For over half a century, psychological research has demonstrated that pre-employment tests provide relevant and objective data about job candidates that are ultimately predictive of employee success. Now, a compelling new study from the National Bureau of Economic Research (NBER) reaffirms the idea that the use of pre-employment tests leads to tangible improvements in hiring results.
The NBER partnered with researchers from Harvard, Yale, and the University of Toronto to investigate how the hiring decisions of (human) managers compared with the hiring decisions made by a pre-employment test’s algorithm. The study analyzed an enormous sample of 300,000 hires and 555 hiring managers within 15 firms.
What they found was that simply incorporating job tests into the hiring process lead to improvements in employee retention – employees who were hired with job testing stayed 15% longer in their positions than those hired without testing. They also found that the more a manager strayed from the test’s recommendation, the worse the hiring outcome. In other words, the test selected better job applicants than the hiring managers.
For a much more detailed look at the study and its relevance to employers, click here.