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December 12, 2017

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Myths of Psychological Testing for Candidate Selection

Business executives who choose not to use pre-employment psychological testing in their hiring processes cite a number of reasons for their decisions. Unfortunately, four of the most common objections we hear are based on myth instead of reality. These are 1) "we'll be sued;" 2) "it costs too much;" 3) "it takes too much time;" 4) "it doesn't work."

This article sheds some realistic light on these myths to illuminate how integrating pre-employment testing into your hiring process can increase retention and productivity, as well as decreasing the likelihood of employment practices lawsuits.

Myth #1 - "We'll be sued."

Of course, anyone can be sued for anything. However, the proper use of testing as a selection tool actually reduces the likelihood of being sued for the following three reasons:

  1. The selection process is fairer. Personal biases of interviewers often lead to discrimination claims. Because validated tests do not discriminate according to age, sex, and race, using them can reduce subjective biases, making the process fairer for all candidates.

  2. It helps companies comply with federal requirements. The EEOC requires companies to use "best reasonable efforts" to remove biases from their hiring process. The use of an objective validated test helps companies comply with the federal requirement.

  3. You don't hire "problem employees." The greatest risk to an employer is hiring the wrong person. In the best case, the person simply doesn't work out and leaves, a costly scenario. In the worst case the person steals from you or harasses or injuries someone. The liability risks from hiring the wrong person are much greater than the risk of being found liable for not hiring him or her in the first place. If testing helps you make better hiring decisions, you are simply less likely to be sued!

A review of the lawsuits over pre-employment testing proves this conclusion to be true. I have been unable to unearth a single court case where a company was found liable because of pre-employment testing when the test was designed and validated as a selection tool and validated to have no adverse impact against a protected class.

Myth #2 - "Pre-employment testing costs too much."

As with any business decision, a company must weigh the costs verses the benefits when conducting pre-employment testing. Most psychological pre-employment tests range from $25 - $200 per use. Most HR professionals would agree that the cost of a bad hiring decision which results in turnover is at least twice the person's salary when you factor in lost opportunity, decreased productivity, recruitment, and administrative costs. Besides the obvious costs of making a bad selection decision, a good hiring test can also significantly reduce the costs to prepare for an interview and train new hires that are more suited for the job, company culture, and manager's style.

For every dollar an employer invests in personnel screening, the savings range from $5 to $16 in reduced absenteeism, improved productivity, lower turnover, safer working environments, reduced insurance premiums and decreased employer liability.

It will be far less expensive to defend your use of a proven, reliable, and valid test than to defend hiring practices that do not include objective, nondiscriminatory testing. In addition, it's far less expensive to use testing to ensure you hire an employee that will be more productive immediately than to pay your managers to oversee problem employees and engaging in a revolving door recruitment process.

Myth #3 - "It is too time-consuming."

There are many tests on the market than take anywhere from 10 minutes to over 2 hours to complete. Some require an administrator while others do not. However, there are some very good tests that can be completed in 15-30 minutes time, and can be administered via the Internet and completed at home by the candidate. Depending on the level and type of position you are trying to fill some of the quicker tests will meet your needs.

As for the feedback such tests provide, an effectively designed interviewing and selection report substantially reduces the time needed to train interviewers and prepare and conduct an interview for the following reasons:

  1. An effective interviewing report will provide recruiters and department managers guidance on key strengths and weaknesses of the candidate to allow them to focus their valuable time on the critical areas necessary for success in the respective role/position instead of focusing their interview time on less critical areas.

  2. An effective interviewing report will provide suggested interview questions that are legal to ask in an interview.

One executive who currently utilizes a psychological pre-employment testing program sums it up this way: "It actually expedites our interviewing process tremendously by assisting us in cutting to the chase in determining a candidate's strengths and weaknesses. The candidate profile and interview guide gives our managers the help they need to conduct a probing and revealing interview while requiring less preparation time" (David Baker, President - Apex Capital).

Myth #4 - "Testing doesn't work."

More and more companies are utilizing some form of psychological testing for more consistent and accurate hiring decisions. In a recent survey, 40 percent of Fortune 100 companies indicated that their employment selection systems included psychological testing. A similar survey by the American Management Association showed that 44 percent of its responding members used testing to select employees.

In talking with a human resources director of a large franchiser of Group 1 Automotive, a Fortune 500 company in Houston, here's what she had to say about the psychological test they use for selection: "Historically, our industry experiences extremely high turnover, and as such we have been looking for a tool to help put the right person in the right job. Since we began using a psychologically based selection tool to help in our sales selection process, our retention has jumped from 10% to 77%, which we have calculated saved us $32 Million over the past twelve months in related turnover and lost opportunity costs," (Regina Roat, HR Director - Sterling McCall Toyota).

If 40 percent of the Fortune 100 companies utilize some form of psychological testing for pre-employment screening, there must be some evidence it works otherwise they wouldn't spend the money.

Conclusion

With recent events placing a renewed emphasis on security and corporate ethics and values, it's more important than ever to use all available resources to screen potential employees. Companies are now realizing that the time and money spent on a properly conducted pre-employment screening program can help ensure a safe, secure and productive workplace, while expediting their selection process.

-Mike Poskey
Vice President of ZERORISK HR, Inc., a Dallas-based human resources risk management firm. For more information, visit www.ZERORISKHR.com or email Mike at Mike.Poskey@ZERORISKHR.com