Enhance Skills-Based Hiring Outcomes with Psychometric Assessments

5 minutes

In the modern talent landscape, it has become more important than ever for employers to accu...

In the modern talent landscape, it has become more important than ever for employers to accurately forecast future employees’ performance potential during the recruitment process. Individual differences greatly affect job performance, making the ability to predict candidates’ skills and alignment with workplace culture significant determinants of their probability of success. 

Skills-based hiring is increasing in popularity

Skills-based talent acquisition processes are becoming increasingly popular with human resources (HR) teams and recruiters. A substantial 73% of companies have incorporated skills-based hiring into their recruitment processes, with an additional 27% of companies having adopted some form of skills-based hiring in 2023 alone.1 This shift towards valuing practical skills over formal qualifications marks a pivotal change in recruitment strategies and highlights the tangible benefits that assessments can bring to the hiring landscape. 

Psychometric assessments provide more insights than traditional recruitment methods

Furthermore, psychometric assessments provide more insights than CVs when it comes to candidates’ skills, competencies, weaknesses, and motivations. These insights can help to improve candidate quality and facilitate more reliable, informed hiring choicesThis method’s effectiveness is highly recognisedwith 92% of companies considering competency-based hiring to be more effective than relying solely on curricula vitae (CVs).2 This preference stems from a critical challenge in the recruitment process, as over 50% of employers express uncertainty around the accuracy of CVs.1 These findings underscore the growing importance of assessments in providing a more authentic and comprehensive understanding of a candidate’s true abilities, beyond what is conveyed on CVs alone. 

Psychometric assessments have become a critical component for successful recruitment processes

The usefulness and value of psychometric assessments are further evidenced by their widespread use, with over 80% of Fortune 500 companies utilising these tests to streamline their recruitment processes and many smaller businesses following suit.3  This trend reflects a broader shift towards evidence-based hiring, optimising talent acquisition strategies for organisations of all sizes. 

By integrating assessments into the recruitment process, employers can make more reliable decisions about potential hires, ultimately leading to better hiring outcomes, including better retention and cultural fit. From multinational corporations to smaller enterprises, the implementation of psychometric assessments has become a critical component for successful recruitment processes. 

What are psychometric assessments? 

Psychometric assessments are a scientific method used to measure a candidate’s personality traits and cognitive abilities to determine their suitability for specific roles. The assessments provide deep insights into an individual’s cultural fit and skills that may not be apparent through traditional interviews alone. There are two key types, personality and ability assessments. 

These assessments reduce the risks of bias and subjective judgments, making them a more reliable tool for evaluating candidates. They are particularly useful in high-volume recruitment to efficiently sift through numerous applicants by assessing essential cognitive skills. 

Psychometric tests can additionally play a significant role in employee development, aiding in personal growth and organisational upskilling. 

What are the benefits of psychometric assessments? 

Psychometric testing offers significant benefits to organisations by providing a comprehensive and nuanced view of candidate traits and capabilities. Assessments support the selection of candidates whose skills and values align well with the job requirements and organisational culture, resulting in increased job satisfaction and improved employee engagementThe implementation of assessments adds consistency to hiring and development processes, ensuring that the best possible decisions are made. 

Assessments deliver considerable value to organisations across all sizes and sectors, including public service and semi-state bodies, financial services, medical devices and pharmaceuticals, and other private companies. 

Here is a brief overview of the key benefits of utilising psychometric assessments: 

  1. Improved Cultural Fit 

Organisations seek to identify candidates who are not only qualified for the requirements of their role but also align well with team dynamics and are a cultural fit for the organisation. Personality assessments offer deeper insights into a candidate’s motivations, behavioural traits, and working preferences, providing a comprehensive understanding that extends beyond the traditional CV. This helps in matching a candidate to a role and an organisation more effectively. 

The output from these assessment reports can help during the interview stage to discern how well a potential hire might integrate into the existing team and contribute to the organisation’s culture. This alignment is key, as employees whose natural abilities and workplace preferences line up well with their roles demonstrate higher performance and satisfaction levels. Employees are more likely to excel in roles that match their natural abilities and workplace preferences. 

The adoption of skills-based hiring, which places greater emphasis on a candidate’s cultural fit and abilities, has also provided significant benefits regarding employee loyalty and organisational tenure. Specifically, employees hired based on their skill sets exhibit a 9% longer tenure within their organisations compared to those selected through traditional hiring practices.4 This increase in retention rates highlights the value of aligning job roles with the natural competencies and interests of employees through skills-based recruitment to foster long-term employee commitment and reduce turnover rates. 

