Select the right candidates with online assessments · SELECT THE RIGHT CANDIDATES WITH ONLINE ASSESSMENTS : 3. PREDICTIVE VALUE | 12 The combination of an intelligence test and a

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Select the right candidates with online assessments

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SELECT THE RIGHT CANDIDATES WITH ONLINE ASSESSMENTS : 1. INTRODUCTION | 2

Introduction

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The people you hire should be the right

people. An employee who later turns

out to be unsuitable, quickly costs your

organisation about 22,500 to 30,000

ZAR. These are the kind of damages HR

cannot afford.

How can you be sure that you select the

real talents? The difference between a

diamond in the rough and a polished

pebble is often difficult to detect from

the outside. Studies show that half of

the organisations still rely on selection

methods with a relatively low predictive

value.

Quickly recruiting the real talents, while at the same time preventing the costs of wrong selection decisions: that is the challenge that many HR and recruitment departments face today.

Introduction1

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The latest generation of online assessment tools provides HR and effective

alternative, at a low cost. This whitepaper shows how online assessment helps you in

acquiring the right talents.

Expand your knowledge of the predictive value of selection instruments. Save 22,500 ZAR per wrong selection decision prevented. Inform yourself about the six main advantages of online assessment.

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SELECT THE RIGHT CANDIDATES WITH ONLINE ASSESSMENTS : 2. THE CHALLENGE OF HR | 5

The challenge of HR

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Taking in the right people still proves

to be a great challenge for these

organisations.

The few people you hire have to be the

right ones. The cost of a wrong selection

decision are simply too great. An early

departure from an underperforming

employee costs, when adding up all the

damages, on average 22,500 to 30,000

ZAR. HR cannot afford such mistakes.

Finding the right people is not only a quantitative but also a qualitative problem. Especially medium-sized organisations are struggling to recruit highly qualified personnel.

The challenge of HR2

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Selection methods: the state of affairs

• 50% of selections use an intelligence test, personality test, or assessment centre.

• Many companies still rely on unstructured selection interviews and overestimate its predictive value.

• The predictive value of the intelligence test, on the other hand, is underestimated.

Traditionally, many organisations use an application letter, resume and a selection

interview in the selection of new personnel. Research shows that half of the selections

nowadays also include an intelligence test, personality test or assessment centre.

What is striking about these studies is that the quality of some selection means is

overestimated, while on the other hand, the quality of other tools is underestimated.

Psychologists Schmidt and Hunter compared numerous selection tools and concluded

that a general intelligence test has the greatest predictive value for job success

in a lot of studies. In practice, however, research shows that intelligence is often

hardly considered in the selection decision. Remarkably, many selection makers

consider intelligence less important for management positions in particular, while

scientific research shows that intelligence has a high predictive value, especially for

management positions.

On the other hand, the value of other tools is overestimated. For example, many

organisations still use unstructured selection interviews, while these are much less

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less capable of predicting job performance than structured interviews.

It is remarkable that in 25% of cases at the most, organisations follow a standardised

selection procedure. Depending on the position, in 30% to 50% of cases, the choice

of a selection method is made in mutual agreement. And depending on the position,

in 20% to 60% of cases, the choice of a selection method depends on the decision of

a single individual.

The researchers conclude that many organisations can still make great improvement

in the quality of their personnel selection, by gaining insight in the predictive value of

various selection tools.

Online assessment: making sure you select the right people

• With online assessment, HR professionals and recruiters can test candidates’ suitability themselves.

• Optimal predictive value thanks to scientific foundation.• Quickly interview the right candidates. In order to make proper, scientifically based selection decision, while at the same time

accelerating the selection process, more and more organisations choose to use online

assessments.

Online assessments provide HR professionals and recruiters the ability to test

candidates themselves, on characteristics that have proven predictive value for work

performance, such as intelligence and personality. Applicants complete the tests

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via the Internet. The selection maker receives the results right away, presented

in a clearly structured report, complete with selection questions for the structured

interview.

