profile required for the role?” But it would be a mistake to focus only on this and overlook some other key aspects for a successful assessment. “The most important thing is how well the assessment was designed. This is a technical area that requires extensive training and expertise,” explains Reynolds. “Ask your assessment providers if they have industrial-organizational (I-O) psychologists on their staff (they should). Ask for a review of the technical support for the assessment tool. Ask for a conversation with the I-O psychologist about the appropriateness for your application. If the tool is well designed, the expert will be very willing to discuss the foundation for the instrument in terms you can understand. Unfortunately, you can’t often tell a good assessment from a bad one by looking at the surface. It’s the underlying statistical work that makes for a strong tool.” Employee potential and resistance to stress are the key elements at RHR International: “A good assessment goes beyond the person’s current skill set to provide a perspective on their ability to handle roles of increased scope and complexity along with the steps that are required to help that individual achieve their potential. Moreover, as scope and complexity increase, so do stress and scrutiny, which make it more likely that an individual’s derailers will surface. A good assessment will outline an individual’s likely derailers and provide advice on how to minimize and manage them more effectively,” says Beaudin. However, the way to a successful assessment process is not free of obstacles, stresses the managing director of John Clements Consultants Inc.: “For faster and greater productivity, we have embedded computer-based assessment solutions into our selection process. This is a priority step in attracting talents whose interests and discipline are what differentiates them from our generation of manual systems operators. But who says that talent assessment and recruiting is an easy job? Certainly, it requires much effort and a strategic mindset. It also requires a lot of ground work, research and continuous effort to strike the right balance between HR activities versus cost. If one is not careful, costs can skyrocket and the results will not justify putting in place a talent management system.”
A “PASSEPARTOUT TOOL”
Assessment companies can provide a significant, positive impact for a full range of public, private and non-profit organizations dealing with many different businesses and situations. “Assessments are used in practically every industry,” confirms Doug Reynolds. “The typical situations where assessments are most useful involve one or more of a few factors: there are far more candidates looking for a job than can be hired, the job is complex enough that not everybody who is hired ultimately succeeds in the job, and/or the job carries a significant amount of risk (either for the company, the person in the job or the public). Senior executives are often asked to go through assessments to get an idea of their fit and strengths/weaknesses because their work carries so much risk. Conversely, there is not much of a need to assess for instance dishwashers, because most people who would want the job have the capability to succeed and the risks are low if they don’t.” “When a current consumer goods client announced a merger with another international manufacturer of household cleaning products, they contacted RHR to help with the integration of the two executive teams. RHR recommended top candidates for the top 200 positions within the merged company. Seven years out, the merger was identified as one of the most successful corporate mergers of recent times and one of the few that drove real shareholder value,” explains Guy Beaudin of RHR International. “Also, a venture capital organization had a significant interest in a promising software firm. As directors, they witnessed problems occurring as the leadership transitioned from the CEO/founder to a new CEO. They contacted RHR to assist them. RHR interviewed the founder, the new CEO and the employees to ascertain what was happening. An assessment indicated that the new CEO was not a good cultural fit. The board terminated the new CEO. An RHR-recommended candidate successfully took the company forward.”
WATCH OUT FOR FAILURES
Assessing candidates using psychological tools can hide the risk of running into bad performance and wasting time. Unsuccessful psychological assessments are not excluded at all. “When tools are used that don’t have the required validation work, employers can be liable for damages if the tool unfairly discriminates,” explains Reynolds. “This depends on the laws of the country in which they are used, of course. In many countries, it is important to show a correlation between the assessment and job performance. If this relationship does not exist and the test eliminates people from a legally protected class, then the organization can be forced to change the procedure and pay fines. This is one example of an unsuccessful assessment. Well-designed assessments that fit the job they are used for are your best defense against this situation. Companies must be aware that some assessment tools are not much more than a pop psychology quiz invented by a lay person to market a product.” “Being just one aspect of the interview process, assessment could be disastrous,” adds Carol Olsby. “The company also considers the candidate’s interview with the team, employment references, employment history and, if they have received any, personal recommendations from highly regarded individuals. An assessment tool’s results are influential in the candidate evaluation process. For example, if the company has an environment that promotes collaboration and transparent communications and the leading candidate’s assessment reflects low scores on these indicators, this would be highly beneficial information for the company to have when considering the candidate.” “No assessment process is perfect, but all good assessment processes will reduce the risk of a bad hire over time,” is the final conclusion of the senior partner at RHR International, Guy Beaudin.
• Development Dimensions International (DDI) is a top talent management consultancy founded in 1970. The company today counts 46 offices in 26 countries.
• Carol Olsby & Associates is the company founded by Carol Olsby and offers leadership, operational and tactical solutions in human resources.
• John Clements Consultants is an executive search consultancy founded in 1974 in the Philippines.
• RHR International is an executive search firm with offices in 12 countries worldwide. The company specifies in assessment, alignment and development of senior leaders.
Published in the hard-copy of Work Style Magazine, Fall 2014