Trend Analysis: Why Is Online Assessment Gaining in Popularity?

I’ve been following the assessment market for the past 10 years and I am happy to say that it seems like people are finally starting to realize the value that assessment tools can add to their hiring processes. After five years of standing on my soapbox, I am finally starting to feel like I am not wasting my breath. While we still have a long way to go, I am feeling very encouraged lately and want to use this space to take a brief look at what I feel are some of the main reasons for the increasing interest in these tools. This article provides my opinion on the five main reasons for the increasing interest in these tools as well as a discussion of some of the major obstacles to their use. So why is online assessment gaining in popularity?

  1. Increased ability to create new and innovative products. Technology has fundamentally changed the world of assessment. Administrative burdens no longer present a barrier to the use of assessments. More importantly, companies on the cutting edge of this market are blending technology and assessment content to create systems in which the whole is greater than the sum of its parts. The rise of companies that are equal parts assessment and technology has resulted in the creation of products that can do much more than the paper-and-pencil products of the past.
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  3. Dissatisfaction with the ability of current systems to help make quality hiring decisions. As the online hiring process has evolved, more and more organizations are realizing that making good hiring decisions is something that goes well beyond the corporate website or the mere presence of an ATS to manage applicant information. While these things are important ingredients in creating a technology-based hiring process, they do not provide organizations with enough data to support effective decision making. By adding assessment to the mix, those making hiring decisions are given additional data to help them better understand each applicant relative to job and organizational requirements. As the adoption curve for applicant tracking systems begins to mature, more and more organizations are looking to assessment to help them extract more value from their hiring processes.
  4. Increased exposure and learning. There is a small but dedicated group of individuals such as myself who understand the value assessment tools can have for organizations and have been helping to spread the word. My research has consistently identified lack of knowledge about assessment as one of the major reasons that organizations have resisted using it. True, assessment is a relatively complex topic, but there is information and assistance readily available to those who are really interested in learning more about it. More and more assessment companies are sponsoring webinars and white papers dedicated to helping those interested move up the learning curve. Also, there seem to be an increasing number of persons who are seeking out educational opportunities in the field of I/O Psychology. I think that this collective effort will have a significant impact on the availability of information and expertise about assessment tools.
  5. Increased adoption by non?assessment vendors as a value-added service. Reasons 1 through 3 have created a situation in which vendors of other related hiring tools have begun to understand the value of offering assessment tools to their clients. While creating assessments from scratch is often a difficult and complex process, there are many assessment vendors who are eager to exploit new sales channels. The result is that ATS companies working across markets of every size and shape are beginning to educate themselves about assessment. This most often results in partnerships in which assessment providers gain additional exposure to customers, while the ATS company gains the ability to sell products that can help ensure their customers can optimize the predictive ability of their hiring systems. I expect this model to continue to expand, and I expect to see the trend of acquisitions of smaller assessment companies by non-assessment companies to continue in the near future.
  6. Increasing collection of positive results. Nothing increases interest in something like the ability to demonstrate proven results. As more and more companies are starting to use assessment tools, there are an increasing number of success stories to be told about the value of assessment tools. When done correctly, assessment can have a significant, measurable impact on many work-related outcomes. Increases in the use of technology to collect and report assessment results have made it even easier to demonstrate the return on investment of these systems. I firmly believe that the ability to demonstrate bottom-line financial impact of assessment tools is essential for their continued adoption. Assessment is an important component of the growing and long overdue HR metrics trend.

While the above reasons chronicle some really great progress, when it comes to the adoption of assessment tools, we still have a long way to go. While many organizations use these tools, they are still being treated experimentally in most cases. This means that organizations may use them for only a few jobs in isolated locations. This usage pattern is often the result of firefighting tactics employed in a distributed manner. For instance, a VP of sales for a business unit of a large company with the ability to make her own decisions may read an article about assessments and decide to try them as a way to increase sagging sales in her area. We have a long way to go before assessments are used in a more widespread manner. Below are some of the major obstacles that I feel must be faced moving forward:

  1. Education. More knowledge of what assessment is and how to use it properly is still badly needed. Deciding to use assessment is no enough; knowing what type of assessment to use when can make the difference between success and failure.
  2. Ability to distinguish between a good product and bunk. As the market grows there will undoubtedly be an increase in the number of vendors who are selling junk assessments. This has been a problem for a long time but the bigger the potential revenue pie, the more hucksters will begin to surface.
  3. Cultural issues. If the people who will be using assessments don’t believe in them or aren’t willing to help provide the data required to demonstrate its effectiveness, all of the time and effort spent developing an assessment program will be wasted.
  4. Security and legal issues. Both represent realistic problems, but both are relatively easy to overcome with knowledge and creativity. Neither represent obstacles big enough to preclude the use of assessments.
  5. Lack of vision for assessment in the big picture. Organizations are still using assessment tactically. While this provides some great hands-on experience, it falls well short of the potential for broader strategic initiatives that tie hiring processes with broad-based and long-term organizational strategy.

Dr. Charles Handler is a thought leader, analyst, and practitioner in the talent assessment and human capital space. Throughout his career Dr. Handler has specialized in developing effective, legally defensible employee selection systems. 

Since 2001 Dr. Handler has served as the president and founder of Rocket-Hire, a vendor neutral consultancy dedicated to creating and driving innovation in talent assessment.  Dr. Handler has helped companies such as Intuit, Wells Fargo, KPMG, Scotia Bank, Hilton Worldwide, and Humana to design, implement, and measure impactful employee selection processes.

