Vol 46: Issue 2 | July 2023
- Psychometric tests can be a useful recruitment tool to discern a candidate’s abilities, characteristics and preferred ways of working.
- Psychometric testing should be used in conjunction with other forms of assessment, such as interviews and reference checks, to ensure fairness and objectivity.
- There are many types of psychometric tests, and recruiters must ensure they select a reputable provider and use the right test for their needs.
If you’ve ever sat a psychometric test, you’ll know exactly why it might not tell an employer everything about a candidate, especially in relation to their long-term potential.
“Psychometric tests can provide valuable information about a candidate’s abilities and characteristics, but they should be used in conjunction with other forms of assessment — interviews, reference checks, work samples — to get a complete picture of the candidate,” says Dan Marsh, managing director of insurance recruitment company Blake Oliver.
A scientific approach
It’s important to note that while the terms ‘psychometric test’ and ‘aptitude test’ are often used interchangeably, they are not necessarily the same thing.
“Think of psychometric tests as an umbrella term for a number of different types of tests,”
explains psychologist Jenny Simonovska, director of Plum Consulting. “Aptitude [or cognitive] tests predict someone’s ability to reason using language or numbers. Behavioural or personality questionnaires — depending on the assessment used — can give you information about a candidate’s strengths, motivators and preferred ways of working.”
Marsh adds that aptitude tests specifically measure a candidate’s potential for learning and applying new skills.
“They are often used in educational settings to assess a student’s readiness for a particular course of study or career path,” he says.
“While there is some overlap between these two types of tests, it’s important for companies to understand the specific goals and outcomes they’re looking for when choosing which type of test to administer.”
Whichever type of assessment is chosen, Marsh offers some further advice for recruiters: “Ensure that the testing is conducted in a fair and objective manner.”
Part of the bigger picture
At ANZIIF, SACS Consulting administers psychometric assessments and conducts cognitive ability, values and personality testing during the recruitment process.“Psychometric tests are used alongside behavioural-based interviews and reference checks to determine the likelihood of a candidate being successful in the role and if they will be the right fit,” says ANZIIF head of People and Culture Veng Lim.
The assessments are completed by the candidate after the initial interview and prior to the second interview.
“This allows us to probe the cognitive areas that are key for the role and that the candidate scored low in, or were areas of concern in the values and personality tests,” explains Lim.
She stresses that psychometric assessments are just part of ANZIIF’s broader recruitment process, and decisions on a candidate’s suitability are never solely based on the results of those assessments.
Similarly, Insurance Brands Australia does not use psychometric tests to qualify candidates, according to the organisation’s head of talent Athanasia Corso.
“The role of behavioural testing is purely to ensure we, as an employer, are best informed to set the new employee up for success,” she says.
“We seldom use tests and only ever after making the appointment in executive roles where the candidate might have multiple direct reports or be juggling a relatively large and diverse remit.”
Corso adds that psychometric tests are used to help Insurance Brands Australia leaders uphold their commitment to their team and to support all employees to best utilise their skills.
“They [the tests] will not tell you someone’s potential, if they have company-aligned values or how they show up to work each day,” she says. “Recruitment is no longer about ticking boxes and how someone scores in the selection criteria — and thank goodness for that.
“We are proud of the safety, inclusivity and diversity that underpins the culture at Insurance Brands Australia, and this is why we’ve taken this position on the use of psychometric testing in our recruitment process.”
Bespoke development for specific groups
Great Eastern Life (GEL) Asia takes a different approach. The multinational commissioned Aston Business Assessments (ABA) to develop standardised assessment tools in English and Mandarin, rather than an ‘off the shelf’ solution.
ABA, a company that specialises in the bespoke development of psychometric tests, notes in its case study that the tools GEL required needed to be suitable for different respondent groups and flexible for use by multiple stakeholders.
“ABA’s brief was to develop psychometric assessments of key strategic competencies and personality traits in order to help GEL recruit their agency sales force and leaders in Malaysia and Singapore with complete confidence,” the company writes.
“For the recruitment of agency leaders, a more detailed assessment and customised development report (the Great Eastern Manager Search) was created, which included specific development actions and solutions, and a prioritised development plan.”
For the recruitment of the sales agency teams, ABA worked with GEL to develop a five-minute assessment — the Great Eastern Talent Search — with reports presenting competency scores, recruitment recommendations and interview questions.
They also took up the challenge of creating a one-minute version of the assessment for use at recruitment fairs.
Following the banking industry
According to Marsh, the banking industry commonly uses psychometric tests, and he expects the insurance industry to follow suit.
“Although not many of our own clients are utilising them, the use of psychometric tests in insurance recruitment is definitely happening as we do see it from time to time,” he says.
“There is more [psychometric testing] than in previous years prior to talent shortages in the insurance industry.”
From what Marsh has seen, the use of psychometric testing varies depending on the size of the company.
“Larger insurance companies use psychometric testing more frequently as part of their recruitment process, while smaller companies don’t necessarily have the resources to do so,” he says.
