• Pre-hire assessments: pros and cons

    June 19, 2017 by

     

    Pre-hire assessments are becoming increasingly more common in the recruiting world — but that might not necessarily be a great idea for the HR space.

    The rise of pre-hire assessments

    Traditional hiring processes involved an HR-led screen of candidates, followed by phone screens, then in-person interviews, perhaps full-team meetings, and ultimately candidate selection.

    As recruiting increasingly became digital, though, there was a bit of a supply-demand problem here. For example, in 2012 7 million people applied for 260,000 British call center jobs. Companies in multiple industries began seeing a need for lower-cost, less-time-consuming hiring processes that yielded quality results. (Additionally, some statistics indicate 50% or more of candidates — it varies by country — embellish their resumes and reflect skills they don’t have.)

    Several hiring trends came from the low-cost/less-time-spent focus, and one of them was clearly pre-hire assessments.

    What are pre-hire assessments?

    Typically based on hiring/retention case studies and analyses of employee data, pre-hire assessments are tests (often short, web-based, and psychometric) designed to predict employee effectiveness (and ideally longevity) in a role.

    In recent years, large companies like Macy’s, PetSmart, Bloomingdale’s, Walmart, Burger King, Neiman Marcus, and Luxottica Retail Group, have begun using pre-hire assessments on top-of-funnel (early stage) job candidates.

    What are some examples of these tests?

    Examples of pre-hire assessmentsIf you want to become a customer service rep at T-Mobile, for example, one test involves dealing with fictional customer James Easton. He’s cranky, he’s been on hold one hour, and he is livid about his bill going up. The job candidate must walk through a conversation with “James” — and ultimately decide whether he qualifies for a rebate.

    Marriott shows housekeeping applicants a photo of different landscaped areas, and they need to identify what’s wrong.

    The Dependability and Safety Instrument test is 18 questions long, conducted online, and used by a variety of (primarily British) companies to assess candidates for more blue-collar work; it’s designed to see if their rates of absenteeism or accidents might be high.

    Do these tests work?

    There is a mixed bag of research here.

    Consider the T-Mobile example above. Last year, they had 1 million applicants for 14,000 eventual hires. While they are careful to say that a variety of factors go into hiring, Jared Flynn (their head of HR) admits that most managers “go to the top of the barrel,” i.e. look for the best scores on the pre-hire assessments.

    Says Flynn: “In the process, it’s saved a third to a half of the recruiting labor. It’s huge.”

    When a security company gave the Dependability and Safety Instrument test to 72 drivers, the bottom 30% had 6 times as many accidents as the top 30% in a given six-month span.

    Overall, most research indicates that pre-hire assessments lead to higher-quality hires who are more motivated and engaged in the work.

    There are some concerns, however.


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    The cons of pre-hire assessments

    The first major concern is around discrimination. Cognitive-driven tests, as many pre-hire assessments are, have been shown to disproportionately screen out non-white candidates. In the Leprino Foods case of 2012, the company had to pay $550,000 in back wages to minority workers it had rejected during pre-hire assessments.

    An additional issue is more about psychology. Some hiring managers don’t want to abandon their “gut feel,” thinking it’s served them well to this point in their career. (Stephen Dubner of Freakonomics has argued this is a problem with the entire concept of “data-driven decision-making,” i.e. managers still wanting to use their gut.)

    Related: Predictive analytics and interview bias

    Now we move to the scientific: validity and reliability. Any pre-hire assessments need to measure what they’re supposed to measure (validity, i.e. employee performance once in the role) and do so consistently (reliability). As you consider these factors of a pre-hire assessment, also consider the Equal Employment Opportunity (EEO) aspects as well. Employment tests are semi-frequently challenged in court. Your organization needs to be clear that your pre-hiring test meets all EEO laws.

    Additional concerns come back to time to hire/time to fill metrics. Giving a 20-minute test to a series of final candidates can extend your hiring process by days.

    And then, the final hurdle to clear: cultural fit.

    Pre-hire assessments and cultural fit

    An Aberdeen study in May 2015 — as well as many similar studies — showed that the single-greatest predictor of employee success was cultural fit.

    This is both a pro and a con in terms of pre-hire assessments.

    If the assessment is designed right (reliable/valid) and meets all legally-defensible benchmarks, then it will often be a good measure of cultural fit with a new employee.

    Unfortunately, because the vendor market is large in the pre-hire assessment space, some companies select tests that don’t resonate with their culture. These tests lack validity — they don’t measure the ultimate goal of employee effectiveness — and thus need to be phased out by the company before they fully damage the hiring process.

    The bottom line

    Pre-hire assessments can definitely be an effective tool in reducing recruiting costs, quickly narrowing down candidates, and even their main goal: predicting who will be the best future employee. But they also represent a tricky legal context and they don’t always work the way they should relative to your organization. Using them successfully requires a lot of upfront due diligence and a commitment to getting it right for your organization and future employees.

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