The Power of Psychometrics in testing times

The Great Resignation has made it more important than ever for organisations to make informed recruitment and hiring decisions.

Psychometric assessments are typically used in the selection process to provide objective insights into a candidate’s behavioural traits, preferences and capabilities. Psychometrics play a key role in differentiating candidates, particularly where they have similar technical skills and experience. But what value do psychometrics add in the current market where there is much less skilled talent to choose from?

“Organisations are finding it incredibly difficult to hire the qualified candidates they need to fill their vacancies,” says Fiona Hancock of Added Insight. “The tight labour market means some organisations resign themselves to taking whoever they can get. They think they have no choice. Psychometric testing informs your choices and it’s a really valuable, insightful way of setting new employees up for success.”

Anybody working in HR or recruitment roles knows that finding and retaining key talent is challenging at the moment due to the tight labour market and shortage of suitably qualified candidates. The national unemployment rate in New Zealand is at a record low of 3.2% (as of May 2022) and upward pressure on wages is expected to continue for the foreseeable future.

Covid has turned off the tap which led to a net inflow of migrants, younger generations are leaving in their droves to do their OE’s they postponed due to lockdown and closed borders, and the domestic labour supply is nearly tapped out.

With the demand for skilled candidates significantly outstripping supply, an increased focus on hiring for potential, retention, employee development and long-term workforce planning is crucial for businesses to continue accessing the talent they need.

These are testing times for recruiters. It’s tough out there and the current environment makes every hiring decision crucial and critical to organisational success. Psychometric testing makes it more likely you’ll get those decisions right.

With less choice in the labour market, many organisations will need to compromise as they may not be able to find their ideal candidate. In a tight labour market, businesses may need to re-think their candidate pool altogether to include candidates that may not have the exact skills, experience and attributes that have historically been required for roles within their organisation.

“The need to broaden the candidate pool means organisations can't hire using the same criteria as they did when they were spoiled for choice,” says Hancock. “Where previously they might have required someone with three to five years experience in a particular role or industry, now they’re less likely to find available candidates with that level of experience. So they need a different way to measure the likelihood of a successful hire, which is where psychometrics can be so valuable.”

Psychometric testing gives you some reassurance when you're hiring based on potential rather than experience. That objective insight is vital because in some cases you can't measure candidates' experience because they don't have as much as you might like.

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Given the challenge of finding good people, businesses may need to consider what broad capabilities and personal attributes fit with the organisation’s values and culture and recruit against those. For example they may want to consider attributes such as adaptability, resilience, critical thinking and ability to learn, particularly in the absence of relevant skills and experience. Psychometric assessments provide valuable insights into these traits which are difficult to accurately assess based on an applicant’s CV or interview.

Businesses can use the results from psychometric tests to decide what traits, skills and capabilities they’re willing to compromise on and what are the non-negotiables. Some traits and skills are more easily developed than others. For example, negotiation skills can be taught but you can't easily teach a candidate to develop empathy for people. They often either have it or they don’t.

Psychometric assessment results can also inform a candidate’s learning and development priorities. Businesses may decide to redesign a role to better fit the candidate’s skills and personal attributes giving them time to develop the capabilities they may be lacking.

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Part II of this blog will give you some pointers on how to choose the right psychometric test for your organisation and how to use psychometrics as part of your organisation’s learning and development strategy.