How Best In Class Companies Use Pre-Employment Testing

How Best In Class Companies Use Pre-Employment Testing

Despite the recent recession, rising unemployment and an expanded labour pool, Best-in-Class organizations are using more assessments for both pre-hire and post-hire activities.

A recent study published by Aberdeen Group found that Best in Class (“Best”) organizations are consistently using assessments for a wider range of HR functions than average or underperforming companies. In summary:

  • 91% use pre-hire assessments for candidate screening
  • 82% use assessments to determine job fit or competency gaps
  • 76% use assessments to evaluate leadership potential
  • 62% use assessments to build employee development plans.

The study was based on 400 organizations world-wide surveyed in the first quarter of 2009 and addresses a range of subjects relating to the use of assessments. Best organizations were distinguished from average or underperforming organizations based on:

  • actual employee performance
  • measured workforce productivity; and
  • measured quality of hire

Some of the key findings about the use of assessments by Best organizations will be of interest to all companies:

  1. The principle reasons why Best organizations are relying more on the use of assessments for screening and selection in today’s labour market are as follows:
    • Although rising unemployment and uncertainty in the general labour force has expanded the labour pool, finding applicants with the right set of knowledge, skills, attributes and behaviours has actually become more difficult. The increasing number of applicants for available positions, coupled with reduced budgets for staffing, supports the use of assessments to identify and respond quickly and effectively to the best applicants.
    • The increasingly competitive business landscape is putting pressure on companies to seek candidates with development potential, particularly in an environment where companies are finding there is a limited availability of skills and talented people in the available labour pool..
  2. While nine out of ten Best organizations use assessments to screen for fit at the pre-hire and pre-interview stages, these organizations are also becoming more aggressive in the use of assessments for post-hire talent management activities and in particular the following:
    • Employee development using assessments to identify job fit gaps and creating specific development programs aimed at bridging that gap.
    • Succession planning with the support of behavioural assessments to determine leadership potential and promotion readiness. Assessments help managers to insure that objective promotion decisions are made.
    • Measuring engagement through surveys, gauging employee satisfaction and engagement. Ensuring that employees are satisfied in their career programs is critical for retention.

“The message is clear: while assessments are central to filter through the increased flux of applicants to find the most qualified and or best candidates, they will also be critical to help organizations develop, retain and promote the talent they cannot afford to lose.”

  1. Best organizations measure the effectiveness of their assessment initiatives. The top return on investment indicators used by Best organizations to determine the effectiveness of their assessment initiatives are:
    • Employee performance
    • Quality of hire
    • Retention/Turnover
    • Employee productivity
    • Recruiting costs /Cost per hire

And the top metrics used to quantify the quality of new hires based on satisfaction and productivity are:

  • Hiring manager satisfaction
  • Time to productivity
  • Ratings on performance review
  • Voluntary turnover
  • Involuntary turnover

In today’s environment, quality is about maximizing the return on investment of time, effort and resources through smooth transition and results from newly hired or newly promoted individuals.

Best Organizations first develop an assessment strategy or action plan to ensure their use of assessments is effective. The following issues or subjects should be considered in the development of an assessment strategy:

  1. Identify the organization’s weaknesses or pain points in talent acquisition and talent management procedures and then consider where and how assessments can address those pain points.
  2. Define metrics to monitor the assessment strategy. Two/thirds of Best Organizations take the time to develop measures to monitor and manage their assessment strategy while only one/third of average or underperforming organizations do so. Developing solid metrics enables an organization to determine the effectiveness of its assessment action plan by comparing actual results to a baseline of key performance indicators.
  3. Standardize procedures to assess job applicants and employees. This not only enables organizations to make objective hiring decisions, it also allows for more legally defensible hires that reduce the risk of litigation.
  4. Benchmark top performers to identify and define what makes a top performer successful. Best Organizations are two to three times more likely to implement this procedure than their competitors because it provides a benchmark that identifies the required skills and behaviours for both job applicants and incumbents. The implementation of this procedure encourages improvement of both recruiting and development programs. At the same time it assists in gaining buy-in from supervisors, hiring managers and even IT personnel on the use of assessments by involving them in the process.
  5. Identify employee prospects for promotion to key positions in the organization. Best Organizations are twice as likely to use assessments for succession planning as average or underperforming organizations. “Making educated promotion decisions not only reduces recruiting costs, it also improves morale and job satisfaction because it sends a message of fairness and equity”.
  6. Use assessments not just for pre-hire screening and selection decisions but also for post-hire development and training. Best Organizations develop a candidate assessment database to share with supervisors and managers on an on-going basis. The database allows the organization to maximize the benefit of their assessment programs by providing management continuous access to valuable employee job fit information that supports on-going coaching and development programs.

Best Organizations go on to support the implementation of their assessment strategy by:

  • Developing a standardized assessment process throughout the organization.
  • Gaining buy-in from all levels of the organization including leaders and executives, supervisors and hiring managers to ensure the results and data are used effectively in making both pre-hire and post-hire decisions.
  • Establishing a baseline or benchmark of skills, knowledge, abilities and behaviours required for job competency. Assessments are used to identify the gap between the candidate’s profile and the benchmark of knowledge, skills, abilities and behaviours preferred for the position.
  • Developing profiles (benchmarks) of top performers in each position. Defining the profile of top talent gives an organization a target against which to assess its employees. The benchmarks can also be used to design development programs for individual employees.

Prevue HR can help you to design and implement an assessment program for your organization to make your company a Best in Class organization with a Best in Class system.