The psychometric test industry is valued at around $1.25 billion, and is growing at nearly 15% year on year. 80% of Fortune 500 companies and 75% of the FTSE 100 use psychometric tests as part of their recruitment and development processes. So what exactly are psychometric tests, how do we distinguish between the different types and how do they help us to recruit and lead more effectively.
What actually are psychometric tests?
The basic principle is to use tests and objective data to determine whether someone will succeed in a role before hiring them or work well with others. They aim to identify the extent to which candidates’ personality or cognitive abilities match those required to perform the role or fit with the team.
Why do companies spend such vast sums of money on gathering more information about candidates?
There is a lot at stake if hiring goes wrong. According to a recent study of 20,000 new hires across 6,000 different companies, 49% of hires fail in the first 18 months, and a failed hire can cost anywhere between 30-200% of a first year salary. When you include the training costs and lost productivity time, the importance of getting it right first time is evident.
When are they used?
Depending on the expansiveness of the tests, they can be used anywhere from filtering candidates at the initial application stage to the final interview when hiring. They can also be used on an ongoing basis as part of a company’s learning and development strategy.
What problems do they solve?
Even the most experienced recruiters aren’t perfect at judging a candidate’s suitability for a role or fit with the team. The traditional assessment methods of submitting a CV and being interviewed, or being referred into the business have a whole heap of inherent biases. These biases are more prevalent when we hire or manage people on intuition alone. Having objective data helps us make more informed and usually more accurate decisions.
What form do they come in?
They fundamentally break down into two key aspects: Aptitude/Competency tests and Personality Tests.
How much do they cost?
Most companies have either a pay as you go pricing model or charge an annual licence to use their tools. Occasionally some providers offer a free trial. Some psychometrics require paid training and certifications to be able to use and understand their insights.
Definition: a test designed to determine a person’s cognitive ability in a particular skill or field of knowledge.
Purpose: to indicate whether a candidate has the skills required to successfully fulfil functional job requirements.
Type of Competency Tests:
Definition: Often known as verbal reasoning tests, these usually involve grammar, verbal analogies and following detailed written instructions. They can also include spelling, sentence completion and comprehension.
Positives: It is a good way to test how well a candidate can take in verbal information and reach sound conclusions. Since tests are timed it aims to understand someone’s ability to think on their feet and work to deadlines. This test is more important for outward facing communication roles.
Negatives: They may discriminate against non-native English speakers and people with verbal learning difficulties such as dyslexia although under these circumstances most providers recommend giving people extra time to complete.
Definition: Often known as numeric reasoning tests, they cover basic arithmetic, number sequences and simple mathematics. They can also be in the form of speed tests to determine your basic numeracy.
Positives: The skills in arithmetic can often be a sign of aptitude for other things, such as computer programming and logic-based vocations. Much like verbal reasoning, it can be a good way of determining how quickly a candidate can process information and of how accurate their work is.
Negatives: While it is important to ensure that people are competent and not lacking the cognitive ability needed to perform well in the job, most jobs don’t require a superior level of numeracy. By using this as a selection criteria, you are potentially missing out on perfectly hireable candidates.
Definition: Abstract reasoning measures your lateral thinking skills or “fluid intelligence”. It measures your ability to quickly identify patterns, logical rules and trends in new data and apply it to solve problems.
Positives: Testing raw intelligence is a good way to measure adaptability and speed to pick up a new skill. This is especially useful for less experienced hires, where the interviewer is expected to learn the skills required to do the job.
Negatives: As with all tests that have little relation to the job at hand, measuring raw intelligence isn’t always an accurate way to predict job competency.
Work Sample tests
Definition: A task or simulation used to test an applicant’s ability to perform in the role. Work samples are widely known to be the best predictors of job performance. Candidates are either briefed ahead of the interview and given time to prepare or briefed on the day with a fixed amount of time to digest the challenge and present back.
Examples: Role specific case studies, presentations, challenges and problems.
Positives: The ability to do the job at hand is the best indicator that someone can do the job. If you are hiring someone who is expected to go straight into the job with minimal training, there is no better indicator for job success.
