Proving ROI with Testing and Assessments

by Julie Labrie on March 22, 2012

Interview with Mark Fitzsimmons, President of Psychometrics Canada

Consider this: when hiring someone with an annual salary of $30,000, it can cost up to half of that, $15,000, to actually bring them on board. Moreover, the cost of losing an employee can cost up to three times their salary. So of course, finding and retaining happy, high-performing talent must be a top priority when considering a company’s bottom line.

We had the privilege of sitting down with Mark Fitzsimmons, President of Psychometrics Canada, to discuss the return-on-investment of personality, leadership, career and succession planning assessments. For many of our client, this is an important part of our recruitment process, so we thought we’d share some of Mark’s insights here:

Q: How can a hiring manager quantify the value of psychometrics to today’s C-suite (CEOs, CFOs, etc.)?

Image courtesy TWMedia on Dreamstime.Com
In many European countries such as the UK, psychometric assessments for pre-employment testing is the norm. If you want a job, you know you’ll have to take an assessment test.
Image courtesy TWMedia on Dreamstime.Com

A: First off, almost any organization can use pre-employment tests, whether they are hiring just one person a year, or thousands of staff per year. Psychometric tests can be used to address safety issues, high turnover, barriers to increasing sales; they can compare star performers against average performers to establish critical benchmarks. Such problem-solution focused assessment strategies can help quantify the value of specific organizational priorities – e.g. how much money will the company save if safety vulnerabilities are addressed, or if employee retention increases.

Psychometrics can help an HR or hiring manager drill down and measure exactly who and what an organization needs quite accurately. There are 3 key steps to this process: 1) determining critical job success factors; 2) selecting appropriate assessment tools; 3) confirming when to administer those tools – e.g. cut scores against all applicants, or administer assessments for those in high stake positions only, etc.

Initial investments can range from as little as $10 per candidate on some assessments, up to $2,500 for a full battery of in-depth, customized tests. If this process can help you find staff that will want to stay longer and perform better at work, or – if you can even prevent one bad hire, this process pays for itself and then gives back more to the company’s bottom line.

Q: Can you share an example of where the use of psychometrics helped solve a key business problem?

A: Sure. We worked with one high end West coast resort that was in quite a remote location (travellers had to fly or sail into the resort), so its entire business was based on a very short spring/summer season. Given its premium offering, there were extremely high levels of service expectations on seasonal staff. The company invested heavily in employee training, but in high-pressure environments, where coworkers were working in very close quarters, staff turnover was becoming a critical issue. The resort simply didn’t have the time to find the right candidates to “back-fill” positions. It was clear that getting the right person up front during the hiring period was key. So we developed a program where the resort used a number of our assessments – to determine worker reliability, whether they are likely to stick around for the summer, their affinity to long term job commitment, and their instinct for conscientious and courteous service to high end customers. Their upfront investment into the use of psychometrics is helping them hire and retain the right employees year over year now.

Q: From a global perspective, how far advanced or behind is Canada in using psychometrics within the HR practice?

A: Many European countries, such as the United Kingdom are global leaders in psychometric assessments for pre-employment testing. It’s an engrained process within their work culture – if you want a job, you have to take an assessment.

In Canada, while this field is quickly gaining interest, the use of pre-employment tests is not as widespread. However, the assessment coming out of this country are state-of-the-art and are used around the world. As organizations start understanding that the additional insight provided by tests will help them to find candidates who can perform better, learn faster and stay with a company longer, we expect testing to be the norm.

Does your organization utilize psychometric tools? Are you finding it beneficial? We would love to hear your comments!

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