Pre-employment testing: A complete guide
What is pre-employment testing?
This section takes an in-depth look at what pre-employment testing is, and why it’s better than relying on resume screening alone.
We’ll look at important issues surrounding pre-employment testing – such as legality, and any relevant US laws and guidelines on employment testing, such as the Uniform Guidelines on Employee Selection Procedures (1978).
Also, adverse impact and discrimination is a thorny problem in recruitment, so we’ll focus on what it is, why it’s important to avoid it, and how you should ensure that any pre-employment tests and assessments are properly validated before using them with candidates.
First up, let’s look at what pre-employment testing actually is, and how it ties in with skills-based hiring.
What is pre-employment testing?
Pre-employment tests are a standardized and objective method of collecting data on candidates during the hiring process. Professionally developed and validated pre-employment tests are a reliable and fast way of evaluating the skills and character traits of potential employees. Some tests can be taken in person at specific test centers, or done through an online testing platform like ours.
This makes the recruitment process more efficient than traditional hiring methods such as CVs/resumes, and it ensures that candidates get a fair chance to prove their job-related and soft skills to prospective employers.
There has been an increase in fraudulent candidates applying for roles in the last few years, especially in the technology sector. This results not only in resources wasted on bad hires, but can also lead to significant risks, such as cyber security breaches and errors created by employees who have lied about their skill levels.
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Candidates in all job roles are often tempted to overstate or stretch the truth about their professional experience and skills, and there is a minority who deliberately misrepresent their credentials.
Whilst this is often not intended maliciously, it does cause problems when they are hired and find themselves out of their depth – “fake it ‘til you make it” just isn’t an option in the world of employment.
However, by using high-quality pre-employment testing, employers can:
- Quickly eliminate unsuitable candidates from the process
- Remove bias from hiring decisions
- Find candidates that are most likely to succeed in that job role
More employers are starting to recognize the benefits of skills-based hiring, so there is a growing demand for pre-employment testing to make this modern recruitment method a viable alternative to the CV.
According to surveys done by the American Management Association (AMA), the use of pre-employment testing has been growing steadily in the past fifteen years.
McKinsey’s 2022 study on how taking a skills-based approach helps both employers and workers found that it’s not just the private sector that is moving towards skills-based hiring and away from resumes and qualifications: in May 2022, the state of Maryland announced that degrees were no longer required for almost half of its positions.
Next, we’ll look at the often-asked question of whether pre-employment testing is legal, and what effect it has on adverse impact in recruiting.
Is pre-employment testing legal?
There is often some misunderstanding about whether or not pre-employment testing is legal, as many are (rightly) worried about discrimination and adverse impact on specific groups of people.
We can say that pre-employment testing is perfectly legal in the US, but employers must adhere to the relevant US regulations, which are the Uniform Guidelines on Employee Selection Procedures (1978).
One of the main risks in pre-employment screening is that using unvalidated tests can cause adverse impact, which we will look at in more detail in the next section.
What is adverse impact in recruitment?
Adverse impact relates to when job applicants in a legally protected class, such as women or racial minorities, are hired at a lower rate than non legally protected classes. The threshold for adverse impact is determined to be 80 percent of the majority hiring rate – also known as the “4/5ths rule”.
For example, if an employer gets five female applicants and then hires four of those five, the selection ratio is 80 percent, and there isn’t a problem. If, however, they choose to hire only three of the five female candidates, the selection ratio falls to 60 percent, and there is considered to be an adverse impact.
Pre-employment testing reduces bias and discrimination, but only if the tests are evidence-based and scientifically supported.
If testing during the candidate screening process results in adverse impact, the employer must provide evidence that the tests they are using are valid.
This is why it’s important to choose your testing platform carefully, and you need to ensure their pre-employment tests are evidence-based and reliable to avoid potential adverse impact.