Negatives: When you are hiring more junior candidates, where training would be required, work sample tests don’t hold up on the same level, as those candidates don’t currently have the experience required to perform the functions of the job, but that doesn’t mean they won’t be the best candidate once trained.
Aptitude Test Providers:
Definition: A personality test is a questionnaire or other standardised instruments are designed to reveal aspects of an individual’s character or psychological makeup.
Purpose: To identify certain traits in a persona that a company sees as valuable. Many organisations are looking for people to hold attractive traits such as “leadership”, “drive” or “integrity”.
Main Types: There are many different types of personality tests available but the main ones are: Myers Briggs, Big 5 Personality Types, DISC Behavior Inventory and Occupational Interest Inventories.
Types of Personality Tests:
History: The Myers Briggs Type Indicator test was created by mother and daughter Catherine Briggs and Isabel Myers in 1921, based on the core principles of Carl Jung’s book: “Psychological Types”.
What it measures: The MBTI test asks people a series of questions to categorise them into one of two options for the following four sections: sensation, intuition, feeling, and thinking. It uses these choices to place people into one of 16 “personality types”.
Why it’s useful for organisations: Although there’s no evidence to suggest using Myers-Briggs can predict the likelihood of a good hire, managers can get valuable information of what motivates a candidate and their behaviours and characteristics.
Big 5 Personality Types
History: The Big 5 Personality traits were first used in the 1970’s, by two independent research teams, Paul Costa and Robert McCrae (at the National Institute of Health), Warren Norman (at the University of Michigan) and Lewis Goldberg (at the University of Oregon).
What it measures: Extraversion, Agreeableness, Conscientiousness, Emotional Stability, and Openness to Experience
Why it’s useful for organisations: Many people believe that you get a more complete picture of a person by using the Big 5. There is a known correlation between one of the big 5 measures; conscientiousness and predicted job performance.
Read more about the differences between MBTI (Myers Briggs) and the Big 5here.
Occupational Interest Inventories
History: The most common OII is known as Holland Codes, which can trace its theory back to the 1959 article “A Theory of Vocational Choice,” published in the Journal of Counseling Psychology, by John Holland.
What it measures: Whether people are: Realistic (Doers), Investigative (Thinkers), Artistic (Creators), Social (Helpers), Enterprising (Persuaders), and Conventional (Organizers)
Why it’s useful for organisations: For companies who are looking to invest in their employees, and help them forge a varied career without having to leave the organisation. OII is primarily used to match people to different types of careers.
Example Report: “Enterprising (Persuaders) People who like to work with people, influencing, persuading, leading or managing for organizational goals or economic gain. Possible careers: Advertising Executive, Advertising Sales Rep, Banker/Financial Planner, Branch Manager, Business Manager, Buyer, Chamber of Commerce Exec” Source
DISC Behavior Inventory
History: The initial DISC model comes from Dr. William Marston, a physiological psychologist, in a book entitled Emotions of Normal People, published in 1928.
What it measures: Dominance, Influence, Steadiness, and Conscientiousness
Why it’s useful for organisations: One of DISC’s most agreeable aspects is that it is easier to understand for hiring managers than many alternatives. By being easier to comprehend, it instantly becomes more memorable, and sticks with people for longer.
History: Combining organisational theory and team dynamics with extensive research conducted with HR directors, candidates and managers ThriveMap launched in 2016. Although not deliberate, ThriveMap measures team characteristics that are well aligned to Google’s 5 keys to team success. Unlike other psychometric tests, ThriveMap doesn’t require a qualification or extensive training to use.
What it measures: ThriveMap isn’t a traditional psychometric test as it measures how people and teams like to work, not who people are. The categories measured are based on how things happen in teams, these are: Decisions, Actions, Relationships, Evaluations, and Progression.
Why it’s useful for organisations: By measuring the way candidates like to work, and comparing this to existing teams, companies are better able to see who would be a fit with the organisation. The best teams are often full of different personalities and backgrounds, ThriveMap enables this diversity by measuring working style not personality.
Well there we have it. Everything you need to know about the candidate testing side of psychometric tests.