Hollie Thomas: Are people analytics and psychometrics testing essential to recruitment?

The use of people analytics, psychometric testing and how it impacts recruitment is a subject that has been debated since its creation. After all, can we really trust data to paint a solely accurate picture of an individual and their competencies?

Despite some doubts, a survey by the Society for Human Resource Management has identified that 18 per cent of companies use psychometric testing in the hiring process. Perhaps more significantly, it was uncovered that this percentage of users is growing at a rate of 10 to 15 per cent per year.

This is not such a shock. With the radical proliferation of Artificial Intelligence (AI) and our growing reliance as a society on data and analytics, turning to a set of numerical results can prove useful to support some tricky decisions during hiring.

The use of psychometric testing

In recent years intense focus on company culture and team morale has only increased. The importance of being a ‘nice place to work’ cannot be understated. This consideration is a vital component of the hiring process – you may find the absolute perfect candidate on paper, but get them in a room with the team and they could be the complete wrong culture-fit. The likely end result being that they will leave.

To avoid the cost of a bad hire, which according to the Recruitment and Employment Confederation (REC) can cost a business more than £132,000, psychometric testing can prove very useful. The type of testing can vary, but it aims to identify potential problematic behaviours that could negatively impact the business or team. Combining this with your professional insight and first impressions taken from the interview can help to construct a more informed opinion on the individual.

There is a strong element of time-saving potential here. When recruiting internally, it’s likely you will have a wide plethora of additional responsibilities, so anything that can save a bit of time can prove a godsend when making all-important decisions. Additionally, streamlining the process will help improve your chances of securing the hire.

Some critics will say that psychometric testing can add bias to the recruitment process, however I am inclined to feel the opposite. Specifically, when outsourcing this resource, it can help to better inform decisions, delving into more psychological analyses of candidates.

Sometimes your judgment can be enough, but if you need some analytics to justify to key decision makers, such as directors and internal recruitment teams, it can give you the edge you need.

The use of people analytics

In a Deloitte study on the use of people metrics, organisations using this data appropriately reported an 82 per cent higher three-year average profit than those who have not yet adopted them, or weren’t using them correctly. There is certainly an argument for collecting this data to improve your longer-term hiring strategy too.

Recruitment is a people business, and of course humans do produce different variables that are harder to predict; but taking a close look at the types of people in roles, what works and what doesn’t can prove useful for talent pipelining driven by empirical data.

People analytics can range from a number of multipliers, but for recruitment (and legal) reasons they generally focus around education, location and industry – attributes that link directly to the role in question. These can be particularly useful when hiring a trainee or an entry-level employee. These types of hires are more costly than others in the first year, and you ultimately want to figure out which individuals will give you the greater return on investment.

Despite the usefulness of people data, you cannot solely rely on this, that would be like taking a look at a CV and hiring the person without meeting them. Again, the importance of a good culture fit comes into play, teamed with the incredibly vital concept of attitude. When it comes to analysing data to support an application, balance is key. I would encourage using people analytics for every role so you can build a thorough profile of a candidate before meeting them, taking care to fill in the blanks and added extras, post-interview.

The most important attraction methods to entice talent to interview

Of course, in order to effectively apply the use of psychometric testing or people analytics, you need a quality application to begin with. The unemployment rate currently sits at 3.7 per cent (April 2019) – the lowest for decades – so the likelihood is that you will need to attract people away from a current role. So, what can you offer them that their company can’t?

Along with advertising, word-of-mouth reputation building is equally as important. Improving visibility lends to this and can certainly increase the level of referrals coming through to the business – be that internal or external. People can spread your message for you. Sure, including a financial incentive for people can also boost the level of referrals you receive, but there’s no better advertisement than a happy member of staff, a satisfied client or a solid reputation in the community.

Once your attraction method is refined, you will appeal to the talent you are aiming for. People metrics and psychometric testing therefore can be useful tools to weigh up and support your decisions. Just ensure you are striking a good balance between personal opinion, competencies and the numerical data.