Choose Wisely

According to the U.S. Department of Labor, it costs one-third of a new hire’s salary to replace them. The monetary loss of a bad hire coupled with the lost man-hours can prove fatal for small businesses. Finding the right employee is crucial to a company’s success. Consistently hiring dependable employees and maintaining high retention rates will go a long way in keeping large and small businesses alike in the black.

The purpose

Pre-employment personality testing generally measures one or more of the five personality characteristics: extroversion, agreeableness, emotional stability, conscientiousness and openness to experience. Thought of as a hiring tool exclusively for large corporations, there has been a rise in recent years in the use of personality tests by mid- and small-sized companies. According to, nearly 40% of employers use personality tests in their hiring processes.

“We use a Web-based tool, where a candidate can go online and take a test that has two different sections,” Jennifer Loftus, national director of Astron Solutions, a human resources (HR) consulting firm, said. “One is a cognitive test which is kind of like a scaled down SAT. The other is a series of 70 questions where we are measuring the different dimensions of a candidate’s personality.”

Along with being national director, Loftus also handles the HR duties at Astron Solutions therefore seeing HR from both sides.

“[Personality tests] are something that I do consider,” Loftus explained. “Looking at the person’s past experiences, their education and the fit with the organization all come into play as well. I can use it as input. But it is not the final decision maker.”

Loftus admits the tests she uses are very accurate, yet she also contends that a hiring manager needs to find the right balance for all the gathered information.


“Knowing when to trust the system is very important but equally important is not overlooking someone that may not have scored quite as high on one dimension,” she said. “You don’t want to immediately rule them out.”

Employers should use the pre-employment personality test as a supplementary tool. Acknowledge the results, but do not be afraid to look deeper.

“If you are looking for someone that is outgoing and sociable and you provide them a series of assessments only to find that they are introverts; that does mean the candidate can not adapt. That does not mean the candidate hasn’t adapted and learned how to be an excellent presenter or comfortable around large groups of people,”

Ira Wolfe, MA, DMD, founder of Success Performance Solutions said. “It does mean the candidate will consciously need to adjust each time he is called upon to do it.”

Wolfe worked 30 years in the health care industry and served on the medical staff, as a board member and as a vice president for Ephrata Community Hospital in Lancaster, Pa. before founding Success Performance Solutions. According to Wolfe, health care has seen an increase in the use of personality tests in recent years. This coincides with the industry’s growing concern over medical errors and patient safety.

“With more demands for patient satisfaction, hospital rankings coming out publicly, more concern about being sued and the risk of medical mistakes, health care is finally waking up to the idea [of using personality tests,]” Wolfe said.

Information gathered

Proponents of personality tests assert they are more objective than a face-to-face interview. Answers to questions on the test can be easily compared with other candidates, making the usually slow-moving hiring process more efficient. Pre-employment personality tests obtain information about a job candidate’s personality that may not be possible to find out in a half-hour interview.

“Professionally developed employment tests will help answer what are the abilities, knowledge, skills and other qualities that people should have, in order to do a particular job correctly, according to the employer’s perspective,” Deniz S. Ones, PhD, professor of psychology at the University of Minnesota said. “‘Other qualities’ include personality characteristics. The whole goal then becomes to assess those traits accurately.”

According to Ones and other experts, validated tests do accurately assess personality traits.

“If a company values honesty and integrity, we have ways of objectively assessing those things using tests that have been professionally developed and validated. Scientific information and data support their use,” Ones said. “It is the job of the work psychologist to determine, using statistical and professional techniques, the correct mix of what should be measured, in what order and how it is measured.”

Properly used, pre-employment personality tests are a valuable tool for employers. HR managers agree the more information gathered on a job candidate the greater the chance the employer will hire the right candidate.

“Hiring a good employee is so tough that you gather as much information as you can in order to make an informed decision,” Loftus said.

While many companies in various sectors of business use pre-employment personality assessments, questions remain about their worth.

