Should HealthTech Start Up's be using Psychometric Assessments?

We get asked this question a lot from our clients. We believe that before we can answer this question, you have to consider a number of factors first. 

So we thought we would put together some information which takes a look at Psychometric Assessments, in this 4 minute read you will discover the following.

• What are Psychometrics?
• Why are Psychometrics used?
• When can Psychometrics be used?
• What are the Pros & Cons in using Psychometrics?

As a professional search firm, we use Psychometric Assessments as a tool to aid our own proven processes. The Psychometrics assessments are usually made after the candidates first interview with the Hiring Manager, this helps us understand how well suited the candidate and company are.

What are psychometric assessments? What do they measure?

Psychometrics attribute to the science involving the creation and development of tools to quantify the psychological aspects of an individual. A person’s psychological facets are intangible and not as easily measured as their height, weight, or other physical statistics. As such, experts in the field of psychology have developed scientific tools to assess a person’s core competencies, reveal personality traits, and particular behavior. You may be familiar with the concept of online pop quizzes. However, unlike the Facebook and Buzzfeed quizzes, true psychometric tests are backed by years of extensive studies, with opinions from experts around the world, and rules governing any form of psychological assessment. This subjects all psychometric assessments to key properties, ensuring that a specific test constantly measures what it intends to measure, with low impact from external factors. For Hiring Managers, psychometric testing provides an impartial and empirical way of measuring a candidate’s overall predisposition. 

PSYCHOMETRIC ASSESSMENTS IN THE HIRING PROCESS

When are psychometric tests used?

In recruitment, psychometric tests are used to measure a candidate’s job suitability based on their personality and aptitude. Psychometricians can design tests to specifically measure constructs relevant to the specific role or the company’s nature of business and culture.

• Depending on the design of the test, it can be best used to narrow down a bigger pool of candidates or provide an impartial, statistical opinion in juxtaposition with the final interview.
• As it provides insight into an individual’s particular behavioral patterns, Hiring Managers use psychometric assessments to further ensure that they are making the correct hiring decision.
• Reports say that 80% of Fortune 500 companies use psychometric assessments during the pre-hiring process.

Why should I use psychometric assessments in screening candidates? What are the benefits? What problems do psychometric tests solve?

• A recently conducted research reported 49% of new hires failing in the first year and a half. For companies, this can cost up to 300% of a first-year salary, not including hidden costs in training and lost productivity. Companies that started using psychometric assessments in the hiring process reported a 20% decrease in churn rates. Startups and scaleups can greatly benefit from this. A young company building culture and processes would want to retain people for as long as possible, avoiding attrition costs and sustain employee morale.
• Human judgment always has its faults, and so it is widely accepted that interviews are subject to a lot of inherent human bias. Objective measurements through psychometric testing provide an unbiased and more informed approach toward making hiring decisions.
• Psychometric testing allows hiring managers to have an accurate measurement of an applicant’s job compatibility during the hiring stage. This ensures that the right people are hired for the right positions. For example, you would prefer the candidate with a high extraversion score for the role of Sales Manager. 
• Results of a psychometric assessment can be used as a predictor for an applicant’s future performance on the job. Additionally, it can serve as a reference for an employee’s motivators and qualities in the case of assessments and touch bases.

A startup would want to utilize all these benefits. Forming a team from scratch can be like doing a puzzle, you’d want every piece to be a perfect fit. Psychometric tools ensure that every hire is suitable to the position, the team, and the company. 

Why are there companies who don’t use it? What are the possible disadvantages?

Some companies stick to traditional methods and intuition, opting out of using psychometric assessments for the following reasons:

• Cost. A testing kit requires a lot of research and expertise. From creation to the administration of the tests requires licenses, certifications, and training. Depending on its extensiveness, a psychometric testing kit can cost hundreds of pounds.
• Time.  There are managers who are content with CV screening and interviews when hiring candidates. For them, psychometric assessments take up more time than the entire hiring process should. 
• Accuracy rates. Psychometric tests are subject to statistical testing for accuracy on whether a test measures what it intends to measure. Personality and aptitude tests are never 100% accurate.

What forms do psychometric tests come in?

The Society of Human Resource Management categorizes recruitment testing into three types: Cognitive, Personality, and Aptitude tests.

• Cognitive: Tests in this category measure verbal, mathematical, and reasoning capabilities. These tests help measure one’s ability to perform in a specific job. Proficiency in specific knowledge and skill, and how you rank within a given population. Examples include Raven’s Progressive Matrices, Stanford-Binet Intelligence test, Memory test, LSAT, etc.
• Personality: These types of tests measure dimensions of human personality. These are usually used to find out a candidate’s motivators, and suitability with the company’s culture. Examples include the True Colors personality test, Myers-Briggs Type Indicator, DISC Behavior Inventory, Five-Factor Model Rating Form, Occupational Interests Inventory, etc.
• Aptitude: Aptitude tests provide a measurement of the candidate’s skills and learning ability specific to the nature of the job. This helps employers assess whether a candidate can perform the job and cope with the progressive requirements of the job. Examples include the Learning Style Test, Differential Aptitude Test, SAT, College Entrance Exams, etc.

What features should I be looking for in a psychometric test?

In choosing a psychometric assessment kit, be guided by these factors to get the best value for your money:

• Already established. An established psychometric test has support from the scientific community and good feedback from previous users.
• Standardized.  The test must be based on results from a sample population or representative of the people who'll be taking the test. Test a representative sample of that group, and then apply the results to the specific people whom you test. Also, a standardized test is administered the same way every time to help reduce any test bias. 
• Validity. Validity is a statistical measurement that ensures a test measures the psychological aspect it intends to measure.
• Reliability. A test’s reliability is a statistical measurement that proves it measures the same facet irrelevant of the time, place, individual, and other factors. 
• Low margin of error; high accuracy rate. A test with high accuracy has low fallibility. External factors will have minimized effects on the results of the test. As a hiring manager, you’d want test results you can be confident in at all times.
• Study-based. A psychometric assessment kit must be based on reliable studies, approved by professionals in the field of psychology. Choose a service provider who can discuss with you the theories behind the design of their test.
• Accessibility. Psychometric testing does not have to be via pen and paper. As a startup during a worldwide pandemic, do you really have the space to hold psychometric testing for one or more candidates on different dates? Reliable virtual options are a huge advantage.
• Relevance. Psychometric assessments can be designed to measure facets specific to companies or certain industries. Make sure the test you’re getting applies to the nature and demands of the role you’re trying to fill.  

 At an early stage, Psychometric assessments allow us to measure how a candidate’s personality and aptitude compare to what the job needs. In the long run, we can refer to that person’s results to be guided in keeping employee motivation high, directly affecting productivity. As a young firm, you may be exposed to a whole lot of risks in different aspects of your business. Psychometric assessments can protect you from the risk of having an unproductive team dynamic and extra costs related to your attrition rate.

If you have any questions about whether or not to use Psychometrics in your current hiring process, contact us on +44 (0)151 203 6554 or message me on LinkedIn https://www.dhirubhai.net/in/pmfoster/