And it’s disrupting the long-established cottage industry of employer assessments. How? It’s removing the expensive, time-consuming, white-glove nature of intermediaries, which companies have relied on for more than fifty years. It’s now about delivering deep insights in real time to all employees.
Not only this, the kind of assessment tool we’re talking about is now integrated within a company’s existing communication and collaboration tech stack, scaling insights across the organization and driving more informed decision making on a daily or weekly basis, at all levels of an organization. The result: all employees can more quickly and positively impact business outcomes.
A Quick History in Employer Assessments
The world of employer assessments is age old. Based on historically recorded information, the first pre-employment cognitive testing may have been used during the imperial examination in China, dating back to the Han Dynasty (206 BC – 220 AD). Its use was standardized during the Song Dynasty (960 AD – 1279 AD) as a civil service exam for candidates wishing to enter the state bureaucracy. The imperial examination tested candidates’ knowledge on topics such as civil law and fiscal policy, and helped the nation transition from a military ruling class to a scholarly one.
Objective personality testing began with Woodworth’s Personal Data Sheet in 1917. That test was developed to identify soldiers prone to nervous breakdowns during enemy bombardment as well as shell shock during World War I. Soon after, many competing personality tests were developed for use in American industry. Many of these tests focused on the construct of employee maladjustment and were deemed important in screening out applicants who would create workplace disturbances.
As time went on, many types of personality assessment tools were developed. One famous test used in the early 20th century was the MMPI, Minnesota Multiphasic Personality Inventory. Established as a way of determining psychopathology, it was used in some cases as a hiring assessment until the Equal Employment Opportunity Commission stopped its use as a violation of the standards of non-discrimination.
Another, established in 1943, was the MBTI or Myers-Briggs Type Inventory, and it has served as a popular assessment for a number of purposes, including executive development. It was inspired by the work of renowned Swiss psychiatrist Carl Jung. While useful for staff development, it has demonstrated limitations in the selection of candidates and for other employer assessment goals.
The use of other employer assessments and skills tests continues to proliferate the business world. Millions of workers take assessments each year as part of personnel selection, to improve collaboration and teamwork, and to identify next steps in a career path. On its own, personality testing is a $500 million industry, with an annual growth rate estimated at 10 to 15 percent.
Employers are continuing to use hiring, leadership, and employee mobility assessments to gather data points that will enable more informed decisions in the area most critical to the company’s success – its people. Making the wrong decision can be very expensive, so HR departments, executives, and team leaders rely on these tests – some with more success than others – even though most of these tools have failed to keep pace with the changing needs of today’s workforce.
The Problem with Today’s Employer Assessments
Thankfully, employer assessment tools have evolved significantly since their early days. For example, the ability to take an assessment online, from anywhere in the world, has made them much more attractive than they once were, and algorithms can score tests quickly and easily. A wide variety of instruments can be used this way: Cognitive Ability Tests, Integrity Tests, Interviews, Job Knowledge Tests, and Personality Tests.
According to G2, there are 189 tools in the market – but that’s just a listing of pre-employment testing software! So while many of these tools are certainly continuing to evolve – albeit slowly – their limitations remain glaring, especially those in the personality assessment category.
To get any kind of value from these tools, many require external consultants or facilitators who are certified in particular assessment methodology. This then requires a highly manual implementation process whereby data is collected, aggregated, and analyzed by that consultant – and that takes time. This is why employer assessments have required an intermediary and remained within the domain of costly certified consultants.
The critical output often remains trapped in a workbook that never gets looked at again once the workshop is complete. That data is never integrated or delivered as consumable insights that can be used by the employee or company on an ongoing basis.
In addition, some assessments take upwards of 30-45 minutes for candidates or employees to complete, and may only serve a very narrow use case – for example, executive leadership development or hiring, making it difficult to justify cost. In fact, the average cost of a personality assessment can range anywhere from $50 up to $5,000 per candidate or employee, depending on the breadth of the assessment and analysis required by the consultant.
You might think that for the time investment, the data these assessments capture would be expensive. However, many only measure behaviors or tendencies, which is just the tip of the iceberg when it comes to your employees. To get deep and robust predictive performance insights, assessments should go below the surface and also measure people’s motivators or values, as well as their work styles or energizers.
Those that do take at least one hour to complete and are so cost prohibitive that they’re only reserved for the C-Suite or other executives. But the truth is, companies don’t succeed because of executive performance. They succeed when the other 90% of the organization have the insights and tools needed to effectively collaborate with one another.
