Pre-Employment Testing and Talent Assessment.
Making hiring decisions is one of the most consequential aspects of an HR professional’s job. Get it right, and everyone’s happy. Get it wrong, and it can cost up to two times the employee’s annual salary.
The secret to effective hiring is finding the right tools to pinpoint the best new talent while avoiding costly mistakes. Pre-employment testing is one of the best ways to elevate your hiring process and boost your accuracy in finding the right people.
In Part 1 of this series, we provided a general overview of pre-employment testing and highlighted the three essentials: validity, reliability, and compliance to legal standards. These three essentials provide a solid foundation to any successful employee selection process. Part 2 outlined the most common types of employment tests, including the pros and cons of each.
In this last post of our three-part series, I’ll provide practical guidelines for narrowing down the options and deciding which employment test is right for your particular needs.
1. Look for Pre-Employment Tests that Measure Your Key Success Factors
To find the right pre-employment test for a specific job, start by defining the factors (attributes, skills, abilities, knowledge, etc.) that are critical for success in the target position. This will help you narrow down the types of testing available to measure them. For example, if your company is hiring for positions that require specific technical knowledge or professional expertise, a specially designed job knowledge test would be a good choice. If you’re looking for high-performing customer service associates, a simulation of customer interactions would be appropriate. A job analysis is the best way to identify these key success factors. It also serves as a foundation for the legal defensibility of your company’s hiring practices.
Once you know the factors you want to measure, identify the types of pre-employment tests that provide the best measure of those factors, then look at the specific assessments that are available for that test type.
2. Evaluate Relevant Tests Based on the Three Essentials
Now that you’ve narrowed your search to the most relevant options, take a deeper look. The most important aspect when evaluating tests is to see how they stack up in terms of these three essentials: validity, reliability, and compliance to legal standards. And it’s not enough to simply ask, Is this test valid? or Is this test reliable? The answer from test vendors will always be, Yes! The real issue is the degree to which a test is valid, reliable, and compliant. So instead, ask to see documented evidence. And don’t worry. You don’t need to take a crash course in statistics. Just use the easy guides below to evaluate the tests on your list.
According to the U.S. Department of Labor, “Validity is the most important issue in selecting a test.” Validity simply means how accurate the test is in measuring what it is designed to measure. Some types of validity can be statistically measured using a validity coefficient. As a general rule, the higher the validity coefficient, the more accurate and beneficial the assessment. The U.S. Department of Labor provides these guidelines:
Above .35 Very beneficial
.21 to .35 Likely to be useful
.11 to .20 Depends on circumstances
Below .11 Unlikely to be useful
To see how specific test types measure up, check this validation comparison chart based on data from the U.S. Office of Personnel Management.
Pre-employment tests must also deliver consistent results. When tests are reliable, the results maintain consistency across administrations.
“Test developers have the responsibility of reporting the reliability estimates that are relevant for a particular test. Before deciding to use a test, read the test manual and any independent reviews to determine if its reliability is acceptable. The acceptable level of reliability will differ depending on the type of test and the reliability estimate used.” – U.S. Department of Labor
Compliance and Adverse Impact
Test developers should document that the test is legally compliant. There are several standards that must be met for a test to be legally compliant, which are detailed in the Uniform Guidelines on Employee Selection Procedures. Check the developer’s documentation to determine if these standards have been met.
The Uniform Guidelines also provide a set of standards to help determine whether a test causes disproportionate adverse impact. Adverse impact is defined by the EEOC as a substantially different rate of selection in hiring, promotion or other employment decisions which works to the disadvantage of members of a race, sex or ethnic group. SHRM offers this helpful explanation of the EEOC’s 4/5ths rule:
“To determine whether a selection procedure causes an adverse impact, the “4/5ths rule,” or 80% rule, can be applied. This involves comparing the hiring rates for different groups. If the selection rate for a protected group (defined by race, ethnic origin, sex, etc.) is less than 4/5ths (or 80%) of that for the group with the highest selection rate, the procedure is considered discriminatory.” – SHRM
If a vendor can’t provide strong evidence of validity, reliability, and compliance to legal standards, cross their test off your list and move on.
3. Compare Remaining Tests Based on Practical Considerations
Now it’s time to focus on the practical aspects of testing including logistics, administration, cost, and ongoing support. These final considerations will help you narrow the remaining options to find the best fit.
These questions will help you further define your needs:
- How many positions need to be filled?
- How many applicants are likely to apply?
- Where will the screening take place (onsite or remotely)?
- When do the open position(s) need to be filled?
Administrative requirements vary widely based on the type of assessment. These are things you’ll want to know:
- How long does it take to get the testing solution up and running?
- What is the testing format (e.g., paper and pencil, PC-based, mobile-friendly)?
- Do you need a dedicated space for testing, or can candidates complete the process remotely?
- How long does it take to administer, score, and apply the results?
- What internal staff and equipment resources are needed?
- Do test administrators need specialized training or certification?
- Does the assessment easily integrate with your applicant tracking system?
Selecting a pre-employment test is an investment to your organization. You may be asked to justify your choice. Is the testing cost-effective? Will the test result in a positive return on investment? Here’s what you’ll need to include in your costs calculation:
- Purchase price. Costs vary widely based on the type of test and whether it’s developed in-house, customized through a consulting firm, or purchased user-ready.
- Administration costs. Does the testing require special facilities and supplies? How much staffing is needed? Will the staffers require training? These costs must be factored in.
- Return on investment. Calculate the cost of the testing and compare it to the financial impact of increased productivity/performance and decreased employee turnover.
- Value added. Not to be overlooked, be sure to consider any extra value the testing can bring, such as providing a realistic job preview to applicants, diagnosing employee training needs, generating employee onboarding plans, etc.
And you can’t forget the importance of ongoing support from your HR consultant or test creators. Before signing a contract, find out:
- Does the testing solution include customer service and support?
- Will you have access to the test developers if you have questions?
- Are User Guides included for future reference?
- What analytics services are offered?
- Does the vendor monitor performance of the assessment over time?
- Do they provide EEO information related to adverse impact?
With these key elements for selecting the right pre-employment test well in hand, it’s time to get started! I’m including a quick checklist to make the job even easier.
How Can We Help?
If you have questions about pre-employment testing, or would like advice about the best way to get started, Employment Technologies is here to help. With more than 30 years of experience designing, implementing, validating, and supporting pre-employment testing solutions, we welcome your call.
Maurie Jones is an Industrial/Organizational Psychology consultant from Orlando, Florida. She has spent more than 30 years in the industry designing, developing, and administering employment and promotion tests and systems. Her clients have included Fortune 500 organizations, financial institutions, law enforcement and fire agencies, and many others.