If you’ve applied for a job, chances are that you’ve taken some kind of psychometric test. For what it’s worth, psychometric assessments have been around since the early 20th century.

And they’re widely used; the commonly quoted statistic is that as many as 80% of the Fortune 500 use these kinds of tests in the recruitment process.

It’s a booming multi-million dollar industry because organizations recognize that making the right talent decision is big business.

Unfilled vacancies cost USD160 billion a year in productivity loss, and the cost of making the wrong hire can be two and a half times that person’s annual salary.

Ultimately, leaders are looking for data to back their talent decisions.

The dream is to take a peek behind the wizard’s curtain and determine, with certainty, that the hire you’ve made has the right skills, will commit to the role and the company, and that they will stick around.

With unstructured interviews being such a terrible and unreliable predictor of future success in a role, the obvious choice is to find an instrument that will bring much-needed objective data into the process.

To complete the data set, one approach is to use psychometric assessments as part of the recruitment process.

It is to gauge whether the candidate’s personality and cognitive abilities match the requirements of an open role. And as stated before, the major players are big fans.

But just because they are – does that mean you should?

What is psychometric testing?

Psychometric means measurement of the mind. An ambitious goal, to be sure.

A psychometric test, when applied in a recruitment context, aims to provide an objective, unbiased and standardized assessment of a candidate’s personality, behaviour, motivation, career interests, competencies and intellectual abilities.

They fit into the data arsenal of your talent strategy by helping you see past the résumé, past the voice on the other end of the phone and past the well-rehearsed, well-dressed, charismatic person in the interview room.

Hiring teams often apply psychometric tests to whittle down the number of applicants for a role to determine the best fit.

In many cases, organizations are driving large amounts of candidates through testing at the start of the hiring process to identify a smaller “suitable” pool of applicants, known as a shortlist.

Efficiency gains, both for the talent acquisition/recruitment team and hiring managers are the primary reason for using such tests to narrow down the candidate pool.

This is especially critical where teams are dealing with high-volume roles, or have a high volume of vacancies open.

And it’s not just about minimizing internal time and costs. When the best talent is off the market in just 10 days, it’s crucial for organizations to quickly and accurately make the right hiring decisions.

Misinterpreting the results

“People seem to think that having numbers is always better than not having numbers,” says professor in Organisational Psychology, Orin Davis.

“The reality is that numbers are only ever as good as the instruments they came from, and a great many tests tend to be rather poor, especially when applied to individuals and contexts.

It is one thing to measure whether a person tends to be more or less open to experiences relative to the average person, which is readily done with the Big Five personality test.

It is quite another to say that a specific person will be open to a specific experience. This is impossible to do with a personality test.”

Well-researched and validated psychometric tests aren’t in and of themselves problematic. Some are incredibly useful. The problems largely lie in a misinterpretation of the term, and the contexts in which they’re used.

Things start to get a bit tricky because “psychometric test” and “personality test” are often used interchangeably.

Personality tests hone in on an individual’s deeply held values and beliefs that shape their behaviour.

The purpose of assessing someone’s personality is to find some of those icky bits of behaviour that will impact someone’s performance on the job.

Fit for purpose

If not during the hiring process, when can you reliably use psychometric tests?

Hiring leaders should use them to understand the nature of the person at hand and how this information might help them to communicate and relate to you during their development.

The best way to use psychometric and personality assessments is as a single point in a larger decision-making process.

If you have a mechanism like Vervoe to capture someone’s skills and abilities related to the job, a personality assessment might give you additional indicators on their fit for specific types of roles.

So should psychometric tests be used for hiring?

The summary from the experts is resoundingly, “proceed with caution”.

While these assessments may be useful for improving team dynamics, to guide development or as a smaller piece of your bigger talent puzzle, they are not the best solution to base your hiring decisions on.

This article first appeared in vervoe.com.

At Vervoe, our mission is to fundamentally transform the hiring process from mediocracy to meritocracy.