It’s not all dismal though. Personality assessments can be very helpful in identifying the right kind of person for a role, to complement your existing team, or to help navigate conflict that currently exists on a team; and they can be particularly effective when aligning leadership teams. However, the most effective assessments are the one-stop shops that can serve multiple purposes at once: that is, use the data to hire and build more balanced teams, for leadership and team building, and to identify high potential employees and possible development and promotion paths.
The Future of Employer Assessments: How it’s Different & Why it Works
A new assessment is here, and it solves these decade-old problems – using the power of technology and data analytics in ways that weren’t possible even five years ago. It takes the age-old science of psychometric personality tests and modernizes it in a comprehensive, SaaS-based platform so you can use it for pre-hiring, leadership development, and improved team performance all at once, across the entire organization. And the result is an opportunity for companies to finally take their data and be able to apply it in ways that can transform culture.
Assessments and team culture are rarely mentioned in the same sentence. But one company is changing that – taking those once siloed assessment insights and creating a new culture-building toolkit, called Humantelligence.
Humantelligence has evolved the employer assessment well beyond the capabilities of today’s well-known assessment tools and is using it as the foundation for helping companies transform culture. In its approach, the company addresses the five critical problems of today’s assessments head on:
- Relying on intermediary consultants/facilitators
- Narrow uses & incomplete data sets
- High costs
- Lengthy implementations & time-consuming tests
- Limited ability to act on the data
The Humantelligence assessment is:
- SaaS based, meaning results are delivered immediately to the test taker and company, aggregated, and don’t require a consultant
- Most comprehensive and still quick to take: most assessments only measure behaviors, while this tool measures Behaviors + Motivators + Work Energizers (BMW)
- More affordable because of its SaaS-based delivery
- 12 minutes per assessment to measure behaviors, motivators, and work energizers, and enterprise-wide implementation in 48 hours, even as hundreds or thousands of employees take their assessments concurrently.
- Integrated with existing communication & collaboration tech stacks to deliver deep but consumable insights: scalable and fast, Humantelligence embeds the assessment insights into your existing communication tools – Microsoft Teams, Outlook, Gmail, Slack, and others – to enable better collaboration for ALL employees.
As a result of using a platform like this, companies can finally leverage their employee assessment data to operationalize their team cultures. They can make the kind of hires that balance teams, enable better connection and collaboration among employees, improve performance and effectiveness, and in effect, create a solid foundation for the belonging and inclusion of its team members.
By disintermediating the assessment industry – that is, bringing deeper insights direct to the consumer faster, that can be used across the employee experience to transform culture – the platform lends itself to a newer categorical label: Culture-as-a-Service (CaaS)
The Benefits of CaaS
Making the business case for using personality assessments can be an uphill struggle. Making the case for Culture-as-a-Service solutions can be much easier. Because the data is part of a broader platform used for multiple purposes across the employee experience – to make more aligned hires, create a more human-centric onboarding experience, identify the right internal candidates for promotion or leadership development, and improve team collaboration – companies can measure a positive return on investment (ROI).
As an example, a powerful business case will demonstrate the ROI based on identifying the costs associated with poor hiring or promotion decisions. Questions to consider:
- How much does the recruitment / selection process cost for your company/team?
- How much does it cost to train someone in a new role?
- How much does it cost the business while they are getting up to speed?
- How much does it cost in re-training or performance management if a staff member is under-performing?
- How much does it cost to replace someone on your team?
- What impact does it have on others in the business if someone is under-performing (e.g. colleagues “carrying” their work or becoming demotivated themselves; managers demotivating their team; a leader setting the wrong direction)?
In general, the Society for Human Resource Management (SHRM) reported that on average it costs a company six to nine months of an employee’s salary to replace him or her. For an employee making $60,000 per year, that comes out to $30,000 – $45,000 in recruiting and training costs. So based on your answers to the above questions, you can be sure the one-time cost of a Culture-as-a-Service platform is a drop in the ocean in comparison.
Beyond ROI, CaaS places an emphasis on investing in people, by eliminating inner silos and introducing better communication and feedback loops inside an organization. In the new world of assessment, CaaS products will be developed with a view of building team culture that is both scalable and simple, as well as consistent and effective for employers. It will be digital-first, with the addition of features that facilitate the new world of in-person and remote work.
Ultimately, the CaaS model of assessment creates a more open and inclusive organization where ideas flourish and collaboration becomes the norm – and the return on that is infinite.
If you’d like to use assessments that can improve your team culture and performance, schedule some time with us.