It’s an employee’s market. With U.S. unemployment at record lows, employees have more choices than ever before when searching for a new job. Hiring organizations are sourcing talent in labor markets with intense competition with more than six million job openings currently listed in the United States. This makes attracting talent difficult for recruiters: there are just not as many people looking for jobs in the current labor market as compared to 4 or 5 years ago.
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Hiring organizations must capitalize on the available talent that does enter the candidate pipeline. This pressure creates a heavy burden on HR resources to attract, evaluate, select, onboard, and train new people. Oftentimes, it becomes tempting to drop the evaluation stage of the process out of a concern that the organization cannot afford to cut anyone from the process.
There is often a knee-jerk reaction to make the selection process “easy” and eliminate any step that leads to spending time cutting candidates who do not fit. This is a very logical reaction, but is it the right strategy for the business or for the candidates?
It is true that it is critically important to maintain or build an engaging employment brand, but it is not necessarily the right strategy to eliminate assessments that evaluate whether a person is a fit for the organization or the role he or she is being considered for.
Why should I continue to use assessment to evaluate talent when candidates are so hard to attract?
Turnover Is Costly
The most expensive line item on any company’s profit and loss (P&L) sheet is human resources. Turnover costs money, low productivity costs money, and paying the wrong people costs money. It is simply the case that regardless of market conditions, hiring the “wrong person” is one of the most expensive mistakes an organization can make.
While the current labor market makes candidate attraction more difficult, the costs of hiring anyone who applies can negatively impact the business for years to come. Not only will they perform poorly or turn over, but also, those who stay can create a negative force in the culture that will reverberate into the future, even when the labor markets shift back to a more favorable selection ratio. Sometimes the damage created from hiring ill-fitting candidates can create culture problems that take years to correct.
Candidates Want to Work for a Company that Wants Top Talent
Top candidates do not want or expect to be just given jobs. Applicant reaction research has illustrated that top candidates prefer to work for companies that want to hire top talent. Most people do not like working with people who are less competent or whom they do not respect.
Providing candidates with a data point by assessing them seriously, as opposed to letting anyone in the door, demonstrates that your organization values talent as an important component of success. Demonstrating your concern for talent in the selection process can impact whether the best candidates in your pool remain interested in joining your organization if given a job offer.
Providing the candidates with the opportunity to show their stuff gives them confidence that:
- Your employment decisions are fair, and
- You value bringing in the best—a talent measurement process sets the tone up front that your organization prioritizes effectiveness. This is a prerequisite step in building a high-performance culture.
Candidates Actually Do Want to Take Tests
The understandable and often expressed concern from recruiters in the current tight labor market condition is that candidates will not take tests or will go to other organizations without assessments. This is a logical concern; however, it is not correct—or better stated, it is not supported by data.
Researchers have convincingly observed that the data simply do not support the conclusion that candidates react negatively to assessments in the current labor market. In support of these findings, consider the following observations:
- The assessments provided by PSI often have a 98% completion rate in most client implementations.
- PSI applicant reaction data highlight that the assessments left them with a more positive view of the organization.
- There has not been an observable drop in quality of candidate or a change in distribution in the candidates that complete assessments. If recruiters were correct that top candidates gravitate to positions that are “easy” to get, it would show in assessment results. If this assertion was true, there would be a lower proportion of high-quality candidates across PSI’s client base, and PSI has not seen the proportion of high to low quality candidates change in any labor market, any industry, or any job.
Simply stated, while the concern is rational, there is no data to support the notion that top candidates are turned off by assessments in any systematic trending or meaningful way.
Assessments Offer Insight into How Valuable a Candidate Is
There is value in understanding whom you are getting. The tight labor market does create challenges, and there is a business need to fill positions with fewer candidates. In these conditions, it is important not to “throw the baby out with the bathwater,” but it is often important to adjust your test interpretation strategy.
If the selection ratio (number of candidates/number of positions) does not allow an organization to differentiate as much as it has under more favorable labor market conditions, there are times when business need dictates relaxed standards—sometimes even using an assessment to inform interview data collection and onboarding feedback rather than as a hard cut in a multiple hurdle process design.
In tight labor markets, sometimes it is a useful strategy to adjust standards to meet business needs but still use the assessments to inform interviewers and to help develop new hires who may not have the ideal profile.
This strategy has several advantages over removing steps from your hiring process:
- Continuing to use the assessment allows you to maintain consistency—This approach has compliance advantages, and it allows you to “tool up” more easily when the labor market shifts, as it inevitably will. By keeping the assessment in the process, you will know exactly how to use it to make good business decisions as the labor market conditions shift.
- Increasing utility at later stages in the process—Oftentimes, one of the biggest value-adds of short, top-of-funnel screening assessments is that they allow interviewers further downstream in the process to understand areas to probe during interviews. Using an engaging assessment experience not only helps candidates react positively to the organization, but even if you don’t cut anyone, it also helps interviewers focus on the important areas they need to capture during the interview process to make the most accurate determination of fit.
- Capturing individualized onboarding data—If business needs dictate that you must relax standards, it is much better to know what you are getting than to not measure people’s strengths and developmental opportunities at all. The preemployment assessment can help inform the business where a new hire’s developmental needs are. This information is useful if an organization is to make “lemons into lemonade.” By using the assessment to inform the hiring process, but also to transition and develop in the onboarding and early socialization stages, organizations can get a tremendous return on investment (ROI) from using assessments even in challenging talent markets.
Final Thoughts
Ten years ago, employees held on to the jobs they had out of necessity. Today, those same employees have a range of employment options when examining the best fit for their needs. While jobseekers and employees may hold all the cards, organizations looking to hire and retain the best candidates are not entirely subject to employees’ terms.
Organizations should continue their assessment programs or with improvements and adjustments as needed, but they should not eliminate capturing these important data in their process. While removing assessments from the hiring process may seem logical when the employees hold the cards, doing so can often lead to more negative outcomes than it resolves both for the hiring organizations and the candidates who apply.
| Ted Kinney, PhD, is the Vice President of Research and Development at PSI. An industrial/organizational psychologist, Kinney leads a team of selection experts and developers in the creation and on-going research into the most efficient and effective selection methodologies and tools. He has particular expertise in behavioral interviewing, turnover reduction, effective selection strategy, and executive assessment. | Ted Kinney LinkedIn | PSI LinkedIn | PSI Twitter |