Are Psych Tests Worth the Investment?

Are Psych Tests Worth the Investment?

Psych tests have been around since the 19th Century when both China and France used them to evaluate mental ability. Modern day assessments are used both for recruitment to understand more about the capabilities of job applicants and for development as part of a rigorous training needs analysis or self-awareness exercise.

I am often asked by business leaders if Psyching Testing really works and if they are worth the investment. Here are a few critical pieces of information about Psych Tests you should know before answering this question for yourself:

Fact #1 – Not all Psych Tests are the Same!

There are two key types of tests:

Personality or Work Style – These describe everything from personality types through to work style and at the high-end leadership style and potential.

Cognitive Ability – These measure learning ability and the ability to work with complexity. They come in various forms, with numerical, verbal and abstract reasoning tests the most commonly accepted measure of “smarts”.

Skills and Ability – These measure every thing from attention to detail, typing skills, and proficiency on Word, Excel and Power Point.

It is critical that the right tests are selected for the role  – which means that the “one-size-fits-all” approach is often not that effective.

Fact #2 – Not all Psych Tests are Made Equal!

To keep it simple, there are two classifications of Psych Tests – Those that predict job performance and those that don’t!

Buyer beware when it comes to selecting tests and a provider. Some tests are highly effective at “describing personalities” such as if someone is more introverted or extroverted. However, this has nothing to do with on the job performance. In fact, many of the best sales people are introverts (contrary to public perception) because they are really great at one thing most extraverts are not – listening!

The best tests are those that are backed by research to be predictive of job performance and include cognitive ability and work style assessments that must be mapped back to the team and company culture and requirements of the role.

These tests can be used in volume as highly effective “screening” tools or in smaller volumes for short listed candidates.

Fact #3 – Cognitive Ability is the Single Best Predictor of Job Performance

Despite how fashionable Emotional Intelligence or EQ became 10 years ago, the evidence remains that for jobs that require a level of complexity, intellectual grunt is the single best predictor of job performance.

This is not to say that to be effective we all need to be rocket scientists but a minimum standard of intellectual capacity is required to firstly – deal with complexity and secondly, learn quickly.

For roles that require fast learning, independent thought, dealing with smart clients or numerous first time situations, cognitive ability is a must have as part of your recruitment tool kit.

Fact #4 – The cost of a bad hire is up to 3 x their base salary

Finally, what does this all cost and is it worth it!

Considering that the cost of a poor hire is up to three times their base salary (and more if you are in client facing or sales roles) at what point is it worth investing?

My personal view of this is that all roles should use psych testing no matter how junior. However, there are a few things needed in order to get this right:

  1. Make sure you are using the right tests for the role
  2. More senior or high-risk roles should always have the support of an Organisational Psychologist to explain the nuances around the interpretation. It is the expert interpretation of data that makes a difference – reading a computer generated report will not provide a high level of predictability.
  3. The cost should be reflective of the level of role and hence the impact of making a poor hiring decision.

If the right choices are made, psych testing will provide you with a wealth of information on how to motivate and manage a new hire, their probability of success in the role and how well they will fit your desired company culture.

Much of this information can’t be gleaned from an interview – just ask anyone who has ever made a hiring mistake!

For more information or help, contact Talent Code on 1300 559585 or info@talentcode.com.au

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