Getting elite business results relies on elite talent – but identifying top talent can be difficult, especially in high-demand positions or industries and in a strong economy. Proper assessment is a game-changer. By using assessment tools to measure and qualify job candidates, you can be more confident that the candidates you select will be a great fit.
This paper examines what assessment tools can do, what they assess, the potential impact on the business of effectively using these tools, and how to pick the right tool for your organization.
Getting elite business results relies on elite talent — but identifying top talent can be difficult, especially in high-demand positions or industries and in a strong economy. And while some organizations celebrate low turnover rates, that’s not necessarily an indicator that you have the right people in the right positions. Growth companies excel at reducing volatility in their risk, their operations, their strategy, and their people. Assessment reduces volatility in identifying your next best hire, your next outstanding leader, and your next great team.
Proper assessment is a game-changer. By using assessment tools to measure and qualify job candidates, you can be more confident that the candidates you select will be a great fit. Advancements in technology have moved assessment tools from glorified Buzzfeed quizzes to high-tech powerhouses that identify and highlight the talent you need without unlawfully discriminating against protected classes. It’s time to learn more about the potential of these tools and apply them to your human capital strategy to deliver strong business results.
This paper will look at what assessment tools can do, what they assess, the potential impact on the business of effectively using these tools, and how to pick the right tool for your organization.
What Assessments Do
Hiring managers and recruiters have gotten very good at screening resumes for technical skills and evaluating those skills in interviews, but they’re not as good at identifying the nontechnical skills and traits that are often even more important in determining an employee’s success at an organization: teamwork, motivation, flexibility, diligence, and so on.
The right assessments offer rigor and objectivity in analyzing where applicants stand on these nontechnical traits that enhance the likelihood of success.
We all know employees who have dynamite technical skills but are toxic to work with, or who perform inconsistently, or whose background looks good on paper but just doesn’t mesh with the team.
And while many hiring managers believe they’re a good judge of character, the fact is that most are terrible at it. Some only do it once or twice a year, and the turnover rates and hard work managers put into salvaging weak performers should serve as a reminder that relying on a proven toolset is much more effective than mere gut feelings.
The stakes are high. According to a report by the Center for American Progress, turnover costs for positions earning less than $30,000 are 16% of annual salary. Positions with higher salaries can cost far more—sometimes more than 1.5 times the annual salary. That doesn’t include intangibles such as disruption to team engagement or ongoing projects, or the lasting negative impact of poor performers on customers.
A recent study from Harvard Business Review found that companies waste over $8,000 each day on bad hires.1 For a few dollars a day, companies can reduced that cost significant through assessment.
A computer systems company looking for new manufacturing employees used assessment science to identify candidates who would be successful on the job:
- 21% higher attainment ratings
- 24% higher quality ratings
- 39% higher supervisory performance ratings
Hiring managers need help. Sound assessment tools can address the full range of hiring challenges:
- Reducing turnover, by identifying candidates who are more likely to be successful and who are willing to stay longer. One large retailer was looking for a standardized solution to hire store associates and reduce turnover. After going through a careful analysis of job requirements and customizing its assessment tool, the company reduced turnover by 10 to 30% in different regions across North America.
- Improving job performance, by selecting candidates who are a good fit for the organization and can thrive in the environment. A homebuilder generated $6.8 million in additional sales and reduced hiring costs after implementing an assessment process, and found differences as great as $5 million in real estate sales per sales professional.
- Increasing engagement and productivity, by helping recruiters find candidates who will succeed in their positions. A computer systems company looking for new manufacturing employees used assessment science to identify candidates who would be successful on the job. High performers on the test had 21% higher attainment ratings and 24% higher quality ratings. They also had 39% higher supervisory performance ratings.
Applicants identified as having advancement potential were 74% more likely to be top scorers on the assessment.
Leading organizations use state-of-the-art assessment tools for selection to realize:
- An improved candidate experience: A branded platform can engage candidates and provide them with feedback about where they stand in the hiring process. Especially in B2C businesses, a positive assessment experience can improve chances of retaining applicants as loyal customers, regardless of the ultimate selection decision.
- More efficient use of recruiting resources: The assessment process provides more highly qualified job candidates, so recruiters focus their time and effort on only those candidates most likely to be successful.
