Pre-employment testing: A complete guide

ROI in pre-employment testing

This section focuses on that all-important return on investment in pre-employment testing.

We’ll look at just how much a hire for a single role can cost your business – and that may well come as a big shock.

We’ve set out the average cost of hiring, as well as how you can also lose a huge amount of money you invested in an employee if they choose to leave within a few months or get fired.

Return on investment in pre-employment testing

The average cost of a bad hire is probably a lot more than you think. For example, if you’re hiring for a job that pays $60,000, you may spend $180,000 or more to fill that role. That’s some serious investment, and all you can do is watch it walk out the door when the bad hire leaves or is fired.

Calculating the average cost of a bad hire can be tricky, but here are some guidelines to follow:

Multiply the hours that all hiring team members have spent reviewing resumes, conducting interviews, and doing work connected to the job position, by their hourly pay.

Add the cost of advertising for the position.

Add the cost-per-hire of the different software tools you’re using.

Add the sum to the cost of lost productivity. This might be a bit more difficult to assess, but if you look at your KPIs, you should be able to estimate.

Add the monthly compensation package of the bad hire, multiplied by the number of months they’ve spent at the company.

Add onboarding and training costs.

You should bear in mind that this only covers the basic cost of a bad hire and there may be extra expenses to take into account.

Pre-employment testing reduces the risk of bad hires far more than resumes ever will, giving you a better return on your investment in hiring.

As we mentioned before, pre-employment tests can minimize the risk of hiring someone who:

  • Doesn’t align well with your company goals and culture

  • Hasn’t got the right level of skills for the role even if their resume looks good

Although we’ve already mentioned a few of our case studies, why not take a look at some of our other case studies into how different businesses saved time and money by using pre-employment screening?

A lot changed in the HR technology landscape in 2022, and more change is coming in 2023. It’s important to be aware of what’s coming next in the world of HR tech so that you’re ready to lead your organization into the future.

Next steps

We hope this guide to pre-employment testing has answered your questions. We believe strongly in skills-based hiring, and think that it is the future of recruitment.

Whichever skills-testing software you are thinking of using, we urge you to do your research before signing up and parting with your money. We at TestGorilla love a no-risk deal, so we offer a free-forever (there’s no time limit) plan so you can try out many of our popular tests and assessments to evaluate candidates for free.

If you enjoyed reading this guide, take a look at our other blog posts and free downloadable resources.

If you would like to learn more about how TestGorilla works, sign up for a free live 30-minute demo with a member of our sales team, who will be happy to answer any questions you may have about our pre-employment tests and assessments.

Guide to pre-employment testing
What is?
Types of tests
Benefits for employers
Benefits for candidates
Best practices