Spend a Little on Employee Testing
Screening employees for capabilities and personality traits can cut turnover and build better teams.
When it comes to hiring, Dave Ratner believes in an ounce of prevention. In seven years, he hasn’t made a single hire without giving the applicant a screening test. Managers and supervisors making more than $500 a week take an hour-and-a-half battery of personality and aptitude tests scored by an outside human resource consulting firm. Lower-level sales clerks complete a 97-question assessment to ascertain their proclivity for customer service.
Ratner’s business, a chain of four pet food stores based in Springfield, Mass., doesn’t require extraordinary skills or even higher education. But the testing and screening—which costs $600 for a manage—has all but eliminated turnover among his 74 employees and provided Ratner a cadre of productive employees who give him a competitive edge. “You have to be out of your mind not to use one of these tests,” he says.
Small business owners know that hiring is a precarious process and a wrong decision can result in huge inefficiencies. The bad hire is a drag on productivity and morale and frequent turnover is costly and takes management attention away from running the business.
That’s why Ratner is in good company—even tiny businesses are using pre-employment assessments to head off hiring problems. And, in addition to a few national brands (see table), there are perhaps hundreds of vendors offering a wide range of tests for prospective employees,
While there are no precise figures about small business use of testing services, about 30% of all companies use assessments for hiring, promotion, and employee development, according to Management Recruiters International. For small businesses, costs generally range from as little as $12 per employee for an off-the- shelf test to hundreds of dollars for a series of assessments conducted by a professional.
In general, these tests fall into a few categories. Personality assessments measure specific traits –decisiveness, for example. The most famous is the classic Myers-Briggs, which measures people on a set of four personality scales—Extroversion/Introversion, Sensing/Intuition, Thinking/Feeling and Judging/Perceiving. A senser, for example, is more analytical and practical—the right type for office manager. An applicant who scores low on extroversion is not destined for sales.
Other personality assessments are designed to measure traits as they are exhibited at work. Still others evaluate specific skills, such as customer service ability, or cognitive ability.
| Employee Assessment Vendors | ||
|
Company |
Testing Products | Web site |
| PI Worldwide | The Predictive Index: workplace-related personality assessment | http://www.piworldwide.com/ |
| PSI | Variety of assessments, including aptitude, attitude, workplace-related personality, and management | http://www.psionline.com/ |
| Profiles International | Variety of assessments, including workplace-related personality, reliability and integrity, sales ability, and customer service | http://www.profilesinternational.com |
| Wonderlic | Variety of assessments, including work-place related personality, reliability, and others | http://www.wonderlic.com |
Some assessments provide simple scores, while others provide lengthy personality profiles. Whatever type you choose, the underlying idea is the same: By studying the characteristics of existing employees in certain jobs, test producers can tailor assessments that more accurately pinpoint the best people for the job.
How early in the hiring process should you administer a test? That’s up to you. At ROI Solutions, a 12-employee data warehousing company in Medford, Mass., for example, CEO Gina Vanderloop first reviews resumes and conducts initial interviews over the phone. Candidates who pass muster then take a personality assessment.
Amy Bermar, CEO of Corporate Ink, a 10-person Boston-based high-tech public relations firm, whittles down her candidates to a few finalists and then asks those applicants to take a personality assessment, which is analyzed by an outside human resource consulting firm. If the assessment indicates the applicant might not be attentive to detail, Bermar follows up with a proofreading test.
Some assessment firms, such as PI Worldwide, provide detailed profiles of each applicant and furnish questions for follow-up interviews. Recently, Bermar interviewed a candidate who seemed to have all the right stuff. But, when she received the assessment, it included specific questions that could shed light on issues raised by the applicant’s answers. (Example: Was there a time she had to handle a lot of information simultaneously and what did she do?). “These were questions I would never have thought of asking otherwise,” Bermar says.
Assessments can also help a business create a strong team of individuals with complementary talents. Jeffrey Yarborough runs four companies, including a Houston-based restaurant and nightclub and a public relations firm and real estate company in Dallas. He uses the Myers-Briggs to make sure he doesn’t, for example, have too many introverts or extroverts on staff. With too many extroverts, he says, the introverts feel intimidated—they don’t speak up and the company loses potentially useful contributions.
Testing does not eliminate all bad hires. And it raises some risks, including possible violation of anti-discrimination laws. Government rules require that the assessment be tested for validity, which means making sure that the questions do not have a “disparate impact” on protected classes of people, such as specific ethnic groups. The Equal Employment Opportunity Commission standard, according to employment lawyer Joseph Schmitt, a partner with Halleland, Lewis, Nilan & Johnson in Minneapolis, is the four-fifths rule: Each protected class must pass an assessment at a rate that is at least 80% of the rate scored by non-protected classes. Your test provider should be able to demonstrate that the instrument has been thoroughly validated, preferably by using at least 20 to 30 studies conducted by recognized professionals in the field. This is an unregulated business, so be choosey about your testing vendor and insist on proof of validity.
Badly constructed of inappropriate tests can also put you on the wrong side of the Americans with Disabilities Act or privacy laws. Schmitt says a federal court recently ruled in favor of an employee who was denied a promotion when a personality assessment he was given indicated he might be mentally ill. Tests aimed specifically at measuring honesty and integrity can put you in a danger zone, too. Massachusetts bars their use, while Rhode Island law holds that they can’t be the sole determinant for hiring.
Finally, keep the assessment in perspective—it is not the acid test. “It should be one step in a very rigorous hiring process,” says Leslie Yerkes, a human resources expert with the Catalyst Consulting Group in Cleveland. Assessments can help you fine tune a search, but it’s no substitute for careful interviewing and thorough reference checks. But, they can help make hiring less of a guessing game, and more of a sure thing.