The four selection methods with the highest predictive value

What has now become a classic survey of American psychologists Frank Schmidt

and John Hunter shows the predictive value of various selection methods. Their

conclusions are based on an analysis of several scientific studies over a period of 20

years. The four selection methods with the highest predictive value are shown in blue.

Selection method Validity Extra predictive value 1)

General intelligence test 0.51

Integrity (personality) 0.41 +27%

Task-orientedness (personality) 0.31 +18%

Structured selection interview 0.51 +24%

Unstructured selection interview 0.38 +8%

Tests for relevant work knowledge 0.48 +14%

Biographical data 0.35 +2%

References 0.26 +12%

Years of work experience 0.18 +6%

1) Extra predictive value compared to general intelligence test.

Reference

Schmidt, F.L., & Hunter, J.E. (1998). The Validity and Utility of Selection Methods in Personnel Psychology: Practical and

Theoretical Implications of 85 Years of Research Findings. Psychological Bulletin, 124, 262-274.

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SELECT THE RIGHT CANDIDATES WITH ONLINE ASSESSMENTS : 3. PREDICTIVE VALUE | 10

Predictive value of online assessments

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The fact that many organisations do not

yet use an intelligence test, is therefore

a missed opportunity. An intelligent

candidate can analyse work situations

and problems faster and find appropriate

solutions more quickly.

Independently of the intelligence test,

a personality test adds an additional

predictive value. Brainpower alone

if often not enough. For example,

task-orientedness is a personality

characteristic that, regardless of

intelligence, often predicts how successful

a candidate will be.

An intelligence test has a very high predictive value in comparison to other selection methods. The previously mentioned study by Schmidt and Hunter shows that the correlation between intelligence and job performance is an average of 0.51.

Predictive value of online assessments

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The combination of an intelligence test and a personality test has up to 27% more

predictive value than an intelligence test alone. Online assessment reports that

automatically combine both tests into a single clear advice, give you a valid indication

of whether someone is or is not suitable for a position.

All scientific knowledge about predicting job performance is completely imbedded in

the instruments themselves. The standardised workings of online assessments ensure

optimum predictive value, without any noise from irrelevant information.

Additionally, the reports are excellent for use in a structured interview, thereby

increasing the predictive value of the selection method with another 24%. The

probability of an incorrect (costly) selection decision is thus much smaller.

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SELECT THE RIGHT CANDIDATES WITH ONLINE ASSESSMENTS : 4. THE SIX ADVANTAGES | 13

The six advantages of online assessment

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Easy to use You can easily use online assessments by

yourself in your organisation. As a user,

you only need to provide the candidate’s

email address and the required reports.

The online assessment system then

makes the appropriate tests available to

the candidate and alerts you by email if

the candidate is ready. The test reports

are immediately available to the selection

maker via a secure connection, without

any necessary intervention.

Compared to other selection tools, online assessment offers HR six important advantages in recognising talent:

The six advantages of online assessment

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Initially, many online assessment tools were not much more than a digital

counterpart to the classic pen-and-paper test. A simple scoring system

led to a straightforward statement about the candidate’s personality or

intelligence. In contrast, the latest generation of online assessments

provide opportunities to tailor the test result reports completely to the

qualities that someone in a certain position should possess. This simplifies

the interpretation for the user. For example, if you are looking for an

operational manager who understands the art of delegation and can

maintain an overview, you can now translate the results of the personality

test to the required management competencies with the push of a button.

You immediately see whether a candidate possesses the right qualities for

your position.

Speed of the selection process

By making a pre-selection based on the test results, you can meet the most

suitable candidates in an earlier stage. Furthermore, you can have a more

focused conversation with the candidate. The test reports help you question

the candidate’s strengths and weaknesses. Combined with a structures

interview, the selection method hereby reaches optimal predictive value.

For example, if the personality test shows that a candidate for a

management position is very susceptible to stress, that poses a risk you

can ask about. There is a big chance the candidate’s susceptibility to stress

was not revealed by his resume or motivation letter. Relevant information

surfaces sooner, allowing you to reduce the number of interview rounds in a

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selection procedure.

