In the course of working with clients and writing our Buyer’s Guide to Web-Based Screening and Assessment, my colleague Steve Hunt and I had the chance to get an in-depth look at the products and services offered by a wide variety of online screening and assessment vendors. This research has helped us to gain a good perspective on this rather complicated market space. Here are some of our opinions about the current state of the online screening and assessment market, as well as some ideas about the general trends we feel are shaping its future. We feel the 10 trends summarized in this article provide a good overview of some of the things that are currently impacting both vendors and consumers of online screening and assessment. Trend 1: The number of vendors in this space is increasing. Every time we thought we had found all the vendors selling online screening and assessment tools, a new company showed up on our radar screen. As online screening and assessment continues to catch on, we expect the number of vendors to continue to increase. However, most of the newer vendors are smaller players with tools that are narrow in focus. In the near future, we don’t expect the emergence of any new companies that are ready to challenge the major players right out of the gate. Trend 2: Differentiation is difficult. One of the most difficult things about this space for outsiders is differentiating between vendors ó figuring out what each vendor actually does and how well they do it. This is made even more difficult by several factors:
- Assessment is not the easiest subject in the world to understand. Even a basic understanding requires grasping some pretty high-level concepts. There are many subtle nuances that are challenging even for those of us who work in this space.
- Because of the heady nature of the subject matter, vendor advertising and marketing does not directly tell potential clients what a company can actually do and for what situations their products are most effective. Many of the smaller vendors who offer a narrower range of products and services tend to “oversell” themselves in order to compete with the larger companies who have a more varied range of products.
- Many vendors in this space provide overlapping services. For instance, some skills testing vendors also offer assessments, some assessment vendors offer skills testing, and some vendors specialize in only skills testing. Identifying which vendors offer the best tools to address a specific problem can be a real challenge.
Trend 3: There is still no one “best” vendor. Without a doubt, the most common question we are asked is, “Who is the best screening/assessment vendor?” As much as we would like the answer to this question to be an easy one, it is not. Each vendor has its own specialty area and its own strengths and weaknesses. While one vendor’s tools may be perfect for the needs of one company, they may be a very poor match for the needs of another. Choosing the right vendor requires taking a detailed look at issues such as:
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- Your existing hiring process
- Your recruiting process
- The level of technology you require
- Your budget
- The volume of applicants you expect
- The number of hires you expect to make
- The type and level of job or jobs for which you are hiring
Choosing the best vendor for your needs should involve a process in which you clearly map out your needs and investigate each vendor’s ability to meet them. This task is often best handled via a formal RFP process. Trend 4: Most assessment content is still not innovative. While the use of technology has created a new paradigm for delivering assessment content, the current state of the market is such that most of the actual assessment content being used differs very little from the paper and pencil measures of old. This is because the online assessment market space is still in its early stages of evolution, and ensuring the effectiveness of online assessment systems requires the use of content with a proven track record. As we move forward, vendors will be able to collect the data needed to create more innovative content that anchors systems with the ability to accurately measure key competencies with fewer and fewer questions. One bright spot in this area has been the fact that more and more companies are beginning to create simulations. We feel that these will play an increasingly important role in the future and expect to continue to see development in this area. Trend 5: Mass customization is slowly becoming a reality. Technology has provided a means for vendors to collect the data needed to get at the underlying truths related to the science of effectively and accurately matching people with jobs. As we learn more about the factors that influence performance, the stage is being set for a movement that takes the field farther and farther away from traditional test development and validation models that require detailed job analyses and local validation studies. Data will provide the fuel needed to build a new breed of systems that will be able to quickly deploy customized assessment content designed to measure the unique aspects of performance required in a specific organizational environment. The challenge is ensuring that these methods remain legally defensible and that they retain the accuracy associated with more traditional systems. Trend 6: Companies are beginning to offer new uses for data collected during the assessment process. The use of assessment results for other purposes is becoming a “must have” for vendors in this space. For instance, it is now almost standard practice among the larger vendors to provide functionality that links assessment results to the development of targeted interview guides that provide questions designed to probe a candidate’s potential weaknesses. Another functionality that is becoming an industry standard is the ability to produce developmental reports based on assessment results and the ability to link assessment content to employee training and development systems. Trend 7: Survivability will require showing customers the money. One of the major reasons that screening and assessment is taking a long time to catch on is the fact that not enough vendors are providing their clients with the tools needed to clearly demonstrate the economic returns associated with properly implemented assessment tools. While this includes the ability to examine ongoing validation data, it goes well beyond this to include collecting the data needed to examine broader trends related to effective human capital management. The leaders in this space are building systems that have continual lines out for data that provides the ability for their customers to clearly understand the implications of the assessment process for key business outcomes. Ongoing success requires providing the tools needed to educate clients about the value of the data collected during the assessment process and provide them the tools needed to begin using it. Vendors who are not able to do this are going to find difficult times ahead. Trend 8: Integration with ATS systems is becoming more than lip service. As more and more larger companies are beginning to experiment with using assessment tools, vendors are gaining experience with integrating their systems into ATS and HRIS systems. While most of the major vendors offer some way for clients to manage data from the assessment process, with one exception, no assessment system is a substitute for an enterprise level applicant tracking system suitable for high volume hiring across multiple jobs and locations. This has created a situation in which large-scale client engagements have provided opportunities for vendors to build bridges between their systems and many of the larger ATS systems. This experience has helped many vendors get on top of the integration learning curve and has allowed them to offer “plug and play” integration with many ATS systems. As more companies begin to adopt assessment technology, integrations will become increasingly less painful. Trend 9: Job boards still have not evolved. The major job boards are still using the same basic keyword search strategy that they have been using since Day 1. We don’t want to take anything away from these folks because it was the very presence of these job boards that began the online hiring revolution. However, we have seen very little evolution away from the use of keyword searches and the over-reliance on resumes as the primary currency in the online job search transaction. Both of these methods are highly inefficient. The future calls for new models that allow candidates to search available jobs based on a process that matches a profile of their skills, experience, and work-related traits to those required by available jobs. This will allow companies to reduce the “noise” currently associated with the job search process and begin screening at the earliest stages of the job search process. Assessment content can play a big role in making this happen. However, assessment and sourcing currently exist in two separate silos, and there seems to be very little movement towards integrating the two. This is unfortunate, because integrating the two offers a great way to improve the efficiency and effectiveness of the entire online hiring process. Trend 10: Mergers and acquisitions will begin to change the landscape. As online screening and assessment becomes more and more popular, there will be more investments made in existing companies. We expect to see some larger companies who are not working directly in this space make a bid for companies that can help them to expand their offerings. When faced with the decision between building one’s own assessment system or buying an existing system, it may make sense for companies without specialized resources to purchase an existing system. While partnerships are also a viable option for solving this problem, they do not provide access to the same type of revenue that comes from outright ownership or investment. Acquisitions of, or investments in, smaller companies will have a positive impact in that it will provide them with the capital they need to develop the new and innovative blends of content and technology that will help produce a new generation of online assessment tools. What Does All This Mean? We feel that significant progress is being made in many areas. Despite the fragmented nature of the marketplace, the ever increasing number of vendors, and the difficulty in understanding each vendor’s true capabilities, more and more companies are realizing the benefits of properly constructed and implemented assessment tools. This is providing vendors with the capital needed to help fuel research and development of newer, more highly evolved models. We cannot lose sight of the fact that the long-term benefits of this will be the a happier workforce that will help companies of all shapes and sizes to realize increased profits and ongoing success.