Shorter, sharper, cheaper: assessment hasn’t disappeared during the recession but organisations are certainly being cost conscious about it. This holds true whether assessment is being used to select new recruits or guide development decisions; it also means that very few organisations are extending its use into other areas such as redundancy management.
Professionals working in assessment report both lower overall numbers and tighter profit margins. For example, financial services and the public sector were both big users of assessment for selection but they have now either stopped using it entirely or have swapped from running assessment days – designed to fill 200 places – to one-off, one-position options, says Ameet Thakkar, a principal consultant at business psychologists OPP.
Dave Milner, consulting director, EMEA, at Kenexa, believes that the big change has been in the profitability of testing, not simply whether or not it is being used. “The marketplace has remained stable in volume, in the way in which it’s been used and the way in which different sectors use it,” he says. Margins may have been squeezed thanks to cost-conscious customers but volumes have stayed the same.
Either way, the recession may give the industry the jolt that it needs to prove its worth in the long run, says Justin Spray, a director at Mendas. “As a profession we have been complacent about showing that we make a big difference,” he says. “A lot of the assessment industry has been built against the backdrop of a benevolent economy.” Assessment for selection was driven largely by the demand for fairness until about a year ago. “The main issue [now] is value for money – is assessment adding anything? We have been found wanting. We don’t have the management information and the research to say that all the tools that we have been using are doing a good job in finding better people.”
But there are signs that organisations are looking to do just that. Over the past 12-18 months Wyn Davies, sales and marketing manager at Pearson Talent Assessment, has seen an increase in the number of clients, particularly from the professional services industry, wanting tools that test critical thinking in a very specific way. “Problem-solving and decision-making are always part of firms’ leadership competencies frameworks, and they are always linked to critical thinking,” he says.
Situational judgment tests are also becoming more popular – with candidates as well as recruiters, Milner says. Such tests have obvious benefits for potential employers, who get an idea of candidates’ on-the-ground abilities, but also allow individuals to get more of a sense of what the job involves and whether or not they are cut out for it.
Organisations are also looking for ways that assessment can help them to cut costs, for example by using online assessment to sift the growing number of applications received for each position (see also Troubleshooter, page 20). “However, I am not sure that it has been used that way by all recruiters,” Thakkar says. “The ones who already use it have stuck with it but people who are not using it could really benefit from it.”
One area that’s still relatively strong – despite an overall drop, partly linked to its association with graduate schemes – is online assessment for selection. The growth in cheap IT has seen an explosion in the number of online tools available, although Davies believes that clients tend to stick to brands they already know and trust to ensure that they are getting valid results. However, he is concerned that some tests now available online should really only be conducted under controlled conditions. “What we are seeing are more and more people using ability testing online,” he says. While situational judgement tests work well online, numerical ability and other intelligence tests can be tempting for cheaters. For example, someone could find the answers posted on another website, or ask a friend to help.
It’s possible to work around the first using “item banking” – where tests draw from hundreds of possible questions for each individual – while the second can largely be prevented by making sure that candidates know they will be retested under controlled conditions. “The risk is that people trying to cut costs will not repeat the tests,” Davies says.
Online technology is also being allied with informal situational judgement tests that allow potential candidates to self-select out, thus reducing the number of applications received by recruiters, and with psychometric tests that are being used as first-line sifting tools.
Lars Hyland, director of learning services at Brightwave, an e-learning provider, is also seeing a lot of interest in assessment and technology as part of induction programmes. Online “learning portals” let people sit tests that teach them about, say, the company’s products while allowing the organisation to track employees’ progression. They can even be used before a new hire starts work to help them feel that they are a part of the company and help them to hit the ground running.
However, while these options are being used, they are far from as widespread as they could be. “I think when budgets pick up again there will be a wider take-up,” Hyland says. “When we rebuild after the recession, HR will look different and have a much greater digital element to it. There will be more opportunities for companies recruiting to create virtual job experiences to test people’s understanding of the skills they need to do the job.”
Mendas’ Spray agrees. “I believe that online testing will continue to grow, but that we will see remote video technology brought in so the experience will get much richer,” he says. “I imagine that within five years what we call an assessment centre now will be done remotely from candidates’ own homes or offices.” This will be driven at least in part by continued pressure on costs, even after the recession ends, he says.
For the moment, even organisations that are still using assessment are trying to find ways to trim costs wherever they can. This can mean using external experts to design and lead a programme and to train in-house employees to implement it. “There has been a move away from full-day assessment to a much shorter, sharper approach,” Thakkar says. “There are definitely more companies wanting to know how to do it cheaply and there’s more training of in-house people.”
In-house involvement can have the added benefit of building credibility for the programme internally. “HR has to build its expertise because it has to show how it adds value to the organisation,” Milner says. The challenge is for in-house staff to develop a strategy that helps them keep in touch with the latest developments in the field. “There is a balance that needs to be struck. You should not lose touch with what external consultants can bring, which is new ways of looking at things.”
One area that seems to have been hit particularly hard by budgetary cuts is learning and development. “A lot of organisations are doing less development – it’s seen as an extra cost – but those that are still doing it are still using assessment,” Thakkar says. “We are still working with clients who are keeping people motivated by using development and giving them feedback using psychometric exercises so that they are more effective in their work.” He also believes that many organisations have missed the opportunity to use assessment as a redundancy selection tool; he has warned clients that using it could protect them from cutting people they would be better off keeping. “But that [message] is usually overridden by the speed needed and the fact that it is a capital cost at a time when the whole point is reducing cost,” he says.
