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Will a Pre-Employment Assessment Solve All of Our Problems?

September 16, 2014

New clients come to me all the time because they have such an expensive problem called “turnover”. After all, when you study the research it is common to see that turnover costs companies somewhere between 90% to 200% of that employee’s annual salary. That’s potentially $80,000 for the loss of an employee earning $40,000 per year. Really? These numbers to some might seem inflated or ambiguous but when you break it down…turnover adds up. Just consider the following costs:

  • Recruitinghci
  • Training for old and new employees
  • Exit interviews
  • Workload burdens on colleagues and manager
  • Loss of productivity
  • Loss of revenue
  • Loss of knowledge
  • Loss of customers

When this problem gets out of control, it can easily creep into the millions of dollars for many companies, and reducing turnover quickly becomes a priority. Often times, the HR department determines that if they could just hire the best candidates, the problem will go away. One of the most effective ways to identify the “best” in a sea of candidates is to employ a web based pre-hire assessment.

Utilizing a powerful assessment tool will improve the hiring decision making process. It will provide data points that will uncover blind spots and/or confirm other candidate assumptions. It will also help you match the candidate’s “fit” within your organization. Fit is one of the best predictors of turnover and retention, and something that many companies overlook. Select’s partners typically see a reduction in turnover within the first couple of months after assessment implementation. However, is the pre-hire assessment a silver bullet for all of the turnover woes?

The short answer: No. Assessments are not magic, although they are effective. Organizations need to consider all the reasons why employees quit. Here's a few that might be hurting your organization:

1. I hate my boss!

Yes, good employees quit their boss, and not the job. This is often times due to an ineffectiveness of the supervisor to communicate well. He/she needs to coach, mentor and develop the employee, show appreciation for hard work, provide feedback and respect. Often times, new employees are left on an island and isolated.

2. My pay is too low!

Turnover will haunt you unless you are competitive in the marketplace. Money is a strong motivator, however, it can be balanced with other factors like recognition, affiliation, power and achievement. Money is a larger factor in more entry level jobs.

3. I wasn’t trained!

A good on-boarding program should be highlighted during the recruiting process. Good hires inherently want to do well on the job and get up to speed quickly. It is in the organization’s best interest as well.

4. Not what I expected!

New hires need to know what to expect when they accept a position. Realistic job previews are an effective way to give candidates an in-depth look at the position. This helps candidates screen themselves out if they know they won't be a good fit. As stated earlier, job fit is a high predictor of turnover and it is crucial to make the match pre-hire. Those not aligned will likely leave.

Ultimately, any organization that seeks to reduce turnover needs to consider a multi-faceted approach.  Improving the hiring selection process will certainly screen in the best people (better quality and fit). However, addressing other HR related attributes, along with selection, will likely move the dial even further. Along with pre-hire assessments, I always suggest taking a look at your supervisors and improving the selection and development initiatives on that group.

all employee assessment alike

John Mirtich John Mirtich is a Senior Consultant and Business Development Manager based in the Cleveland office of PSI. After joining PSI, he honed his I/O skills by implementing entry-level selection systems, designing leadership development programs and managing the executive assessment process.