Hiring a new employee is a large financial investment, and potentially a risky one if your recruitment process isn’t optimised. Consider the costs involved:
– Salary, benefits and allowances
– Hiring costs – estimated at an average of $6,058 AUD
– Time-to-fill– it takes an average of 42 days to fill an open position
– Productivity lag – one estimation suggests that employees may take up to two years to reach their full productivity, and therefore provide full ROI on their salary
– Opportunity costs – HR personnel and/or the business owner must dedicate time to recruiting a new employee that could otherwise be spent elsewhere in the organisation
– Initial training costs – estimated at an average of $3,738 AUD
All business owners know that it is necessary to hire new employees to maintain growth momentum. They do so in the hope that future gains from increased productivity will offset the cost of investment. It is therefore essential that they implement a robust recruitment process which maximises their chance of selecting future high performing employees.
Psychometric assessments provide an easy, efficient, and incredibly accurate way of achieving this goal. They have proven utility in improving selection of high performers, reducing turnover rates, improving employee development outcomes and enhancing succession planning. However, only half of companies globally utilise Psychometric assessments.
Your first reaction if you don’t use these assessments may be that they are too expensive. You may question why you should implement them after reading the above statistics on how expensive the hiring process is already. This is an understandable reaction; however, I’d like you to think back to the last time you made a major investment. This could be a car, a house, or equipment for your workplace. When you made these purchases, I imagine one of the first things you would have done is to purchase an insurance plan to make sure your investment was protected.
We don’t think twice when we take out property insurance. So why would we think differently when it comes to protecting our investment in the recruitment process? Recruiting a new employee is a big and costly decision – and we would therefore want to ensure we make the right choice.
Psychometrics allow us to consistently make this right choice. Yes, they do represent an additional cost during the recruitment process. However, this is far outweighed by their return on investment. Consider these figures for a leading psychometric assessment, Profiles International, when compared to a baseline process of solely relying on interviews and reference checks:
– Increase in selection of high performers by over 300%.
+ High performers are over 40% more productive than average performers
– Reduction in turnover rate by over 45%.
+ Turnover costs have been estimated between 6-9 months’ salary on average, and will require you investing more money in recruitment following them leaving
– Average ROI of over 25 times.
By using assessments such as Profiles International, you ensure that the time and monetary investment you made in recruiting a new employee will be well spent. The fact is that these assessments can be administered, interpreted, and procured easier than ever before, and in fact provide greater hiring results than the traditional method of using only interviews and reference checks to select employees.
Researchers since the start of the 20th Century have questioned the reliability and validity of interviews as a sole method of selecting employees. There is no better time than the present to optimise your recruitment process, and protect your investment in your employees.
 Society for Human Resource Management. (2016). Average Cost-per-Hire for Companies is $4,129, SHRM Survey Finds. Retrieved from https://tinyurl.com/y7fzo9c
 Society for Human Resource Management. (2016). Average Cost-per-Hire for Companies is $4,129, SHRM Survey Finds. Retrieved from https://tinyurl.com/y7fzo9cq
 Training Industry Quarterly. (2012). How Long Doe sit Take to Get Fully Productive? Retrieved from https://tinyurl.com/yjhl7tm2
 BambooHR. (2019). Cost of Onboarding Calculator. Retrieved from https://tinyurl.com/yj5mb6h5
 American Psychological Association. (2019). Psychometric Testing in the Workplace. Retrieved from
 Forbes. (2014). Extraordinary Individual Performers: The Difference Between Good and Great. Retrieved from https://tinyurl.com/yhfw984w
 PeopleKeep. (2019). Employee Retention – The Real Cost of Losing an Employee | 2019. Retrieved from https://tinyurl.com/y8lph3kd
 Campion, M.A., Pusell, E.D., & Brown, B.K. (1988). Structured Interviewing: Raising the Psychometric Properties of the Employment Interview. Personnel Psychology, 41, 1-18. Retrieved from Wiley Online Library.