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Psychometrics – history, relevance, and future in recruiting

The use of standardized assessments in the recruiting industry is a commonly used practice that can reduce personal biases, reinforce more consistent hiring practices, and leverage relevant data to make better decisions. However, there are questions raised about the accuracy and use of said tests. This article will explore the history, relevance, and future directions of psychometrics in the contemporary recruiting context.

Psychometric Assessments – The Provenience

Psychometric assessments have long been around in the organizational field. Even though embedding them in the recruitment process to determine if a candidate is fit may strike you like a new practice, it has been around for over 70 years.

Initially, psychometric assessments and various standardized tests emerged as an army selection criterion during WW2. In this context, besides soldiers’ scored physical abilities and reviews from peers, psychologists aimed to find the next leaders through psychometrics. They were not the main selection process, but they were a successful way to screen for potential and make sure an individual is fit to interact with people and, more importantly, to lead them.
After the war ended, psychometrics were introduced to the US recruitment processes as a way of measuring potential. This was a much-needed step because many young men and women have not been employed before, and so there was no way to predict their performance. Hence, to be able to make good hires, the most reliable option was to construct a thorough candidate profile as a proxy for future performance.

From that point on the uptake of psychometric tests of any kind has only gone upward. They have been proven to be a significant way to determine if a person can integrate into a team or system, or if they have the potential to advance through a specific organizational culture.

Using Psychometrics today – The relevance

When considering the use of psychometric assessment versus more traditional recruiting practices two words should come to mind – noise versus clarity. PhD Kahneman describes decision-making noise as the variation between outcomes based on similar data. To simplify: if using the same data your organization can make a similar decision every time (or most times, let’s consider a 10% variation acceptable), then you have clarity. When the variation (the noise) increases, discrepancies appear between decisions based on the same information, and inconsistencies that can impact operational processes arise.

In the recruiting industry, this is more specifically related to personal biases or inconsistent training – different people involved in the hiring process may make different decisions about an applicant due to their worldviews, values, or simply due to perceiving the position they are recruiting for differently. If, in this case, there is too much noise, then an organization can end up with lower rates of agreement between recruiters which can lead to missed potential due to not objectively considering all the relevant data.

Reducing noise is multiple systems such as banking, insurance, or recruiting is a topic of much interest to any leader who wants to optimize their model. Even though it may seem like a complicated process, the principles are quite simple. Standardization is key – by making sure that all people involved in a decision-making process use the same relevant data in the same way, the agreement increases. For example, if multiple recruiters are trained on how to score the same dimensions and use a similar grid, the agreement about a candidate significantly increases. More so, if an algorithm is able to accurately score relevant dimensions, the data become as objective as possible and can then be used by recruiters with less bias.
However, if each recruiter structures their interview based on their views and practices, discrepancies can arise and subjectivity can increase noise by, for example, mistaking values, oratory abilities, or appearance for capability. This is not to say that recruiters should not have a personal say, but just to emphasize that it can be especially helpful to use objective standardized data before adding on the personal judgment layer in order to reach the best decisions.

The use of Psychometrics – Future directions

Since the use of psychometrics in recruiting has started, the market has displayed a steady adoption rate. In Western Europe and America now, over 60-70% of big and developing companies are using some form of psychometric test. This has doubled in the past years, with the rate being at only 30% 15 years ago, and it is still growing.
More so, in a time when data strategies are more relevant than ever, the majority of executives are turning to objective data to make better decisions, improve operational efficiency and reduce costs. In the recruiting domain, this means lower turnover rates and a more stable core team due to finding good fits, lower lead time and more objective recruiting, and, last, less time spent by employees on decision-making and data gathering. These can all be achieved by using relevant digital assessments.

Even though psychometrics may sound like a great solution, their use in recruiting has been a much-debated topic as of late, with people arguing against it due to potential involuntary discrimination. This especially applies to neurodivergent people or, in some contexts, to women or socioeconomic minorities. These are all valid concerns, but everything revolves around what dimensions you choose to assess.

In relation to this, it has been suggested that if psychometrics are used alongside other relevant dimensions such as expertise or motivation, they can be an important additional decisional layer. Further, if relevant standardized assessments are used to measure, for example, openness – which is related to overall job performance, or agreeableness – which is related to integration, then they can predict if an individual has the potential to excel, adapt, and enjoy their role in a new team and culture. Psychometrics can only have a negative impact when they are used to search for the wrong prototype of the ideal employee, especially if that profile excludes minorities. Thus, it is important to only use relevant assessments and to consider how they apply to various contexts.

Summing up…

Generally, psychometrics assessments have been around in recruiting for a long time and it appears that the trend is only growing and expanding to developing economies. They are especially relevant as they provide relevant objective decision-making data that can reduce decision-making noise and improve a company’s turnover rate, culture, lead time, and costs. However, it is important to choose your assessments right, and integrate them as part of a comprehensive structured process, in order to make sure that they achieve the targeted results and find the greatest potential in your candidates.

This is why at EWS e have digitalized the recruiting process and we only measure what matters – expertise, motivation, psychological profile, and occupational preferences. This is how we make sure the process will improve the decision-making process in a company, but also that new hires can fit the culture and enjoy their role.

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