Psychometric Analytics in HR: Building the Right Capabilities Helps Improve ROI
By Arijit Banerjee
The cost of a bad hire adds up quickly - from recruitment and relocation fees to training, negative impact on team members and lost customers. According to Career Builder Survey, the average cost of a single bad hire is nearly $15,000 and nearly three in four employers feel that they have hired a wrong person for a position. Reason enough for Fortune 500 companies such as Microsoft, and Ford to leverage psychometric analytics to assess cognitive and personality traits of new hires.
In India, pioneering companies such as Asahi India Glass are using psychometric assessment to increase the quality of employment index. This helps them get accurate and unbiased insight into candidate behaviour and their potential performance at various tasks. However, using psychometric analysis can prove to be challenging for HR in the face of newly emerging skills and occupations, diverse work environments, and persistent talent shortage.
Here are three ways organisations can leverage psychometric assessments to improve hiring decisions, enhance employee engagement, and in turn boost ROI:
Develop robust psychometric assessment capabilities: For psychometric assessment to be successful, it is critical that businesses apply it across the employee lifecycle - from hiring to assessment and development of employees’ high potential areas. To do this effectively, HR personnel will need to develop the right skills in applying psychometric tools to the candidate data.
Offering HR staffs access to in-depth training in analytics to help develop right technical know-how and application of psychometric testing in candidate recruitment, development and retention can help maximize its benefits. Take the case of Bajaj Corp. The company uses psychometric analytics to assess employee potential and identify their strengths in order to align employee training with their development needs.
Build expertise in multiple psychometric tests: In order to assess candidates at various levels, developing expertise in diverse psychometric tests such as aptitude tests, numerical reasoning and verbal tests, is a must. Microsoft, for instance, leverages numerical reasoning where candidates are asked to analyse data and choose the right answer to multiple choice questions. Taking a course in HR analytics helps enhance application of psychometric analytics, enabling users to identify specific candidate personality traits that highlight their suitability for specific roles.
Take a combined assessment approach: Combining psychometric analytics with other behavioural and intelligence assessment tests helps in enhancing the quality of predictive analysis and identifying the ideal candidate for the position. For instance, combine psychometric analytics with screening, sales aptitude tests, emotional and skill assessment tools for deep analysis of the candidate’s skills and aptitude. Proctor & Gamble has been able to identify applicant’s ability to function in the work culture by combining psychometric test with video-based realistic job preview. An in-depth understanding of employees not only helps enhance employee retention but also improve company performance. Deploying such a combined approach will require reskilling employees in the latest HR analytics tools and technologies, enabling them to leverage the right talent and stay competitive
The bottom line
With competencies becoming a prime-deciding factor in leveraging the right-fit talent, equipping HR with necessary skills to apply psychometric testing in the workplace offers several benefits. It helps reduce risk of selection errors by supplementing interviews with cognitive tests, lower recruitment costs by optimizing the candidate shortlisting process, and reduce turnover by aligning training with employee development needs. It’s clear that companies that leverage psychometric analytics can not only standardise and objectify the art of recruitment but also enhance ROI on human resources.