- Consistent standards across multiple locations: As an organization gets bigger, the variation of decision-making naturally increases as well. The CEO of a small company is the one who makes hiring decisions; a larger organization with multiple managers in multiple locations is vulnerable to personal bias that will play a larger role in assessment and selection.
- A stronger culture: By screening applicants for specific traits, preferences, and capabilities (such as innovation, compassion, initiative, detail-focus, or collaboration), organizations can shape the specific culture that sustains its strategy. Hires screened by these tools are twice as likely to be a good culture fit.
- Diversity of hires: Well-designed assessments enable diversity in the workforce. Table stakes is an assessment that does not adversely impact any group. Beyond that, the assessment process should and can make the connection between diversity and people performance. An elegant assessment solution captures diversity in performance, work styles and thought process.
Assessments can also be used to help managers onboard employees more effectively. Knowing a new hire’s preferences, strengths, and weaknesses upfront, instead of gradually—and sometimes painfully—learning about them in the first 90 days on the job, can help to proactively build effective, customized onboarding processes that accommodate different learning styles and personality attributes.
These tools can also alert hiring managers to indications that candidates have leadership potential. In one example, applicants identified as having advancement potential were 74% more likely to be top scorers on the assessment.
How It Works
Define the requirements for future success
First, managers need to identify what it takes today and into the future to be successful in a job. Are there key traits—such as being outgoing, diligent or, in a hard-driving or highly competitive environment, even contentious? Does the person need complex reasoning skills or acute problem-solving skills? Do they need to be a math whiz? No matter what the position needs, assessments can test for it. Maximize the value of your assessment process and reduce the risks of improper assessment by gaining the advice of an experienced industrial/organizational psychologist.
Some of the capabilities typically evaluated in an assessment include:
- Technical skills: These are usually the easiest to assess—the typical “resume” skills.
- Decision-making: How candidates approach decisions, how quickly they’re able to weigh multiple options, and how they come up with a final answer.
- Problem-solving: How easily a candidate may develop creative solutions, or find ways to break down key challenges into manageable elements.
- Achievement style: What drives a candidate to succeed, and whether the source of that motivation is external or internal.
- Emotional expression: Whether candidates keep their composure in stressful situations, or whether they express their emotions in useful or disruptive ways. These tools may also indicate how positive and optimistic a candidate will be.
- Work style: How a candidate approaches a task, such as by looking at the big picture, or by taking steps and making sure the details are right.
- Social skills: Whether a candidate is outgoing or reserved, how quickly the candidate connects with others, and whether he is an informal influencer or a follower within the team or organization.
- Flexibility: Whether a candidate is rigid in her outlook, or whether she can quickly adapt to new situations and ways of thinking.
- Leadership: Whether a candidate is forceful or collaborative, directive, or laid-back in leadership style.
Many of these critical capabilities have been seen as hard-to-capture “intangibles,” forcing hiring managers to rely on gut feelings or intuition. But assessment tools can mitigate this assessment risk, substantially increasing the odds of hiring the right person.
Measure for those traits
After you’ve determined the capabilities you need to screen for, you need to develop a process that best measures them. Here’s where working with an internal or external partner who has deep grounding in the science of organizational psychology can really pay off. The right partner will know which tools and techniques have the rigor, fairness, and proven track record to validly assess each specific target capability, and where customization of measures and scoring can materially enhance your ability to winnow out those who aren’t a good fit.
Once you have an assessment process assembled, it is often useful to conduct a “test run” on current employees to check whether or not the scores on these tools separate your top and bottom performers. Doing so validates the tools, ensures the results you get are accurate, and helps you use the assessment to identify future candidates more effectively.
Brand your assessments
Next, look for ways to brand your assessments. When candidates come from your customer pool, it’s even more important that your brand is infused throughout the assessment process. This may include:
- Using terms, catchphrases, and slogans in the assessment.
- Embedding realistic preview videos to explain the culture of your organization.
- Incorporating colors and logos on key pages.
Close the communication loop
Finally, when you get the assessment results on candidates, find brand-appropriate ways to provide feedback to all candidates, even those who will not continue in the interview process. Even automated emails that offer some high-level information on stronger and weaker capabilities are seen as helpful to candidates. This helps ensure that both accepted and rejected candidates get something out of the process, which helps them stay loyal to your brand regardless of the employment outcome.
