The Intrinsic Value of Pre-Employment Assessments

Companies spend many millions of dollars on core business functions, such as product development, customer acquisition, and service delivery.  These focuses are obviously critical for success; however, often overlooked is another element that is just as vital to an organization’s short-term and long-term success, qualified and proficient employees.

Anne Mulcahy, former CEO of Xerox Corporation and a recognized business leader, said it this way, “Employees are a company’s greatest asset – they’re your competitive advantage.  You want to attract and retain the best…”  Companies focused on growth must develop a comprehensive strategy and be willing to put forward substantial investment in the area of new hire screening and selection.  It cannot be an afterthought.

Adequate and properly focused pre-employment screening and assessments are an important aspect in selecting the best candidates for a position and has been proven by multiple studies to translate into monetary value.  These can include versions of the following: Talent Assessment Test, Cognitive Ability Test, Integrity Test, Personality Tests, Emotional Intelligence Tests and Physical Exams.

The concept of pre-employment assessments is nothing new.  You will find its roots in the primitive imperial examination in China during the Han Dynasty (206 BC – 220 AD), which involved an archery contest, or horsemanship as well as an oral examination on policy issues.  These were gradually expanded to include music, arithmetic, writing, military strategy, civil law, revenue, and taxation, as well as geography.  By the time of the Song Dynasty (960 AD – 1279 AD), these tests were institutionalized and were regarded by historians as the first standardized tests based on merit.

European missionaries and diplomats brought these testing concepts back to Europe, where they were implemented in companies, such as the English East Indian Company, a large global trading organization.  By the late 1800s, employment testing techniques were being adopted in both the British and US marketplaces.  Clearly, throughout history, civilizations, governments, and companies have recognized their value in securing top-talent.

On a practical level, assessments beyond the basic resume review and standard interview provide vital insight, which is difficult to observe through any other means.  These fall into two specific areas:

They gage the ability of the candidate to complete the tasks required in the position. 

Beyond the verbiage of a resume, you are able to see the actual ability and skill, which directly relates to the position and ultimately reduces training time and costs.  A few examples of things that can be measured are communication skills, computer skills, typing ability, proficiency on specific software packages, decision making abilities, hands-on ability to work with small parts, etc.  These assessments are often standardized and provide metrics or comparative data across multiple candidates.

They allow for enough time to be spent with the candidate to truly understand what makes them tick. 

When it comes to assessing the intangibles that often determine employee success or failure, time is your friend.  The difference between what can be observed in a 30 minute process and a 2 hour process can be substantial.  These include productivity, reliability, motivation, ability / willingness to follow directions, competitiveness, quality focus, ownership, leadership qualities, and overall attitude.

Some companies are resistant to assessments and extended recruitment processes due to the costs associated with such an endeavor.  These concerns are understandable, yet one must consider the innate costs of hiring the wrong candidate, which can include replacement and re-training costs, reliability downtime, and potential morale problems, which not only affect the productivity of the new hire, but the team in which they are placed.  The benefits of focused and sufficient assessments far outweigh the drawbacks.

Bob Lanza from Sales Team Solution LLC says it this way, “It’s expensive to hire. Why not use every tool possible to stack the deck in your favor?”  I would propose that it is much more expensive to hire the wrong person.