He was the ideal candidate for the top financial post—a good academic record, a proven track record in the industry and high scores in all the recruitment interviews the consumer goods company had conducted. But he failed to clear the final test.
Just before finalizing the offer, the chief executive officer had decided to get a personality profile done. Psychometric tools provider SHL India, part of UK-based SHL Group Ltd, was hired to map his personality.
The report showed high scores in almost all areas of competence except in adhering to principles and values. Given the fact that the job required the incumbent to deal with corporate governance, this was a serious deficiency. The offer letter never reached the candidate.
Although a last-minute psychometric test saved this company from making a wrong hire, most managers in India are not used to applying scientific methods in the human resource function—the concept of using psychometric tests for recruitment has been around for almost a decade in India, but most managers still prefer the traditional parameters of judging a candidate, such as academic record, experience and technical qualifications.
These basic checks, however, do not always give a complete picture. “Few line managers want to delve into why two management graduates from the same school are not as successful or unsuccessful as each other,” says Prabir Jha, global head, human resources, Dr Reddy’s Laboratories Ltd.
Companies across the world are realizing that skills such as the ability to innovate, collaborate, think independently and lead are critical to the success of both the employee and the employer. “It is these skills that act as the biggest differentiators between two employees with the same cognitive abilities,” says Y.V.L. Pandit, managing director, SHL India. And these non-technical skills cannot be accurately assessed through job interviews alone. “In the West, almost 70% companies use some form of psychometric tests for recruitment but, in India, less than 25% companies use such tools,” says Pandit.
This is beginning to change. As hiring the right talent becomes key to gaining competitive advantage, companies in India have increasingly started using psychometric tools to make more informed and accurate hiring decisions: recruiting candidates with the right job and organizational fit.
Psychometrics deals with the evaluation and interpretation of psychological attributes—experts, say it should be viewed as an enabler, rather than the sole decision-making tool. A test, generally in the form of a questionnaire, assesses a candidate’s cognitive abilities: the ability to comprehend information presented in verbal and numerical formats. Another type of test helps assess the candidate’s personality and behavioural traits such as inter-personal skills, values, temperament and emotional state. The third focuses on motivation, and helps recruiters understand what drives the person at the workplace—is it power, recognition or money? The test scores are then mapped on a graph and analysed keeping in mind the job profile and organizational culture.
There are a range of tests varying in complexity and levels required for different job functions. Some of the commonly used tools include MBTI, 16PF, FIRO-B, Thomas PPA and OPQ.
The psychometric tools market in India, estimated at Rs100 crore, is highly fragmented, and has only a few pure psychometrics players with a national presence such as Thomas Assessments Pvt. Ltd, Lominger International, a Korn/Ferry company, and SHL India. Then there are some local skill-testing companies such as the Bangalore-based Merit Trac and Ediquity, and executive search firms such as Ma Foi Management Consultants Ltd, ABC Consultants Pvt. Ltd and Manpower Services India Ltd, which offer some of these tools through tie-ups or franchisee relationships as a value-added service to their clients.
Although the concept of using psychometric tests for recruitments has been around for almost a decade in India, it has not really taken off in a big way.
Perhaps one reason for a slow take-off has been the fact that it was the psychometricians, not industrial psychologists and recruiters, who were wielding these tools. “Earlier, the reports were not very user-friendly,” says Yogesh Mishra, head, northern region & Pakistan, Thomas Assessments. “Now, the reports are written in a way that managers can easily understand,” he adds.
Thomas Assessments provides its personal profile application in Indian languuages, too. “For instance, at NTPC, it is not mandatory to take assessments in the English language,” adds Mishra. Thomas Assessments has grown 100% year-on-year in the past couple of years.
Companies such as Samsung India Electronics Pvt. Ltd, Dabur India Ltd, Siemens India Ltd, Wipro Ltd, ICICI Bank Ltd, Raymond Ltd, Thermax Ltd and GTL Ltd, among others, use one or more of these tools in their recruitment processes. Dabur India employs psychometric tools in its hiring process on a selective basis. “We follow the Behavioural Event Interviewing using the STAR methodology, where the candidate’s past experience in dealing with specific situations plays a greater role in identifying the right candidate for a particular job,” says V. Krishnan, head, talent management, Dabur India Ltd.
The benefits of these tests are many, say experts. One, they help weed out wrong candidates. Two, the tests help in better identifying a person’s strengths, weaknesses and latent talent. Three, they can help determine whether the candidate is a team player, conformist, creative, outgoing or introvert. HR managers say psychometric tools can significantly raise accuracy levels in assessing a candidate.
“Research has proven that an interview process coupled with a well-suited psychometric tool can significantly influence the reliability of the selection process,” says D.P. Singh, vice-president, strategic HR, IBM Daksh Business Process Services Pvt. Ltd.
Singh doesn’t believe these tools should be used alone, independent of a well-developed interview process. Pandit puts it succinctly: “A psychometric test is like a blood test. It can help lend accuracy to the diagnosis but it can never replace the doctor’s experience and judgment.”
Optimal usage of psychometrics can help in cutting costs on wrong hires. “For instance, someone who scores poorly on questions relating to conformity may not be good for the job of an auditor since the job demands sticking to the rule book,” says Pandit. “A lot of companies face the problem of wrong hires. It helps neither the employer nor the employee,” he adds.
Most companies use psychometric tools only for high-stake senior-level recruitment. Some, such as Samsung India, use it for all levels. “Some believe the cost of a wrong hire at an entry level is not very high. But the fact is that a wrong hire does add to costs,” says Sanjay Bali, vice-president & head, human resources, Samsung India. “We use these tools to shortlist candidates at the entry level while, for senior positions, they are used to understand what competencies the candidate can bring to the table, apart from his domain expertise.”
Most managers in India, however, are yet to leverage the full potential of psychometrics in recruitment, career development and team-building. “Psychometrics is an under-leveraged tool in India. The challenge is to get a broader consensus on its use,” says Jha.
Often, firms, especially ones which are expanding fast, tend to ignore these tools since the exercise is time-consuming. “In a mad rush to increase headcount, companies should not forget that the cost of wrong hires is huge,” says Bali.
Psychometrics can help introduce efficiency in training and development, say HR managers. It can be used to identify future leaders, high potential candidates and succession planning. “Psychometric tests can help in aligning an employee’s talent with an organization’s business goals and can significantly help in the natural utilization of human resources,” adds Jha.