Should You Use Employment Tests? National Bureau of Economic Research Says: YES.
Should You Use Employment Tests? Research Says: YES.
The National Bureau of Economic Research, the nation's leading nonprofit economic research organization, published a new study that confirms job tests, also known as pre-employment tests, significantly improve the quality of hire.
In a study of over 300,000 hires, employees with positive test results stayed longer and were more productive than employees who were not recommended by the tests.
Titled, Discretion in Hiring, the study included 15 firms, 555 hiring managers, and over 300,000 hires in the entry-level service sector, including call center and data-entry positions. Applicants were administered tests that measured cognitive ability, personality traits, and technical factors. The test provided managers a green, yellow, or red recommendation based on the applicant’s test results. Candidates who scored in the green zone were highly recommended, candidates who scored in the red zone were not recommended.
The study demonstrated some interesting results:
1. Adding a test to the hiring process improved retention.
Employees who completed a test as part of the application process stayed in their position 15% longer than employees who did not have to complete a test. So just incorporating a structured test into the hiring process improved an organization's chances of hiring better people.
2. Employees who performed well on the test were better hires for the company.
Test takers who were given a green or yellow recommendation stayed over 18% longer than employees who were hired in spite of their red score. So, in addition to including a test in the hiring process, it was beneficial to consider the test results.
3. Managers who ignored the test results made worse hires.
Managers who overruled the test recommendations and made hiring decisions using their instincts, bias, or candidate likeability instead, systematically made hires that were less productive and more likely to leave.
The NBER study echoes what organizational psychologists have been saying for years: pre-employment tests help companies make better hires. More specifically, tests that measure several traits, including cognitive ability, personality, and skills, much like HR Avatar job simulation tests, do a better job of predicting candidate success than other pre-employment assessments that only measure one trait, like personality or cultural fit.
Shoa Appelman
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