Davies has also seen a drop in spending on psychometric testing for development in the private sector, but says that the public-sector market is relatively strong. “We are seeing assessment tools being used for development more than selection [in the public sector]. A lot of it is used for leadership in the context of employee engagement and well-being.”
Milner had actually expected to see activity increase in this area. “I am a little surprised that I have not seen people ramp up their development tests but maybe the cost challenge has been too much. I understand that but it is a missed opportunity.” He is also disappointed that organisations have not been using assessment more strategically in this area. “Six months ago I anticipated that it would have been used for retaining good people, engagement and development, but I have not seen a lot of it,” he says.
His predictions now are much bigger but a little less specific. “The situation is so different that I do not think that HR and learning functions will ever be the same again,” he says. “They will need to do assessment and learning differently, including how they buy such services. Perhaps there will be pay-as-you-go models or an annual licence fee. It will definitely be smarter procurement.”
When recruitment picks up again Thakkar expects to see assessment playing a critical part in sifting. Speed will also be an element: companies will need to balance the need for rigour against the risk that candidates with multiple options may see lengthy processes as an unnecessary delay. He also thinks that psychometric testing will take on extra prominence when recruiting for senior management positions, as organisations will want to avoid hiring people who will make the same mistakes that led to this recession. “And maybe, with everything that has happened, there will be more movement towards testing for more ethical leadership,” he says.
It’s certainly possible, but it’s hard to imagine many companies putting a profit-driven leader at the bottom of their assessment wish list once the post-crunch banker bashing has died down.
Case study: Avon Fire and Rescue Service
Avon Fire and Rescue Service turned to assessment to measure and improve the effectiveness of its leadership development.
Its supervisors and middle managers now sit a two-day assessment, designed in conjunction with Development Process Group, before they take on standard training courses provided by the Institute of Leadership and Management (ILM). Marc Anderson, group manager of people development at the service, says that pre-training assessment means that managers go into their 12-month ILM programme with a much better sense of their own strengths and weaknesses, which in turn allows them to concentrate on their training accordingly. “You get more out of off-the-shelf training when you understand what you need to learn,” Anderson says.
The first stage of the managerial assessment of proficiency (Map) process, conducted in a group, takes six intensive hours. “Participants have to watch a DVD and, as the day goes on, they will be analysing the key areas that it brings up,” Anderson says. “They have to use their own skills to decide how they would deal with situations presented as they occur.”
At the end of the first day their performance is assessed; the second day is devoted to both group and individual analysis of that performance. A year later – after they have completed their course – they resit the Map so that they and the service can see just how effectively their training has filled gaps and built on strengths. Results from the first cohort were positive: “In the main there was a definite development in individuals,” Anderson says.
Case study: Croydon Council
While some organisations have scaled back their use of assessment centres to cut recruitment costs, Croydon Council has saved money by introducing them, says Hayley Lewis, organisational development manager at the council.
“If you make the wrong decision, especially in senior positions, it’s very expensive,” she says. “Our analysis shows that on a basic £60,000 salary the wrong selection could cost the organisation anything up to £90,000 in terms of exit, the impact on productivity and so forth.”
She also argues that interviews alone are not enough to select the best candidate, not least because people tend to prefer people who are like themselves.
“There is still a place for interview but the assessment centre adds richness to the behavioural factors,” says Lewis.
Until last year the council used assessment sparingly, but when Lewis joined from the BBC she instituted a clear framework that offers three levels of assessment to suit the needs of individual hiring managers. Assessment ranges from a day-long process that includes role-play with actors and a personality analysis to a shorter programme that incorporates multiple-choice ability tests and an interview.
Lewis and her team have also worked hard to show hiring managers that assessment need not slow the recruitment process down – a big fear of managers hiring social workers, for example, is that in-demand candidates will be snapped up by other local authorities.
She is also building buy-in by training non-HR staff in assessment skills. “It’s not just about being in the assessment centre – it also gives you more skills in your day-to-day life.”
Case study: McDonald’s
McDonald’s has used offline assessment for a long time; its typical recruitment path for a restaurant-based position would be a face-to-face interview, perhaps in a group, followed by an on-the-job evaluation that could last anything from 30 minutes to a day, depending on the position. “The key with that was to get the candidate in a restaurant and really put them in that environment to be sure they felt that was right for them,” says Nicky Ivory, a resourcing and reputation consultant at the restaurant chain.
Last year, when it launched an online application system for all hourly paid positions, the restaurant chain decided to incorporate a psychometric assessment that could be used as a sifting technique to replace the first face-to-face interview. “The online test has taken out the first-stage interview and that’s where the cost savings have been made – we get 2,000 applications a day for hourly jobs. In the first year we saved £977,000 across the company.” Ivory and her team have also accumulated lots of data that can be used to measure long-term performance.
Online testing has not replaced face-to-face assessment. “We still use a face-to-face element [when recruiting] and we still feel that it’s important for people to come and spend some time in our restaurants. An online test can’t replace traditional assessment methods but it can enhance them.” Combining online and offline tests also helps to overcome the risk that a candidate may ask a friend to sit the computer-based test.