Disquieting trends in the psychometrics industry 16/11/2009

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Psychometric tests

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As the use of psychometrics continues to grow in the UK, so does the marketing that accompanies this maturing industry.

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The holy grail
Four trends in pscyhometric testing
Business results and psychometrics
HR tools, data and knowledge
A move away from science
Excessive pricing models
In summary

Dr Paul Englert, international business development manager, Psytech International

Dr Paul Englert, is a registered psychologist, published academic, and practitioner who has worked globally to make I/O psychology meaningful to business.

The holy grail

This is coupled with a plethora of new emerging assessments techniques all aimed at being the Holy Grail to organisational ills.

However, does this represent development or a merely the commercialisation of the industry at the expense of providing real value to UK business? Moreover, what is the truth behind the rhetoric and the reality of the testing industry? And what can business really expect back for the money they are investing in testing?

UK companies need to start making smart decisions about how best to use psychometrics and the data they provide in addressing business issues. When purchasing assessment services, practitioners are potentially being persuaded by marketing hype rather than real applied science. And they are paying a hefty price for it.

Four trends in pscyhometric testing

At Psytech International, we see four key trends now prevalent in the UK psychometrics industry that are indicative of the change in direction that assessments are on:

Business results attributed solely to psychometrics.
A reliance on research as if it was generally applicable across all organisations.
The lack of psychometric models of human behaviour rooted in the science of psychology.
A move towards a pricing model that restricts, rather than encourages use.

In this article I want to draw your attention to these four trends, identifying why they represent a step back for the industry and what needs to change for the assessment business to get more credibility back.

Business results and psychometrics

Can psychometric assessment really produce complete business outcomes on its own? It looks like the industry somewhat exaggerates what buyers can do and predict with psychometric data. Companies seem to promote an idea that psychometric assessments themselves are the solution, when in fact, when used in isolation, their value may be limited. While a potentially effective screening device, psychometrics alone cannot predict all of the complexity of job performance; it’s not a magic pill that will solve every business issue by itself.

The marketing of psychometric assessments must change so that consumers understand the true potential of what they are buying. Companies will not get maximum benefit from them if they are used purely as one off assessments and in separation from an integrated talent management strategy. Business solutions cannot be found solely in test data. We must be aware of the limits of using psychometrics, not oversimplify their use, and recognise their potential when used as part of an integrated approach. When excessively claims are made on their power – such as the implication that a test alone will save a company ‘millions’ – then questions of credibility must be asked.

HR tools, data and knowledge

Science uses observation and experimentation to describe and explain natural phenomena within specific contexts. Its purpose, in an occupational context, is to produce useful models of work that will enable HR practitioners to make informed people decisions in their business. However, a model and research that is right for one company is not instantly transferable to another. Unfortunately, we notice that organisations believe the research, which is scientifically robust for one company, is equally scientifically robust for another. That’s now always the case though.

HR practitioners need to recognise that one cannot assume that studies undertaken, even in related industries, will be equally as applicable to their own context. Validity is a necessary, but not sufficient basis on which they can decide the long-term value of a test for their particular organisation. Companies need to be given the tools, data, and knowledge to conduct their own studies to establish models of performance and potential that are specific to their business. We operate in a bespoke business.

A move away from science

Being a psychologist myself, I’m particularly worried by a move away from scientific based models of personality. The study of personality and human cognition has a long history dedicated to establishing core elements that describe human behaviour. Recently however, multiple tests are being launched that have no connection to psychology and are merely ‘overnight’ models with no independent scientific support.

Psychometric assessments are required to demonstrate a connection to the science of psychology. With respect to personality, there are well accepted and agreed models that form the basis for the science, developed through years of independent peer reviewed research. This is equally true of cognitive ability.

To lose this connection to science is to lose a defining link between occupational psychology and psychometric measurement. The result is the commercialisation of the discipline to the detriment of being able to understand the real complexity of behaviour at work.

Excessive pricing models

Occupational psychology is big business and this is evident in the number of publicly listed companies who offer it. As a result, profits are often paramount and have led to complex pricing models, for example charging for purchase and ongoing usage. Pricing of psychometric assessments can range from between £3 to £750 for what is essentially a very similar outcome. These high priced psychometric tools are often justified on the grounds that price determines the quality of the psychometric assessment you buy. Yet, is there a real reason for these large differences in price? And are HR professionals and line managers getting value for money?

Organisations purchasing psychometric tools need to start questioning the high price of assessments and reports. Price is not necessarily a measure of quality. HR professionals should identify what their business needs and then choose the most cost-effective psychometric solution that is most likely to provide the data to address those needs. Those who do a little shopping around will find they can get the same quality product for a fraction of what they may be paying currently. With the current economic climate there is now a real driver for change. Organisations are more concerned with accountability and receiving value for money. They want to know what they are getting for their costs, and the psychometrics industry should be in a position to speak with integrity about the value that psychometrics accurately provides.

In summary

HR professionals are quite rightly questioning the value of psychometric products, many of which are transactional and stand-alone. Users could receive huge amounts of data from individual test products yet are not encouraged to use the data to address bigger business issues. As an industry, we should be helping HR professionals understand the added value they should be getting from psychometric assessments, for example how organisations can use psychometric data to understand why people have potential and how to develop it within their organisation.

But only by being aware of the trends behind the testing industry can HR professionals challenge the status quo and understand how to use psychometrics in the bigger picture to solve business problems. Psychometric assessments are only one element of an integrated approach that needs to be taken so that HR and business managers are equipped to make informed decisions on assessments and their usage.