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Myths of Preemployment Testing

Preemployment Testing-SF
May 10, 2017

By Mike Poskey
President
ZERORISK HR, Inc.

Business executives who choose not to use preemployment testing in their hiring processes cite a number of reasons for their decisions. Unfortunately, four of the most common objections are based on myth instead of reality. These are (1) "We'll be sued," (2) "It costs too much," (3) "It takes too much time," and (4) "It doesn't work."

This article sheds some realistic light on these myths to illuminate how integrating preemployment testing into your hiring process can increase retention and productivity, as well as decrease the likelihood of employment practices lawsuits.

Myth #1—"We'll Be Sued."

Nowadays, anyone can be sued for anything. However, the proper use of testing as a selection tool actually reduces the likelihood of being sued for the following three reasons.

    1. The selection process is more fair. Personal biases of interviewers often lead to discrimination claims. Because validated tests do not discriminate according to age, sex, race, national origin, or religion, using them can reduce subjective biases, making the process more fair for all candidates.

    2. It helps companies comply with federal requirements. The Equal Employment Opportunity Commission requires that companies use "best reasonable efforts" to remove biases from their hiring process. The use of an objective validated test helps companies comply with the federal requirement.

    3. You don't hire "problem employees." The greatest risk to an employer is hiring the wrong person. In the best case, the person simply doesn't work out and leaves, which is a costly scenario. In the worst case, the person steals from you or harasses or injures someone. The liability risks of hiring the wrong person are much greater than the risk of being found liable for not hiring him or her in the first place. If testing helps you make better hiring decisions, you are simply less likely to be sued!

A review of the lawsuits over preemployment testing proves this conclusion true. I have been unable to unearth a single court case where a company was found liable because of preemployment testing when the test was designed and validated as a selection tool and validated to have no adverse impact against a protected class (i.e., race, religion, sex, age, national origin).

 Myth #2—"Preemployment Testing Costs Too Much."

As with any business decision, a company must weigh the costs versus the benefits when conducting preemployment testing. Most preemployment tests range from $25 to $200 per use. Most human resources professionals would agree that the cost of a bad hiring decision that results in turnover is at least twice the person's salary when you factor in lost opportunity, decreased productivity, and recruitment and administrative costs. Besides the obvious costs of making a bad selection decision, a good hiring test can also significantly reduce the costs to prepare for an interview and train new hires since your new hires will be more suited for the job, company culture, and manager's style.

For every dollar an employer invests in personnel screening, the savings range from $5 to $16 in reduced absenteeism, improved productivity, lower turnover, safer working environments, reduced insurance premiums, and decreased employer liability. (Small Business Administration.)

It will be far less expensive to defend your use of a proven, reliable, and valid test than to defend hiring practices that do not include objective, nondiscriminatory testing. In addition, it's far less expensive to use testing to ensure you hire an employee who will be more productive immediately than to pay your managers to oversee problem employees and engage in a revolving-door recruitment process.

Myth #3—"It Is Too Time Consuming."

There are many tests on the market that take anywhere from 10 minutes to more than 2 hours to complete. Some require an administrator while others do not. However, there are some very good tests that can be completed in 15–30 minutes and can be administered via the Internet and completed at home by the candidate. Depending on the level and type of position you are trying to fill, some of the quicker tests will meet your needs.

As for the feedback such tests provide, an effectively designed interviewing and selection report substantially reduces the time needed to train interviewers and prepare and conduct an interview for the following reasons.

  • An effective interviewing report will provide recruiters and department managers guidance on key strengths and weaknesses of the candidate to allow them to focus their valuable time on the critical areas necessary for success in the respective role/position instead of focusing their interview time on less critical areas.

  • An effective interviewing report will provide suggested interview questions that are legal to ask in an interview.

One executive who currently utilizes a behavioral-based preemployment testing program sums it up this way: "It actually expedites our interviewing process tremendously by assisting us in cutting to the chase in determining a candidate's strengths and weaknesses."

Myth #4—"Testing Doesn't Work."

More and more companies are utilizing some form of behavioral preemployment testing for more consistent and accurate hiring decisions. In a recent survey, 40 percent of Fortune 100 companies indicated that their employment selection systems included testing. A similar survey by the American Management Association showed that 44 percent of its responding members used testing to help select employees.

Here's what a human resources director of a Fortune 500 company in Houston had to say about the preemployment test it uses for selection.

Historically, our industry experiences extremely high turnover, and as such we have been looking for a tool to help put the right person in the right job. Since we began using a behavioral-based selection tool to help in our sales selection process, our retention has jumped from 10 to 77 percent, which we have calculated saved us $32 million over the past 12 months in related turnover and lost opportunity costs. (HR director, Group 1 Automotive.)

If 40 percent of the Fortune 100 companies utilize some form of preemployment testing, there must be some evidence it works; otherwise, they wouldn't spend the money.

Conclusion

With the unemployment rate dropping and the retirement of large numbers of baby boomers, it is becoming more and more challenging to find and hire good talent. It is extremely important to make the best possible hiring decisions in this type of environment. Doing so requires a top-notch hiring process that includes preemployment testing, effective interviewing, and careful reference and credential checking (see also "Interview for Success, and Avoid the Legal Pitfalls").

Mike Poskey is president of ZERORISK HR, Inc. ZERORISK HR helps organizations build great cultures by identifying, hiring, developing, and retaining top talent.

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