Through his prolific writing for media outlets such as, his work as a pre-hire assessment analyst for Bersin by Deloitte, and worldwide public speaking, Dr. Handler is a highly visible futurist and evangelist for the talent assessment space. Throughout his career, Dr. Handler has been on the forefront of innovation in the talent assessment space, applying his sound foundation in psychometrics to helping drive innovation in assessments through the use of gaming, social media, big data, and other advanced technologies.

Dr. Handler holds a M.S. and Ph.D. in Industrial/Organizational Psychology from Louisiana State University.







2 Comments on “Trend Analysis: Why Is Online Assessment Gaining in Popularity?

  1. I hate to be the voice of disention, but I still hold that the most of the managers who implement these tests are only trying to justify their own existance to senior managers who don’t have a clue what is going on in the recruiting department.

    In many cases, companies are implementing these tests to satisfy recent insurance company requirements. (is there any factor of our lives the insurance companies don’t control?).

    I have used these tests for years, but have yet to see any proof that these tests improve the quality of anyone’s workforce.

    In my experience, the performance of candidates hired using these tests were no better, and often worse, than those hired using traditional interviewing methods. When I bring this to the attention of the test creators, the industry standard answer is ‘well, then you must not be implementing them correctly’ – even though in every case we had the company manage the testing process.

    There is one common thread I have seen. Candidates who pass these tests seem to have less ‘personality’ than those that failed. In a recent 8-month hiring project I just completed, we were processing 400-800 candidates per week. Everyone working there noticed a decrease in ‘personality’ (happiness, joviality, frivolity, – basically ability to have fun) during our weekly candidate processing after the tests than we had before they were implemented.

    I am on a project now with a company who uses a standardized test designed for Electricians. What blows me away is that this test turns away not only the weakest electricians, but the most talented as well because the creator of the test claims that these people are ‘too smart’ or ‘too creative’ to make a good employee. To me this is a total crock. Again, this test was implemented to satisfy insurance company requirements, not because the company had any problems hiring good employees.

    In 2001, I recruited for a sales company that wanted to implement the tests because of poor performance from some recent hires. I insisted that all managers and field sales take it as well (my reasoning was to set a baseline to compare against new candidates). Nearly all the managers failed the test, and for field sales, the scoring of the tests was the inverse of the commissions paid to the taker. Field sales people who had been making up to $800,000/year in commissions failed miserably (the test said resoundingly ‘DO NOT HIRE’) while fresh from college, no experience types passed with top scores. One manager made a perfect score, but his region had the worst performance in the nation and he was fired within 2 weeks after taking the test.

    I would rather see companies focus on teaching solid performance based interviewing skills than waste any more money on these tests. Unfortunately, managers and insurance companies being what they are, I can only see more of them in our future.

    Now, there is ONLY one area where I think these tests might help: situations where you need to hire large volumes of unskilled hourly labor. Here, a personality test would be helpful. Even in this case, these tests only work if your available workforce is large enough to allow you to throw away a percentage of candidates willing to do what you need done.

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  2. Thanks for your insight and sharing your experiences.

    While I am a staunch proponent of the use of pre-employment tests, I am the first to say that they are not always the best solution in every situation.

    I believe there are many reasons why these tests are a valuable asset to organizations. However, they are not a simple ‘plug and play’ solution.
    In order for assessments to add value they must be properly selected and implemented and their results properly analyzed. I think these things go well beyond the ‘typical’ vendor response you noted- that poor results must mean that the wrong test was used.

    In my opinion, for tests to be a useful tool the following must occur:

    1. They must be selected based on a well defined set of desired work outcomes and it must be established that these work outcomes are best predicted using a test. In the case of personality tests- these tests have long suffered from problems due to the difficulty of tightly linking their content to job performance. They can be ‘fluffy’ and the inability to link the test to job performance criteria is type of thing makes it hard to clearly demonsrate the value the test will have.
    Not every hiring situation warrants a personality test.

    2. They must be used as only one piece of information that can help facilitate the decision making process- not as an all or none proposition. Tests offer a great compliment to the structured behavioral interviews you discuss.
    As you accurately suggest, as jobs get more complex, it is going to take more then just one personality test to predict performance. Complex job performance requires different types of data to be collected and used by qualified hiring personnel to assemble a predicitive picture of the fit between an individual and a job.

    3. Managers and those using the tests must accept them as useful and be able to clearly understand the value they add. The less job related, the more complex or cumbersome the test is, the less managers will buy into their value.

    4. Their ROI should be examined whenever possible. That is if you are testing and you have a decent volume of persons being tested for a job opening, it is imperative that you make sure to examine the predictive accuracy of the test. If the test isnt predicting, it is easy to think about refining the hiring process by looking for the problems that still exist.

    5. Choose vendors wisely. There are lots of different tests and methodologies for using them available. Some of these are better then others. I am aware of many situations where an organization decides to choose a vendor who may not actually be able to provide the best test for the organizations needs. If the vendor does not have the most appropriate test, many of them will ‘perscribe’ another test that they do have.
    This can present problems because if you are using a test that is not optimal for the outcomes you are trying to predict- the ability of the test to demonstrate value will be greatly reduced.

    At the end of the day, all hiring activities are nothing more then a prediction about how well someone will perform a job. There are many ways to do this and testing is only one of these. Making a good hiring decision is a blend of two things- gathering enough predicitive data to help learn about an applicant’s capabilities relative to job requirements and having hiring personnel who have the experience and ability to accurately interpret this data and use it to their advantage. No matter what the situation, the mantra must be establishing the job relatedness of the data that is collected and the understanding of the benefits and limitations of this information.

    Thanks for your insights- I hope mine are useful to you.


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