New Research Indicates a Much-Needed Emphasis on Assessments

It's a common belief that candidates hate taking tests. It's also a wrong belief.

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May 31, 2023

An unprecedented level of disruption is barreling down on employers and their workforces, according to the World Economic Forum’s (WEF) “Future of Jobs Report 2023.” Due to the convergence of forces — including technological advancements, economic challenges, and the need to transition to greener businesses practices — employers estimate that nearly half of their workers’ skills will be disrupted in the next five years.

But haven’t we already been barreling down this path?

We most certainly have, and even more so now. The report notes that traditional skills (reading, writing, mathematics, and manual dexterity, among others) are being superseded by analytical thinking, creative thinking, and self-efficacy skills such as resilience, flexibility, and agility. As a result, many employers that participated in WEF’s research plan to invest in reskilling and upskilling initiatives to embed these new skills within their organizations.

As crucial as they are, these initiatives will accomplish only so much. The need for a continuous stream of new talent simply can’t be reskilled or upskilled away. The problem is finding new qualified talent has never been so challenging.

Skills-First Hiring to the Rescue

The World Economic Forum acknowledged the difficulty of finding the right talent recently in another prescient piece, “Why skills-first hiring is the solution to the global talent shortage.

As the WEF writes, “Exacerbated by the COVID-19 pandemic and an aging population, the scarcity of skilled workers has employers feeling the crunch.” There are still nearly 10 million open jobs in the U.S. alone, the article points out, and employers aren’t doing themselves any favors by taking an education-first or experience-first approach to recruiting. Even with hiring cooling, it’s still steady across many industries, but the reality is that many of those 10 million positions aren’t getting filled with the recruiting and hiring status quo.

For example, having a degree requirement for a job automatically disqualifies nearly 65% of working-age adults in the U.S. who don’t possess a bachelor’s degree. And with more and more jobs now requiring a bachelor’s degree, the WEF notes that roughly 80 million prime working-age Americans are excluded from these roles. That approach no longer makes sense for our talent-starved businesses.

Enter skills-based hiring.

“Hiring based on skills is five times more predictive of job performance than hiring based on education and more than twice as predictive as hiring based on work experience,” the WEF writes. “Employees who feel their skills are not being put to good use in their current job are 10 times more likely to be looking for a new job, compared to those who do feel their skills are being put to good use.”

Numbers like those are hard to argue against. Even so, I don’t believe that skills-first hiring is a standalone solution to the world’s talent gaps. Neither are reskilling and upskilling. The fact is that we’re not facing an either/or choice. To fix the global talent shortage, we’ll need to implement all three of these solutions.

Assessments and Tests in the Spotlight

One issue that the WEF did not address is how all three of these solutions place additional importance on assessments and testing.

To reskill and upskill their workforces, employers need to know exactly what and where their workforce’s skill gaps are. This requires rigorous testing and assessment. The same is true for a skills-first recruiting approach; recruiters and hiring managers need to understand the specific skills their roles require and then assess whether candidates possess these skills, to what level, and whether these skills are actually aligned to the candidates’ career goals and ambitions (a crucial indicator of long-term satisfaction and retention).

Without reliable assessments and tests, it’s impossible to leverage a skills-first recruiting strategy. Unfortunately, employers can’t just throw a switch to click over to a skills-first strategy. It takes time and effort to find the right assessment and testing solutions, embed them into the recruiting process, and train TA teams to utilize them effectively. And as Talent Board’s latest candidate experience benchmark research reveals, many employers have yet to fully embrace assessments and testing:

  • In 2022, less than half (45%) of North American employers used pre-employment assessment and selection tests prior to conducting interviews, and only 19% did so post-interview. Clearly, a significant number of employers are missing key opportunities to gain valuable insights that can help them fill their organizations’ skill gaps.
  • While 46% of North American employers do use assessments to determine candidates’ job-specific skills, only 26% use cognitive/ability-related assessments, 26% use competency-related assessments, and just 15% use situational judgment tests. As the WEF’s research points out, these latter types of assessments are actually more crucial to the future of work and employers’ long-term needs.
  • When asked about the types of assessments and tests they actually encounter in their job searches, in North America only 27% of candidates said they were asked to respond to simulated job tasks and activities, and 42% said they engaged in behavioral and/or personality assessments. Again, this indicates that far too many employers are missing out on opportunities to find the talent they truly need.

It is worth noting that in Talent Board’s 11+ years of researching candidate experience, assessments and tests have always had a positive impact on the perceived fairness of a company’s recruiting process. In other words, when candidates encounter assessments and tests during the recruiting process, they perceive the process to be fairer and they rate it higher than processes that forego assessments and testing. And that increases further when they’re given feedback about their assessment results.

Also noteworthy is the fact that, in our 2022 research, women, people of color, and younger candidates all expressed higher levels of perceived fairness following recruitment-related assessments. So employers interested in improving their employment brand’s respect for DEI would do well to more fully embrace testing and assessments as part of the candidate experience.

Candidate screenings, assessments, and tests have been around for decades — maybe long enough for employers to have grown a bit jaded regarding their use. But with reskilling, upskilling, and skills-first hiring set to skyrocket, it’s time for employers to get serious about assessments and testing again.

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