“[Testing] is becoming more common as companies are looking for ways to improve their hiring processes and select candidates who are more likely to succeed in the role.”
Simonovska, who has worked in a broad range of organisations that use psychometric tests — from manufacturing and mining services to insurance and finance companies — says most often they’re used for development purposes.
“For example,” she says, “they may be used as part of a leadership development or talent program to provide self-insight and act as a springboard for coaching. Any organisation that has a competitive graduate selection program is also likely to incorporate some psychometric testing to ‘sift’ through large numbers of applicants.”
Simonovska believes that when used appropriately, psychometric testing has very few drawbacks — but she can understand why others may be wary. “Some people may have had an off-putting experience with psychometric tests in the past and may require some reassurance that the test will provide meaningful information and the results will be treated with sensitivity.”
Further to this point, she says it’s important to understand the intended use of each psychometric test. The Myers-Briggs Type Indicator, for example, should not be used for selection, as it is not a predictor of performance.
“Never interpret psychometric tests beyond their intended use and be clear about the limitations of different tests when choosing them,” counsels Simonovska.
Value in the longer term
Marsh says that outsourced tests can be costly, but they can save time and money by improving retention rates.
“Less staff turnover results in fewer hiring costs and reduced training costs,” he says. “When you hire people who are a good fit for the role and culture, they’re more likely to have job satisfaction and stay at a company longer.”
Lim agrees that while there are benefits in conducting psychometric tests, it is important to weigh up value versus cost and use them in conjunction with other processes when making hiring decisions.
“We are currently reviewing our recruitment processes, but is likely that we will continue to use [psychometric tests] as part of our broader recruitment processes,” she says.
More generally, Marsh thinks it’s likely that testing will become increasingly popular in the insurance industry, given current talent shortages and the emphasis on data-driven hiring practices.
“I think the popularity of psychometric tests will continue to grow in the future, particularly for senior roles,” he says. “But their effectiveness and ethical implications will need to be carefully considered and addressed in order to ensure they remain a valuable tool in the recruitment process.”
Pros and cons of psychometric testing
- Tests can find the best candidate for the role based on personality type, which is advantageous to those who don’t necessarily interview well.
- Combined with a behavioural interview, they can be a strong predictor of future individual job performance and fit.
- They can reduce any potential bias.
- They can improve retention rates, because you hire the right candidate for the role and company culture.
- Candidates may respond to questions — particularly in the personality and values tests — in a way they think they should, rather than in a way that truly reflects what they believe.
- The tests can create anxiety for the candidate, impacting the results and masking the candidate’s capabilities.
- For organisations that do not have a trained adviser to assess the results, there are additional costs to engage a qualified assessor.
- Tests can provide very black and white responses, but real life isn’t always that rigid.
- Relying solely on test results ignores intuitive feelings about a candidate.
- It is possible to use the wrong type of test for the intended outcome.
- Test results can be misinterpreted by managers who are not trained assessors.
Can candidates ‘beat’ a psychometric test?
Robust psychometric assessments are difficult to outsmart, though it’s “technically not impossible”, according to psychologist Jenny Simonovska from Plum Consulting.
“Ability or aptitude test results are unlikely to change significantly over time, but it is advisable for candidates to do the practice tests before the actual assessment, to familiarise themselves with the format,” says Simonovska, who has worked in a broad range of organisations that use psychometric tests.
Behavioural and personality questionnaires often use a forced-choice or ipsative format, where the candidate must choose or rate a statement from a number of options. For example: “Which of the following four statements is most like you?”
The tests include some repetition (similar statements appearing in different combinations), and they often provide combinations of statements that force the candidate to say something positive or negative about themselves.
“Most people who think they can ‘outsmart’ the questionnaire realise early on that it’s going to be difficult,” says Simonovska.
“The tests actually report on how consistently you answered the questionnaire too, and provide a score for interpretation by the trained assessor.”
How to choose the right test
There are many psychometric tests on the market, so how do you choose the best one for your needs? Corporate psychologist Jenny Simonovska offers some suggestions.
- The best psychometric assessments to use are ones that are:
• valid — does the test measure what it says it measures?
• reliable — if my candidate completes this assessment today, will I get the same result if they complete the assessment next week, or if someone else sends them the instructions?
• relevant — don’t use a numerical reasoning test if numerical reasoning is not going to be a strong predictor of on-the-job performance.
- Look for test publishers who share their reliability and validity data
Robust psychometric assessments take years to develop, and when reliability and validity are high, test publishers proudly promote this information. Be wary of test publishers who can’t or won’t provide this information.
- Choose a test that has relevant comparison or ‘norm’ groups
To make sense of a raw test result, we need to compare the result to a meaningful benchmark. For example, if a candidate scored 35/40 on a numerical reasoning test designed to measure financial literacy at senior leadership level, what does it actually tell us? If we compare that result to the average result on the same test completed by recent graduates, we might think the result is above average, because the average raw score for graduates is 30/40. However, if we compare it to a group of senior leaders, we might find that their average raw score was 35/40. So, our candidate’s financial reasoning is similar to most other senior leaders.
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