When she made a job offer to the bright, witty, and technically knowledgeable database administrator, an IT manager of a major insurer and financial services provider thought she’d performed a staffing coup. But time proved otherwise.

The first duty for the new hire was to do an interim conversion related to a Y2K project. About a week into the process, the manager could see no progress from the new hire. Often, during the course of the day, she would find him with his feeton his desk, either daydreaming or browsing newspapers and magazines. Time was passing, and the conversion was approaching a cost overrun.

When confronted with the issue, the employee confided that his meandering ways were rooted in his youth, when his love of card playing caused him to flunk out of college. Faced with the ironic problem that this guy could be associated with such a time-sensitive project, the manager intervened and the conversion was completed on deadline.

What could this manager have done differently in the interview process to avoid this mess? It would have been nearly impossible to discern this personality quirk in an interview, and the job candidate would never have disclosed his love of leisure to a potential employer.

Assessing the candidates
Some organizations use employee assessment tests to better evaluate candidates before making a job offer. Preemployment assessment tests rate the personality and motivation of potential employees, qualities that are difficult to judge in an interview alone.

“Knowing a person’s core behavioral style will enable you to predict how a person will behave in a one-on-one situation and on a team,” said Michael Spremulli, a certified professional behavioral analyst and president and CEO of The Chrysalis Corporation, a workforce development company.

When used in conjunction with an interview, a solid technical skills test, and a manager’s intuition, assessment tests are good tools for finding the employee who will be a good fit for your team. According to Dr. Charles Handler, president of Rocket-Hire, a consultancy that helps organizations in their hiring practices, “The benefit of this is that properly constructed assessments look below the surface information presented by an applicant in order to systematically predict which applicants will be the best hires for a position.” He compared the resume and interview process to the tip of an iceberg. The bulk of an iceberg is what’s below the surface, what you can’t see and touch.

So what’s a little dysfunction?
A bad hire is not just a manager’s personal headache; it has a direct effect on ROI, which is the CIO’s personal stone to bear. Employee performance affects profitability. Poor performance causes workflow disruptions, poor morale, and loss of intellectual capital.

Turnover costs are especially expensive when you add up the money spent on recruiting, hiring time, orientation, and training. According to Workforce magazine, turnover costs are about 150 percent of an employee’s annual salary. Think about this: If you have 30 employees in your IT organization, the average salary is $50,000, and there’s a 10 percent turnover rate, you’re looking at an annual turnover cost of $225,000.

Assessment tests offer an extra measure for fighting high turnover. But according to our experts, you have to be careful which tests you choose and how you go about using them.

All tests are not created equal
Assessment test technology has come a long way from the Myers-Briggs tests with which most people are familiar. Companies that offer assessments now number in the thousands. According to Spremulli, “There are some very bad tests and some very good ones.”

So what should you look for when choosing a test? Steve Woods, president of Workforce Metrics, said that when choosing and implementing a test, you should make sure the following conditions are met:

  • The test is a proven product backed by rigorous research and has current (within two to four years) validation studies as reported in the technical manual for each tool.
  • The test has a reliability measure of .75 or greater.
  • The test is formative (related to an absolute) rather than relative.
  • A legal firm with expertise in labor law has determined that the test has “no adverse impact” vis-a-vis federal law.
  • The test is designed specifically for employment purposes.
  • The employer has been trained in the proper use and administration of the assessment tool, so that the right tool is used in the right manner to achieve the desired results.

“Assessment is a data-driven process,” according to Handler. “Both because data is required to construct assessment tools and because, in an ideal situation, organizations using assessment tools will collect data in order to obtain metrics to verify that these tools are actually doing what they are supposed to do.” Handler stressed that you must do a job analysis before you choose a test, set the test up correctly, make sure someone has taken the time to try it out, and make it relevant to the job being applied for.

The costs
The cost of an assessment test depends on the nature and design of the tool, whether it will require customization, what technology will be used, recruiter training, and the number of candidates to be addressed. For common jobs that don’t require highly specialized skills, you can set up a simple but effective “off the shelf” assessment system for less than $20,000.

On the other hand, according to Handler, a highly tailored, validated, Web-enabled assessment system can easily exceed $500,000 in development and deployment costs. But when used to support high-volume or high-impact positions, these kinds of systems can quickly return the initial investment through increased employee performance, tenure, and staffing efficiency.

Employers can also use employee assessments to take advantage of the strengths of existing staff members. Having behavioral information on hand can enable managers to assign tasks that are matched to certain behavioral styles. When an employee is best suited for the type of work he is assigned, he’ll be happier. And that’s another factor that decreases turnover and its associated costs.

The next article in this series will cover how assessments can increase a team’s productivity and how to roll them out to your employees.