More Companies Go With Online Tests to Fill in the Blanks

By Ed Frauenheim

May. 27, 2011

Companies are giving employment testing high marks these days. Despite a still-tepid hiring climate, spending on assessments of job candidates and existing employees rose about 20 percent last year, according to vendors in the field. Josh Bersin, president and CEO of Oakland, California-based research firm Bersin & Associates, estimates the global market for assessment tools and consulting to be between $1.5 billion and $2 billion annually.

Bersin attributes increased interest in testing partly to the rise of software systems that let employers create detailed profiles of employees and plan their development. “With the growing awareness of integrated talent management and the new talent management systems becoming implemented in many companies, the role of assessments is growing,” Bersin wrote in a January blog post.

Other reasons for the assessment uptick include the high volume of applicants in this weak job market, a push for globally consistent recruiting and promotion methods, and the need for legally defensible hiring practices.

Pre-employment testing can make for more efficient hiring at a time when companies are flooded with applications from unemployed workers, says Russ Becker, managing partner of Wayne, Pennsylvania-based Kenexa Corp.’s assessment unit. “People are applying for every job they can.”

Employment assessments can range from online exams for a specific computer skill to personality tests intended to predict customer service prowess to extensive evaluations of potential executives. A study published last year by consulting firm Rocket-Hire found that about two-thirds of companies use some form of pre-employment assessment tools. The report, which surveyed 148 recruitment and hiring professionals, also found that personality, knowledge/skills, and cognitive testing remain the most popular types of assessments.

Timken Co., a Canton, Ohio-based manufacturer of bearings, lubrication products and seals, hopes assessments will help it make smarter hiring choices. “We really are trying to improve the quality of hire,” says Candice Young, a talent acquisition specialist at the company.

Timken recently rolled out an online assessment for applicants in the United States who are interested in hourly positions. Among other things, the assessment covers math skills and other traits, such as attention to detail. Last year, the test was validated with existing Timken employees. Higher performers did better on the test. Timken, which employs some 17,000 people globally, plans to expand the testing of hourly candidates worldwide within the next two years.

Indeed, more multinational companies want to do consistent assessment throughout their global workforces, says Scott Erker, senior vice president of selection solutions at Bridgeville, Pennsylvania-based Development Dimensions International Inc. Through standardized testing, he explains, companies hope to create a “consistent customer experience” no matter where they operate.

Employers’ desire to work with a single vendor on a worldwide basis helped fuel a recent merger between assessment providers PreVisor and SHL. The resulting company, London-based SHL Group, has such multinational clients as Barclays Bank, Microsoft Corp. and Timken. (Initially, SHL Group will be called SHLPreVisor in the United States.)

Robert Morgan, chief marketing officer of SHL Group, says creating a standard, global approach to testing isn’t as easy as translating a test into multiple languages. Because of different cultural norms, companies and test-makers must “localize” tests. Morgan points to an assessment of situational judgment that asks test takers to imagine they are retail employees and to react to an incident in which a wine rack is bumped, resulting in a spill. This test item isn’t effective in Arabic cultures, Morgan says, given that some Muslims will not touch alcohol. “You have to show olive oil or something very different,” he says.

Businesses also are turning to tests to help them make promotion decisions, Morgan says. Judgments, he adds, about which employees are prepared to move up shouldn’t rely only on performance reviews. “The real issue is understanding potential,” Morgan says. “Past performance can also hide some key weaknesses.” (See “The Reviews Are In,” p. 20.) In addition, companies increasingly are using assessments to make sure their hiring methods can stand up to legal scrutiny, Kenexa’s Becker says. The objective nature of skills tests and other assessments makes it harder to accuse companies of discriminatory hiring.

Nonetheless, some employment tests have been challenged in court. Last year, for example, the U.S. Supreme Court ruled that a group of African-American job applicants could pursue a discrimination lawsuit against the city of Chicago related to an employment test. The applicants claim the city’s use of a test for firefighter jobs negatively affected African-Americans’ chances of being hired.

Employment testing presents other challenges, including the possibility of cheating and many people’s aversion to being assessed. Vendors have tried to counter the public sharing of test content through techniques such as adaptive tests, in which subsequent questions vary depending on the test taker’s answers to items. Providers also are working to make assessments more pleasant by giving them a video game feel.

Companies can appeal to job applicants by offering them feedback from the assessment, Erker says. Even those who don’t match up well for a particular job would receive advice on the kind of position that might be a better fit. “You’ve got to turn testing on its head and say, ‘What is in it for the person taking the test?’ ” he says .

Workforce Management, May 2011, p. 12-13Subscribe Now!

Ed Frauenheim is a former Associate Editorial Director at Human Capital Media and currently works as Senior Director of Content at Great Place to Work. He is a co-author of A Great Place to Work For All.

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