- High scorers were found to be almost twice as likely to be ranked as top performers
- Those who scored at high levels were on average more than 25%, and in some cases almost 60% more likely to receive "perfect" ratings from customers
While every organization can use assessment tools to effectively identify top talent, the potential of these tools to strongly impact financial results is most visible in organizations conducting large-scale hiring, such as those in retail, hospitality, or contact centers.
As an example, a broad-line retailer was going through a major store redesign. Company leaders decided they needed a strong assessment tool to identify higher-quality employees to align with the redesigned branding. To handle the high-volume screening efficiently and reach the widest possible network of applicants, they specifically needed an online solution, one that was fair and complied with employment laws.
With the support of an assessment partner, the company developed a brief, vivid video preview of the target job—which gave applicants a clearer idea of what working in the redesigned retail environment would entail better than any generic written job description could have possibly provided. The company developed a set of interview questions and evaluation guidelines for assessing target capabilities and traits and some work samples to test job-relevant skills. Equipped with these tools, the company was able to implement a consistent, customized, validated online assessment process tailored to different levels of employees, screening more than 300,000 candidates across 850 stores annually.
The results were remarkable:
- High scorers were found to be almost twice as likely to be ranked as top performers.
- Those who scored at high levels were on average more than 25 %, and in some cases almost 60%, more likely to receive “perfect” ratings from customers.
But that’s not all. These improvements strongly affected the bottom line.
Top-scoring stores notched almost $1 million more in sales, as well as $379,000 more in store credit card sales.
It’s important to remember the detrimental impact of hiring mistakes. In another retail organization implementing a similarly rigorous assessment, people whose supervisors said they wouldn’t hire them again were more likely to score in the bottom third on an assessment than in the top third. Using an assessment and selection tool will help improve everyone’s experience—candidates, employees, hiring managers, and customers
How To Pick A Selection / Assessment Tool
To determine which selection assessments are right for you, follow these steps:
Start with your main points. What are you trying to solve? It might be increased retention, higher sales, better quality candidates, or a safer culture. Defining the business problems you need to solve will help you identify what you need to assess.
Identify the skills that will solve that problem. If you feel your business isn’t providing the customer service that your brand promises, you’ll need to identify candidates who are personable, insightful about customer needs, and go the extra mile. If your safety incidents have gone up, you will want to assess for rules compliance and conscientiousness. Look for ways to leverage your assessment tools to build the people capacities in your organization that align your HR strategy with your business strategy.
Ensure the test is fair to all candidates. Guaranteeing that the test doesn’t discriminate against protected classes is paramount. The assessment must be valid, lawful, and relevant—yet another reason to make sure you are relying on sound professional expertise.
Rely on science. The best tools are backed by years of research. They’re designed to mitigate “desirable responding” and other attempts to “beat” the test, ensuring the best prediction of performance on the job. In addition, they are free of cultural bias.
Look at the length. Make sure the tool asks enough questions to get relevant insights, but not so many that people become frustrated or discouraged while taking it. The length of the questionnaire will depend on the complexity of the profile you’re assessing; a shorter process may be adequate to select customer service representatives, not for applicants for leadership positions. More than an hour is extreme; 15 minutes to a half-hour is a good ballpark for most entry-level positions. Remember, if the assessment experience is too short, candidates will feel like they didn’t have the opportunity to demonstrate their capabilities.
Check for flexibility. Look for tools that are flexible and can be adjusted easily as you get results back; tracking may show that you are eliminating too many borderline candidates, for example, when you want a larger pool before you start whittling down at the next stage. A nimble tool will help you hire the way you need to and continue to optimize the assessment to achieve even greater business impact in the future.
All of these factors will help you build an applicant experience and an administrative process that is as smooth and seamless as possible.
Ready To Boost Your Business?
When it comes down to it, the businesses that select the right talent, train and develop that talent, and engage them most effectively are going to win. Technology, products, and processes can be temporary advantages against the competition, but elite organizations and those that aspire to be elite know that people are the great differentiator and ultimately determine sustainable success.
Embracing state-of-the-art assessment technology that delivers results while saving time and money will help you improve business outcomes. As advances in Technology continue to drive change in all parts of talent acquisition, using effective selection assessment will be vital to success.
How Aon can help
Not only do we have the world’s most sophisticated assessment technology, we have an equally impressive group of global consultants that can guide you through the development of an assessment strategy tailored for your organization.