Psychometric Testing in Recruitment – What a Complete Waste of Time?

Let’s be honest, lots of psychometric testing is a load of old rubbish used by inexperienced, inept, ignorant recruiters who have little real world business experience.

Used sparingly it can of course complement real world expertise, but it can’t replace it.

Can you do a better job selecting your own staff than a 25-year-old backpacking psychometric test wielding recruiter can do? Of course you can.

But, and this is a big but (that is not a gag), are you perfect at picking staff? I wonder.

Let’s consider just 3 of the many challenges involved in recruitment.

1. The True Cost of Hiring

The total cost of recruitment includes clearly visible direct and indirect recruitment costs. These costs are fairly easy to quantify; your time, recruitment fees, induction and training expense.

More important, because they can be far larger, are the hidden costs of appointing the wrong candidate. How long will it take until you realise the error, how much opportunity loss will you suffer, how much customer relationship damage will be done, how will it affect your business?

We once came across a business where the, Sydney based, CEO waited 12 months to make the decision to remove and replace a senior executive even though he knew that the person was grossly ill equipped for the role. He then appointed the wrong hire, took 9 months to realise the mistake and another 6 months to replace the person. All up there was at least 2 years of unnecessary time without the appropriate person in what was a very senior role. The cost of this foul up? Who knows but certainly over a $1m in lost financial performance.

So let’s all acknowledge that the true cost of a wrong hire can be very significant for your business.

2. Just Find Another You – The Interview

A risk with interviews is that we all can subconsciously select people like us regardless of the role requirement. We have so often walked into organisations where there are 5 or 6 senior managers with the same attitudes, outlooks and backgrounds; that may make for a happy Christmas party but may not be ideal for the ever evolving needs of your business.

We also tend to overestimate our own ability to conduct the interview, understand the candidate and make the appropriate selection. That of course is just human nature. I once read in a study that 90% of Swedish drivers thought their skills were above average. That study is referenced by phycologists to illustrate the “overconfidence phenomenon” whereby emotionally healthy, competent people tend to overestimate their ability as being above average. Those traits can be viewed as admirable in some settings but not ideal when they lead to unskilled interviewers selecting the employees you rely on in your business.

Whether it is a CEO, CFO or line manager conducting the interview another danger is, as Mark Twain so elegantly noted,

“It ain’t what you don’t know that gets you into trouble.  It’s what you know for sure that just ain’t so.”

We feel sorry for the Line Manager, untrained in interviewing, not using a structured approach, performing interviews on an irregular basis. He will believe his or her interviews add value. Unsurprisingly, research and plain simple common sense suggests, he will probably not choose the right candidate.

The whole short list, interview and reference checking process is not just about whether the candidate has experience for the role as it was but also the skills and attitude for the role over coming years. We must not fall into the trap of being anchored in the past; unless of course we are happy for our business to follow a similar path.

We often joke that a resume is a ‘litany of lies’. They are often more aspirational than factual. This can be tested through structured interview questions and putting referees on notice (using a very nice manner of course) that we are taking detailed notes.

A skilled, trained interviewer performing a structured interview improves outcomes and confirms cultural and ethical fit. Resumes need to be challenged, analysed and verified.

Throughout the interview, and reference checking, process skill is needed to pries open the facts and ensure the appropriate candidate is selected.

If approached properly, by people with the necessary skills and experience, interviews are an excellent tool to secure the best candidate for your business.

3. The value of paying up for high performers

The dramatic value difference between high performers and laggards is hidden by the use of ‘averages.’ We have recruited salespeople who managed 20 appointments per week when the existing team average was 5 (yes they managed the same or better percentage close rates). We have personally experienced IT programming productivity variations of at least tenfold.

The Pareto principle, otherwise known as the 80/20 principle, details that 80% of the results will come from 20% of the people. The lesser known cousin is the 50/5 principle, which suggests that the bottom 50% will be responsible for only 5% of value creation.

It is easy to see how a strategy to only employ and retain the high performers could deliver a dramatic improvement in results. It creates a virtuous circle, where above average rates can be paid to attract and retain the best, productivity rises and business value dramatically increases.

The Psychometric Test Wielding Recruiter

Given the challenges discussed above we reckon there is little benefit in using a psychometric test wielding recruiter.

Our view is that your focus should include careful consideration of:
• The true cost of making bad recruitment decisions
• The benefit of ensuring interviews are conducted by experts
• The value of employing high performers

That may be bad news for legions of backpackers, just off the boat in Sydney, but good news for you and your business.

For a discussion on how we could help you recruit your next senior appointment, please call either Tony Holley on 0417313136 or Michael Mahoney on 0410 285 318 anytime, we understand these conversations can be difficult to have during business hours.