The Costs of a Bad Hire

Hiring managers go to great lengths to find the right employee for a given company. All is analyzed and nothing is left to chance. With companies of all sizes struggling to survive, a bad hire can ultimately be the final blow to the bottom line. According to the Society for Human Resources Management, a company that replaces 150 employees each year at a salary of $50,000 per person would lose an estimated turnover cost of $2,250,000 in one year. There is too much at stake to follow gut feelings when employing a job candidate.

Team chemistry

There are many hidden costs to hiring the wrong job candidate. First, a new hire requires your employees to get acquainted with a new personality. This may be difficult and hurt many attributes that are harder to measure than dollars and cents. An example of this is team chemistry. If chemistry is low and there is a general lack of communication within the company, everyone suffers the consequences.

Time spent

From the HR perspective, finding a new hire requires time. Advertisements need to be placed. Calls need to be made. Resumes need to be reviewed and interviews conducted. All of this is taking away from productivity.

“Hiring managers do not want to do this again,” Debbie Hatke, MA, PHR, talent strategy manager for Strategic Human Resources Inc. said regarding the hiring procedure. “It’s not an easy process.”

Money spent

Many reputable human resources Web sites offer a bad hire calculator. According to, this calculator accounts for advertising costs, HR staffing costs, interviewing time and salary. The calculator is a quick way to determine if your company is spending too much on bad hires and the hiring process.

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A job candidate manipulating the personality test is an issue that has sparked debate within the industrial work psychology community. It seems obvious that job candidates will try to impress their possible employers during the interview process. This is why candidates come into interviews dressed in suits instead of a t-shirt and jeans. However, if applicants are lying on the tests, why should companies use them in the first place?

“Most personality tests that are used are called self-report,” Frederick P. Morgeson, PhD, professor of management at Michigan State University said. “The evidence is pretty clear that those are [manipulable].”

Researchers and industrial work psychologists have tried a variety of different strategies to overcome manipulation from asking more pointed questions to being less transparent, according to Morgeson. Many tests that are used have integrity scales included, which can be used as a warning sign to employers. Integrity tests may be used to measure a person’s honesty or negative impact on a company.

“Yes, people can fake these,” Wolfe admitted. “But, yes with a high reliability we can detect it.”

The question then becomes whether the lie or embellishments caused the employer to make a bad hiring decision.

Employers “need to gather information from job applicants who may or may not be misrepresenting themselves,” Ones said. “Once we hire these people onto the job, are the results of our test related to good performance? The overwhelming scientific evidence is yes, they are.”

Ones asserts that even though applicants may have managed impressions to a small degree in order to make themselves look better in the employer’s eyes, that the vast majority of applicants that did so have had good job performance and more importantly, better performance than those scoring lower on the tests in question.

“That’s the type of data that should not be ignored,” Ones said.

Financial implications

“The hiring decision is probably one of the most important decisions a company can make,” Morgeson told O&P Business News. “It is a huge long-term commitment.”

Personality test publishing is a $400 million industry according to The St. Petersburg Times. A simple online search can result in numerous sites promoting free personality tests. Companies that use free personality tests from questionable sources that lack validation, leave themselves open to discriminatory lawsuits.

Hiring managers can quickly find a personality test for as little as $20. Like any other industry, the more custom and detail oriented the test is, the more expensive it becomes. According to The St. Petersburg Times, the average test is close to $50. For a small business interviewing 10 candidates or more, the hiring process can get expensive. For some businesses, hiring managers would rather stick to the traditional, cost-efficient face-to-face interview.

“There are so many costs associated with the hiring process,” Debbie Hatke, MA, PHR, talent strategy manager for Strategic Human Resources, Inc., said. “It may be difficult for smaller companies.”

Hatke added that if her company was being impacted by the economy she would not use a personality test as a way to hasten the hiring process. Rushing a process that generally takes 3 to 4 weeks, would only hinder the HR representative and the company’s ability to make a crucial management and financial decision.

“You still have to weed through the 200 to 300 resumes that you receive,” Hatke said. “That process is still the same. It still comes down to gut and what you need.”— by Anthony Calabro

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