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How Psychometric Data Can Help HR Teams Make Better Decisions

In the early 2000s, the global HR Consulting firm Mercer undertook extensive research and they found that the strength of the competitive advantage gained from tangible assets was weakening. This was due to easier access to capital and the fact that early adoption of new technologies was short-lived. This situation hasn’t changed (and it may be even more true today) since the early 2000s as advantages continue to be short-lived and technologies are copied quickly according to Professor Rita McGrath. This leads organisations such as Mercer to believe that one-of the last remaining sources of potential competitive advantage is an organisation’s human capital. There are many different aspects of Human Capital but we are going to focus on how psychometric data can help organisations to improve their screening and selection processes.

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1. Combine testing with intuition

Hiring the right people is usually a combination of data and intuition. We, at ETC Consult have read statements such as human instincts are no more effective than rolling a dice and this is patently untrue. In many scenarios, neuroscience has shown that your gut instinct is often unconscious pattern recognition of scenarios you have seen before. This is why successful businessmen such as Jack Welch make sure their gut plays a significant role in many business decisions.

However, relying solely on your intuition to make hiring decisions could be a mistake. It’s too easy for your gut to fall in love with likeable candidates who have resumes that look great and who say all the right things during an interview. High-quality psychometric testing provides standardised, objective data to supplement your intuition and data from interviews, resumes and background checks. The research backs this assertion up as meta-analyses have shown that including psychometric assessments can improve recruitment outcomes by 24% over traditional selection methods, such as resume screening and unstructured interviews.

2. Change the perception of HR from cost-centre to profit-driving function

Quantifying the business effectiveness of different aspects of the hiring and selection process can be a challenge unless you have methods that you can objectively quantify and falsify. People analytics is rated as a key priority for up to 77% of Executives according to Deloitte’s “Human Capital Trends 2016”. HR teams that want to be strategic-drivers in organisations are going to have to bring objective data to the table. Pre-employment assessments are one of the simplest ways to collect objective people-related data. After this data is collected, it can be correlated with performance data, turnover data etc. and this can help HR teams to show their ROI. And when you can show the ROI of your investments, you can change the image of your team from being seen as a cost-centre to an accountable, profit-driving function that is critical to business success.

3. Make sure you have the right data

Although psychometric tests can be valuable, they are only valuable if you use tests that are valid and reliable. There are many tests on the market and some are less reliable and valid than others. If you want to find out the list of criteria that psychometric tests need to have before you they can improve the effectiveness your talent management processes, please check out the following blog post.

4. Make sure your administrators have the right training

Psychometric tests need to be delivered by people who have been trained to administer and deliver them. Even valid and reliable psychometric tests are only as useful as the people administering them. You can either outsource this process to an experienced third-party provider or you can bring this service in-house by ensuring enough people in your team have the relevant training and skills.

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