Pre-employment tests are a powerful way to gauge a candidate’s aptitude, fit, and performance potential before they are hired. But are they really any better than traditional screening methods?
Pre-employment tests are on the rise: according to the Talent Board’s most recent Candidate Experience Research Report, 82% of companies are using some sort of pre-employment assessment test:
- 62% are using some sort of ability or cognitive testing to test candidate's job-related abilities.
- 54% are using job simulations to test candidate’s performance potential (up 50% from 2014).
- 51% are using assessment tests to gauge a candidate’s cultural fit (up 22% from 2014).
- 47% are using assessments to evaluate a candidate’s personality.
While hiring assessments are being used more frequently across the board (especially in 2018), they are still used most when screening hourly and entry-level candidates.
Fully-validated pre-hire assessments are expensive. While there are “off the shelf” tests and tools for assessing basic job skills, these are not nearly as predictive as the assessment most employers should be using: the custom Industrial Organizational (I-O) validated assessment.
A custom-built I-O assessment requires a team of fully trained I-O Psychologists. By identifying the definitive traits of top (and bottom) performers in a certain role at a specific company, they build a unique model of the “perfect performer.”
With that “perfect performer” in mind, the I-O team builds a test designed to measure the knowledge, skills, and abilities (KSAs) that are most predictive of on-the-job success.
The test is subject to rigorous testing before it goes live, ensuring that it is valid and has no adverse impact on protected groups.
While we’ve looked at validity in assessments before, here’s a quick guide.
There are three types of validity measured by I-O Psychologists:
- Criterion-related validity: how well the test correlates with actual job performance and results.
- Content-related validity: how well the test correlates with actual job skills.
- Construct-related validity: how well the test correlates with the characteristic it claims to measure, like personality.
Validity is measured with the Validity Coefficient Value, or r-value.
An excellent assessment will achieve a validity coefficient value of .4 - r-values above this are largely unheard of for pre-employment tests.
As a bit of context, a 1998 analysis of pre-employment selection methods put "years of education" at a .1 and "years of job experience" at .18. Graphology, the study of handwriting (if you recall from our history of assessments piece, graphology was used as a screening or testing tool up until the Great Depression) boasted a phenomenal .02.
In other words, if hires were made based solely on the number of years a candidate or applicant spent in academia, only 10% would become top performers. If years of prior job experience was the only screening factor, only 18% would become top employees.
Screening based on education and previous employment experience is incredibly common - but if the goal is to make data-driven recruiting decisions, the approach is flawed. This is where assessment tests with double or triple the correlation to job skills and performance can be used to great effect (assuming, of course, that applicants/ candidates aren't gaming the talent assessment).
Assessments Double or Triple the Quality of Screening Decisions
If you have a custom assessment with an r-value of .35 or higher, the quality of your screening decisions literally doubles (or triples).
This means the candidates that make it to the interview process are already 3x more likely to succeed in your organization. Rather than using the time-consuming interview process to identify job-related traits and attributes, employers can focus hiring resources on less tangible (but equally important) qualities like cultural fit and the ability to work with the hiring manager’s team.
As we’ve covered before, the ability to assess and identify top performers before anyone else is a key competitive advantage.
If your competition is still making most of their screening and hiring decisions based on education and past experience, a custom-built assessment puts your recruiting function lightyears ahead.