Additionally, the adoption of skills-based hiring has led to a significant reduction in recruitment inaccuracies, with employers reporting an 88% decrease in mis-hires since integrating skills-based criteria into their hiring process. This significant decrease highlights the effectiveness of this approach in identifying candidates who are not only proficient but also well-aligned with the organisational environment and values, thereby enhancing overall job satisfaction and reducing turnover rates. 

  1. Time and Cost Savings 

When used effectively, psychometric tests streamline the recruitment process by reducing time spent on unsuitable candidates, thus saving costs in the long run and creating a more efficient recruitment process.  

Although assessments may initially be an additional cost, they represent a long-term investment in the future of the business. They allow recruiters to efficiently narrow down the applicant pool, focusing their efforts on the most promising candidates.  

When assessments are included in the recruitment and selection process, the chances of selecting a candidate who is a good fit increase, as do the chances of improved job performance, which can ultimately boost revenue. High staff turnover can incur significant financial costs. Furthermore, high employee turnover rates can significantly impact the engagement levels of staff and colleagues who remain with the company.  

  1. Diversity and Inclusion in Hiring Processes 

Psychometric assessments are also a powerful tool for advancing organisational diversity and inclusion in the hiring process. By adopting a skills-based hiring approach, which emphasises the evaluation of a candidate’s abilities over their CV credentials alone, companies have seen significant improvements in their diversity hiring efforts. According to recent research,5 84% of companies that have adopted this strategic approach reported positive impacts on their diversity hiring initiatives.  

This method is particularly effective in addressing gender imbalances in roles where women are traditionally underrepresented. A skills-based hiring approach has shown a 24% increase in female representation in candidate pools.4 This finding underscores the potential for psychometric assessments to not only better align candidates with roles that are well-suited to their skills and abilities, but also to contribute significantly to the creation of more diverse and inclusive workplaces. By focusing on individuals' talents and competencies, organisations can move beyond surface-level criteria provided by traditional recruitment methods, fostering a culture that truly values and embraces diversity. 

  1. Accurate Performance Evaluation 

Psychometric assessments significantly improve performance evaluation over traditional approaches by applying an objective and scientific methodology. Unlike conventional evaluation methods, these assessments reduce personal bias and subjectivity, improve consistency, and offer data-driven insights into an individual's abilities, work style, and growth potential. 

This creates a level assessment environment for all employees, also promoting diversity and inclusion. These assessments help to equip team leaders with the necessary information to make informed decisions regarding promotions, development programmes, and team compositions. 

Especially when considering promotions, personality tests can provide a nuanced view of an individual’s leadership capabilities, interpersonal skills, and adaptability; factors that are essential yet challenging to measure through observation alone. 

  1. Targeted Learning and Development 

Psychometric assessments provide valuable insights into an individual's potential for growth and development and are a great addition to leadership and development plans, enabling the achievement of better results. Assessing factors such as motivation and emotional intelligence allows for the creation of better-tailored development plans for individuals, increasing the likelihood of having employees ready to take on future leadership positions.  

Therefore, these assessments help identify leadership traits and qualities and are instrumental in creating high-performing teams. They increase manager and leader effectiveness and provide insights into strengths and development areas, leading to overall improved business performance. 

Could psychometric assessments be the right solution for your organisation? 

In conclusion, and as evidenced by psychologists John E. Hunter and Frank L. Schmidt,6 individuals who perform well in psychometric evaluations before an employment offer is extended tend to align more closely with the company's values and culture. Additionally, they are often quicker to adapt to their specific roles, leading to enhanced job performance. 

This demonstrates why an increasing number of organisations are integrating assessments into their recruitment processes. These assessments play a critical role by providing objective measures of a candidate’s cognitive abilities and personality traits. This supports employers in identifying candidates with the right mix of personality and abilities for the role at hand and who will show high performance potential with the organisation over time. 

 Want to learn more about how psychometric assessments can enhance your talent attraction and retention outcomes? Schedule a consultation with our Talent Transitions team. 


1. The State of Skills-Based Hiring 2023 - TestGorilla's Annual Report 

2. Gen Z might avoid the résumé as most firms do skills-based recruitment | Fortune 

3. 5 Facts Employers Need to Know About Psychometric Testing (zippia.com) 

4. Skills-First: Reimagining the Labor Market and Breaking Down Barriers (linkedin.com) 

5. Is The Resume Dead? New Report Shows Skills-Based Hiring On The Rise (forbes.com) 

6. Hunter, John & Schmidt, Frank. (1983). Quantifying the effects of psychological interventions on employee job performance and work-force productivity. American Psychologist. 38. 473-478. 10.1037/0003-066X.38.4.473.