How to Improve Attrition Rate and Employee Performance With Pre-Employment Testing

This is a guest post by Dane Barnes and Dr. Adam Grant, Co-Founders of Optimize Hire. 

The choice about who to hire may be the single most important decision that leaders make. Summer internships provide a valuable way to evaluate potential full-time employees’ performance and cultural fit. Yet all too often, managers choose candidates who fall short of our expectations. Eighty-five years of scientific research show that simply reviewing resumes and conducting interviews are significantly less effective than using pre-employment assessments to predict job performance. Interviews and resumes provide incomplete information about a candidate’s actual abilities, motivations, and personality traits. Evidence suggests that using validated pre-employment assessments can help organizations avoid the costs of hiring low performers.

In the past decade, scientific research has revolutionized the selection and hiring process. Many leading organizations—including Google, Microsoft, NASA, GE, the U.S. Army, and PepsiCo—rely heavily on scientific assessments to identify top performers. Pre-employment assessments allow organizations to evaluate whether applicants possess the abilities, motivations, and personality traits necessary to succeed in the job.

Using cutting-edge research, Optimize Hire has developed and validated a battery of customized pre-employment assessments that have direct applications to hiring decisions in a wide range of industries. We examined hundreds of previous studies of similar jobs to identify the most critical factors for job performance and have designed assessments to measure these factors. In decades of research, we identified four valid predictors of future job performance: motivation, initiative, cognitive ability, and personality.

Motivation & Initiative

For motivation, extensive research shows that motivated employees are driven to invest high levels of time, energy, and attention in their work. The Optimize Hire Pre-Employment Tests use an evidence-based questionnaire to score candidates on four key types of motivation. However, motivation is necessary but not sufficient for high performance. Some motivated employees go the extra mile of taking initiative to develop new ideas, improve existing processes, and overcome barriers. The Optimize Hire Pre Employment Tests include a validated measure of initiative that proves difficult to fake, as it is unclear to applicants which response is the “right” answer.

Cognitive Ability

Beyond motivation and initiative, cognitive ability is a powerful driver of performance. Cognitive ability, the capacity for processing information, is the most consistent predictor of performance in virtually all jobs in the U.S. Research shows that high cognitive ability enables employees to learn more and learn faster, solve complex problems, and develop more efficient and effective working methods. The Optimize Hire Pre Employment Tests feature validated questions to assess problem-solving and information-processing skills.

Personality

Finally, research reveals that two important personality traits matter more than any other for job performance: conscientiousness and emotional stability. Conscientiousness is the tendency to be dependable and disciplined, and emotional stability is the tendency to stay collected in the face of threats, pressures, and negative feedback. The Optimize Hire Pre-Employment Test includes a validated questionnaire that offers a window into these tendencies.

Decades of Research

In a landmark study compiling 85 years of research, Drs. Frank Schmidt and John Hunter, two of the world’s leading experts on selection and hiring, conducted a review of thousands of studies linking 19 different selection methods to job performance. They found that by incorporating pre-employment assessments, employers could cut the risk of hiring low performers by more than half.

Performance Results

We have spent four years demonstrating the value of the Optimize Hire Pre-Employment Tests. On average, applicants who scored high on the Optimize Hire Pre-Employment Test generated 50.8% more annual revenue than those with a low score:

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Turnover

The Optimize Hire Pre-Employment Test is also a robust determinant of turnover: in the eye care industry, we found that applicants who scored low on the Optimize Hire Pre-Employment Test are 5.7 times more likely to voluntarily quit or be terminated than those with high scores:

 

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We found similar results in the telecommunications industry. Employees who scored low on the assessment were approximately twice as likely to quit over a nine-month period as those with high scores.

Pre-Employment Tests Improve Hiring Decisions

“In economic terms, the gains from increasing the validity of hiring methods can amount over time to literally millions of dollars,” wrote Schmidt and Hunter, noting that the evidence is even more striking when considered from a loss perspective: “By using selection methods with low validity, an organization can lose millions of dollars in reduced production.” Scientific testing significantly increases the probability of hiring star performers. It enables managers to screen out applicants with low potential, allowing them to focus on interviewing candidates with high potential. Scientific testing is not perfect, but research shows that it is significantly better than simply screening resumes and interviewing alone.

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Nathan Parcells

Nathan Parcells is VP of Marketing and co-founder of Looksharp. He has spent the past decade helping students launch their career, researching best practices for hiring millennials (including running Looksharp's annual "State of College Hiring") and sharing these insights with employers. Nathan's work has been featured in Forbes, TechCrunch, Business Insider and more. Outside of work, Nathan is an avid rock climber, back packer and Bob Dylan fan.

  • ricky b

    How were you able to determine that these employees generated 50.8% more annual revenue? What field/job function were these employees in?

  • http://kedariyer.com floatr

    A more effective approach to spotting top young minds is to ask them work-related problem solving questions in order to evaluate most of what you have specified above, but with absolute certainty.

    Line managers are beginning to take matters into their own hands and spot talent online without relying on resume screening, which creates more biases than spot unconventional thinkers.

    Here is an example of an advertising agency that picked a law student without CVs or scientific testing, but with a simple work related problem question, posted online.

    https://medium.com/future-of-jobs/8fada5cb3e1