Tests Improve Chances of Hiring Right the First Time Michelle Martinez

Printer-friendly version

Searching for and training one management-level scientist easily can cost $5,000. For a senior-level executive, hiring and initial training could run as much as $200,000. If these hires fail, the employer incurs huge expenses, which according to a Center for Creative Leadership survey of 500 chief executives is not uncommon. About 35 percent of recently hired managers and executives are judged failures, the survey reported.

Costly hiring mistakes have prompted more employers, as well as search firm to complement the traditional recruiting process with some of form personality, aptitude or skills testing. Martin H. Bauman, president of New York-based Martin H. Bauman Associates executive search firm, uses a battery of testing when interviewing candidates for his clients, which have included W.R. Grace, Honeywell, Celanese, Berlex Labs, Johnson & Johnson, Novartis Pharmaceuticals, Warner Lambert, Forest Labs and Schering Plough, to name a few.

"Most recruiting firms use two tools to assess candidates--the interview and the reference check," Bauman says. "I call this 1.5 tools because reference checks don't generally offer much information. We use five tools"--a combination of interviews, tests, in-basket simulation exercises as well as a self-concept exercise. "We use very specific tests, which means the battery of tests is different for each person," he explains.

Tests Aid the Hiring Decision

A candidate who interviews with Bauman's firm can expect to spend up to four and a half hours on testing exercises. But, the time invested in assessing candidates pays off. Bauman explains:

"We sent out candidates who had been tested and those who were not. The rate of (hiring) success of those tested was 89 percent versus 68 percent for those not tested." The testing adds less than one percent to his firm's administrative costs, but improves the selection success rate by at least 20 percent. "It makes clients very comfortable to have this value-added dimension.

"If you put together tests and interviews, you've upped the predictability of success," he says. "For example, your chance of accurately predicting a candidate's performance (via interviewing) is probably 58 percent, therefore, you have a 42 percent chance that you may not be correct. Using a battery of specialized tests provides a selection success rate of 58 to 60 percent. By combining the two, you've increased your success rate tremendously."

Whether testing is used for selecting a chemist or for the CEO slot, most tests involve problem solving and personality components. "About 25 percent of the tests we use are given to every candidate; the tests that look at intellect, savvy, IQ and cultural fit," Bauman explains.

Factors That Tests Uncover

Years of creating leaner organizations is one reason that there's been a rise in the amount of recruitment-based testing, says Harold Weinstein, chief operating officer of Caliper, a personnel testing and consulting firm in Princeton, N.J. In addition, fierce competition leads employers to look for personality traits that may not as obviously surface in face-to-face interviews.

Testing allows employers to pinpoint more of the intangible qualities by asking questions such as: Can this individual work well on a team? Is he or she flexible and capable of learning new skills? Does this candidate possess a sense of urgency and understand the bottom line? Is he or she creative or entrepreneurial? Will this fit person fit into the corporate culture?

"Versatility is what people are looking for," Weinstein says. "Both large and small companies are looking for the same types of people. From a personality perspective, they want employees to be highly flexible, open-minded and strategic," he says. "And, if a person is very well-rounded, they can more easily move from job to job in an organization."

Another reason employers use tests is that the task of assessing candidates has become more complicated because people are savvier about the interviewing process. The technical skills are the easiest characteristics for employers to assess, says Weinstein. The core competencies are a little harder to assess; skills such as time management and problem solving.

"Employers are turning to us for better hire rates," he says. "One of the things we try to determine first is what the job actually entails. Defining the role in the first place is critical when assessing a person in the three important job areas--technical skills, core competencies and motivational factors."

New Trends in Testing, Screening

The blessing and the curse of the Internet is volume, says Kevin Wheeler, president and founder of Global Learning Resources Inc., a human capital strategies firm. Recruiting Web sites easily and effectively spread the word about open job positions. It has become so easy however, that often times, employment professionals find themselves inundated with resumes of people who do not meet qualifications.

Two ways that employers can deal with volume, says Wheeler, are screening and testing:

• Think about incorporating a Web-based tool to screen candidates. "These tools are offered by companies, such as Hire.com and Recruit.com," Wheeler explains. "As an example, Hire.com uses the process of asking simple questions as a screening technique. This type of software allows the recruiter to set up a series of questions about each job that a candidate can answer. By answering the questions, a profile is built of that candidate," he says. "A report is generated that ranks each candidate according to predetermined criteria. By using this technique, a recruiter can start seriously screening candidates that scored highest and work down the list. While this doesn't eliminate any candidates, it does provide a way to prioritize them."
• Provide a test to screen candidates. "This technique may someday flow naturally from the one described above, but today, it is only available as a separate service," notes Wheeler. "Many companies are offering some form of testing online, sometimes only as a way to help candidates make their own decision." Cultural fit and technical skills tests are the most popular types accessible to candidates via employer's corporate Web sites.

Three Levels of Online Screening

Online prescreening by the Fortune 500 grew 228 percent in the last two years, according to the report, Trends in Fortune 500 Careers Web Site Recruiting by iLogos Research. Though still in its infancy, online screening is divided into three major areas, says Dr. Charles Handler, president and founder of Rocket-Hire.com.

• Nonscientific screening. "Nonscientific screening is best suited to the task of reducing the volume of applicants for a given job by eliminating candidates who are clearly unqualified," notes Handler. "The major advantage of this type of screening is that it is most often an automated process. Once you configure your system, it runs by itself, automatically screening out applicants who are not qualified for the job."
• Knowledge/skill testing. "This type of screening offers the ability to measure an applicant's knowledge of a certain computer program/application or a specific area of expertise," Handler says. "The advent of the Internet as a delivery platform has really helped to increase its popularity. It offers an excellent return on investment by providing an additional tool for reducing the number of unqualified applicants in your applicant pool."
• Scientific screening. "Once you are satisfied that your initial screening processes are effectively screening out unqualified applicants, it's time to think about installing scientific screening as a way to evaluate existing qualified applicants and gather the additional information needed to choose the best of the remaining candidates," Handler says. "Scientific screening is also useful for helping to solve targeted staffing-related problems within your organization. For instance, scientific screening tools can help reduce turnover at a given job by helping you select employees that are a better fit for that job."

"I predict that pre-screening and testing of candidates will be a growing part of the online recruiting scene over the next twelve months," Wheeler says. "I also predict that companies will have to offer candidates who consent to all this screening and testing something more than a thank you. I think that there has to be an offer of an instant online interview, or at least, the offer of an interview in the future. There may have to be monetary incentives or an immediate phone call."

Michelle Martinez is a Leesburg, Va.-based writer specializing in recruitment, human resources and workplace management issues.