Flexibility in test administration

The medium of online assessments, the Internet, has the great advantage

that candidates are not required to be tested at your organisation’s

location. Candidates can log in to their personal assessment account from

any computer. Anywhere, at any time. This saves significantly on logistics

costs. It also increases the selection makers’ flexibility in testing large

numbers of applicants.

Prevent costs from wrong selection decisions

You quickly identify top talents from your group of candidates at a low

cost, preventing the cost of wrong selection decisions. The probability that

a candidate with a poor job fit meets the finish line, becomes smaller. The

odds that someone with a lot of hidden potential is left to the competitor

also decrease.

You also benefit in comparison to traditional assessment methods. An

online assessments costs on average 10% of a traditional assessment

centre, while it offers you 90% of the information. The investment in a

private online assessment system more than pays for itself when you test

more than 20 candidates per year.

TIP

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Strengthen your internal role

Because online assessment is a cost effective selection method, HR proves

its added value by using it. Delivering quality for little money: it is a way

for HR to strengthen its position within the organisation as a business

partner.

Because the latest online assessment systems can be used in your own

control, HR also makes itself less dependent on the external supplier. A

good supplier trains selection makers in advance in the use of the test

reports. Selection makers gain more knowledge about the predictive

value of various personality characteristics and give better internal advice.

They also hold objective information to substantiate their advice. This

strengthens their internal position.

Professionalisation of the selection process

Online assessment complements the expertise of the selection maker with a

uniform yardstick to compare candidates. Decisions in the selection process

therefore become less dependent on the frame of reference of individual

decision makers. Selection makers build a measurable norm together and

compare candidates to that norm.

The selection interview will also get a more clear line and focus. The

hiring policy thereby becomes more consistent, creating more clarity both

internally (towards the rest of the organisation) and internally (towards

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the rest of the organisation) and internally (towards candidates).

Professionalisation of the selection process also increases the attractiveness

of your organisation. An organisation that tests people in a structural and

professional manner, shows that it is looking for quality. You can also give

candidates more informed feedback, which will increase the acceptance of

selection decisions.

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How can HFM help you?

5SELECT THE RIGHT CANDIDATES WITH ONLINE ASSESSMENTS : 5. HOW CAN HFM HELP YOU? | 19

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SELECT THE RIGHT CANDIDATES WITH ONLINE ASSESSMENTS : 5. HOW CAN HFM HELP YOU? | 20

About HFM

HFM helps organisations recognise and use talent. We do this in the belief that your

organisation’s success is determined by the qualities of your people: performance

is about people. Since 1997, we help hundreds of organisations increase their

performance, with increasingly better people.

With HFM’s online assessment system; HFMtalentindex Online Assessment, you

instantly get a clear answer regarding applicants’ suitability and your employees’

development potential. In addition, we offer you the tools to gain insight in the

talents of entire teams, departments, and business units (HFM Talent Analytics).

5How can HFM help you?

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SELECT THE RIGHT CANDIDATES WITH ONLINE ASSESSMENTS : 5. HOW CAN HFM HELP YOU? | 21

How we can help you?

HFMtalentindex Online Assessment

With HFMtalentindex, your personal online assessment system, you

immediately receive a clear answer to your questions about the qualities of

applicants and employees.

HFM Talent Analytics

With HFM Talent Analytics, you gain organisation-wide insights in the

talents and development potential of teams, departments and business

units.

Call +31 85 401 50 50

Do you have more than 10 vacancies to fill annually and are you

considering implementing an online assessment system in your

organisation? Please contact us at for an obligation-free conversation with

one of our advisors. Or you can send an email to [email protected].

Documents

Select the right candidates with online assessments · SELECT THE RIGHT CANDIDATES WITH ONLINE ASSESSMENTS : 3. PREDICTIVE VALUE | 12 The combination of an intelligence test and a