Companies decide to administer pre-employment tests for a ton of different reasons, from improving quality of hire to reducing employee turnover. The great thing about pre-employment testing is that it’s one of the most predictive factors for job success, especially when compared to other hiring factors. Cognitive aptitude tests, for example, are twice as predictive as job interviews, three times as predictive as work experience, and four times as predictive as education.
This predictive ability leads to tangible improvements in the business outcomes that matter to most companies: higher productivity, lower turnover, higher revenue, and more. The qualities that pre-employment tests identify are so universal to job performance that they drive results in just about every industry and job type.
But how can you gauge the impact that pre-employment assessments are having on your particular organization? How do you know that the tests are driving the results you want? This is where data comes in: take a look at your own hiring metrics or organization-wide analytics to see the true impact before and after you implemented pre-employment testing.
To successfully analyze this data you have to... well... actually have the data to analyze. In 11 Key Hiring Metrics to Track we listed some of the metrics that our customers have found the most useful to measure. If you aren’t already tracking these (or at least the metrics that are most relevant to your industry), then that’s the first place to start. Once you build up some of this data, you can start to track how it changes over time. Let’s see this in action with an example.
One of the most useful HR metrics is employee performance. Employee performance can be tracked in a number of ways, but it’s often evaluated based on a manager-assigned performance rating, most commonly on a scale of 1 to 5. Unsurprisingly, the hiring process can have a huge impact on your company’s average employee performance – the logic goes that the better the quality of hire you’re bringing in, the better your employee performance should be. Pre-employment tests are great at predicting quality of hire, so you would expect your employee performance to improve after incorporating assessments into the hiring process. (Hint: This is your hypothesis. Now let’s test it!)
To see if employee performance did indeed go up after you started using pre-employment tests, one way you can evaluate the data is through a simple “before and after” comparison – in other words, what was your average employee performance before and after testing. Take one company that used pre-employment tests to not only dramatically reduce turnover but also to increase employee performance ratings by 15% from one year to the next. While this is a quick and easy way to measure the effect of testing, it might blend a bunch of other factors or changes you could have made to your hiring process.
Another way to parse the data is by finding a correlation between your employees’ test scores and their performance ratings. This method minimizes some of the noise in the data by focusing in on the effect of the particular factor you care about – the test scores. One company evaluated their data to find that their employees’ test scores were highly correlated (r = 0.45, P < 0.05) with their overall performance ratings. As a result, they found that, on average, employees who passed the personality test achieved 30% higher performance ratings than those who did not pass the test.
This same experiment can be repeated with any type of metric that matters to your company, from retention and training completion to employee engagement and sales revenue. All you need is a way to quantify the business outcome you want to evaluate. And while this analysis may seem intimidating, help is available. Criteria customers can always turn to their Customer Success Manager to help guide the process for gathering organizational data, comparing it to testing data, and interpreting the outcome to see the true impact that testing has on your business goals. We call this exercise a "local validity study" because it enables you to validate the impact of the tests within your particular organization.
Pre-employment tests are an investment in your hiring process. As with any investment, it’s important to take a step back every now and then to see how it’s paying off. It also provides hiring professionals the chance to demonstrate the success of their hiring efforts to the rest of the organization.