GLOBAL ASSESSMENT TRENDS REPORT

Sarah S. Fallaw, Ph.D. • Andrew L. Solomonson, Ph.D.

Table of Contents

1. Executive Summary......................................................................................................................................................................... 3
2. Introduction....................................................................................................................................................................................... 4
- The Case for Talent Measurement .............................................................................................................................................. 5
3. About the Report: Methodology and Participating Companies .................................................................................................. 6
4. The Climate for Talent Management in 2010 . ............................................................................................................................... 8
- Change in Priorities...................................................................................................................................................................... 8
- New Fears About the Talent Landscape..................................................................................................................................... 10
5. Testing the External Talent Landscape.........................................................................................................................................11
- Remote Testing.......................................................................................................................................................................... 12
- Business Outcomes: Connecting Assessments to Criteria that Matter...................................................................................... 13
- The Hiring Process: What Talent Measurement Tools Do Organizations Really Use?.............................................................. 16
- Social Media: An Evolving Trend for Hiring and Recruiting ....................................................................................................... 18
- Are We Treating Our Candidates As Customers?...................................................................................................................... 20
6. Measuring the Internal Talent Landscape ................................................................................................................................... 22
- Employee Initiatives and Talent Measurement........................................................................................................................... 23
7. Looking Ahead: Talent Measurement in 2010 and Beyond ....................................................................................................... 24
8. Additional Information................................................................................................................................................................... 26
- About PreVisor........................................................................................................................................................................... 26
- About ADP.................................................................................................................................................................................. 26
9. References ..................................................................................................................................................................................... 27
Appendix A: Executive Summary of 2009 Global Assessment Trends Survey............................................................................ 28

Tables
Table 1: Company Headquarters by Geographic Location..................................................................................................................... 6
Table 2: Companies Represented by Company Size............................................................................................................................. 6
Table 3: Companies Represented by Industry....................................................................................................................................... 7
Table 4: Participant’s Role in Company.................................................................................................................................................. 7
Table 5: Top Priorities for 2009 and 2010 and Change in Priority.......................................................................................................... 9
Table 6: Trends in Human Resources – Comparisons between 2009 and 2010................................................................................... 9
Table 7: Trends in Human Resources – Recruiting and Retention....................................................................................................... 10
Table 8: Reasons for Pre-Hire Remote Testing.................................................................................................................................... 13
Table 9: Trends in Human Resources – Collecting Metrics and Valuing Assessments........................................................................ 14
Table 10: Business Outcomes Targeted by Using Pre-Hire Tests/Assessments.................................................................................. 15
Table 11: General Hiring Tool Usage and Plans for Use...................................................................................................................... 17
Table 12: Pre-Hire Assessment Usage and Plans for Use................................................................................................................... 17
Table 13: Use and Effectiveness of Social Media for Recruiting and Hiring......................................................................................... 20
Table 14: Trends in Human Resources – Attitudes and Actions Toward Candidates........................................................................... 21
Table 15: Trends in Human Resources – Current Workforce Strategies.............................................................................................. 22
Table 16: Use of Assessments with Current Workforce by Workforce Initiative................................................................................... 23

Figures
Figure 1: Tests/Assessments in the Hiring Process..............................................................................................................................11
Figure 2: Online Tests/Assessments in the Hiring Process...................................................................................................................11
Figure 3: Remote Testing in the Hiring Process................................................................................................................................... 12
Figure 4: Internal Requirements for Measuring Business Impact of Pre-Hire Tests/Assessments...................................................... 14
Figure 5: Informal Social Media Searches As a Hiring Tool.................................................................................................................. 19
Figure 6: Formal Social Media Searches As a Hiring Tool................................................................................................................... 19

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1. Executive Summary
Over 230 companies from around the world responded to PreVisor and ADP’s Global Assessment Trends Survey in late
2009 to provide their perspectives on current and anticipated talent measurement practices and trends. Key findings from
the report are listed below.
 EY FINDING 1: Top Talent Priorities for 2010 – The
K KEY FINDING 5: Social Media As a Hiring Tool:
Emergence of Performance Management and Career
Development
- Managing the performance of the current workforce is the
highest priority for HR in 2010 with career development
and external recruiting/hiring following as the next highest
priorities. External recruiting/hiring, which was projected as
a top priority prior to the economic downturn, had the largest
decrease in priority from 2009-2010 of any HR initiative
included in the survey.
KEY FINDING 2: Talent Impact of Economic Recovery
– Retention, Recruitment, Retirement
- Most companies (68%) indicated concern about retaining
employees during the economic recovery. Likewise, 54%
believe it will be challenging to recruit talented employees
in 2010. However, less than 19% of companies reported
being concerned about the talent gap to be left by retiring
employees and leaders.
KEY FINDING 3: Focus on Quality of Hire
– Whether It Is Measured or Not
- Most companies (70%) are feeling pressure to demonstrate
return on investment for assessment products. Quality of
Hire is the most common business outcome that companies
(84%) are trying to improve with pre-hire assessments.
However, only 56% of companies reported that they collect
metrics to show the value of HR investments, and only 42%
are required by internal stakeholders to demonstrate a link
between assessments and business outcomes.
KEY FINDING 4: “Wait and See” Perspective on Plans
to Use New Tools, Processes
- Compared to the previous year’s survey, the proportion of
respondents who plan to use processes (which they are not
currently using) within the next year has decreased, indicating
a more cautious approach toward purchasing and using new
tools, technologies, and processes. A few exceptions to this
finding include the use of informal social media searches,
formal social media searches, and situational judgment
tests as hiring tools.
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The Jury Is Still Out
- Nearly 70% of organizations use or plan to use informal
Web 2.0 searches as a hiring tool. However, only 20% of
the organizations surveyed indicated that social media sites
are effective tools for determining candidate fit, while nearly
50% are uncertain. Accordingly, only 24% of companies are
currently in agreement that social media websites such as
Twitter and Facebook are having a large impact on how
talent is recruited, measured, and managed.
KEY FINDING 6: Treating Candidates As Customers
Is Emphasized but Not Evaluated
- Most organizations (84%) agreed that applicant reactions
to the recruitment and hiring process are important. For
example, convenience to applicants was the most frequently
cited reason (86%) that companies use remote testing.
However, only 41% of companies obtain feedback from
their candidates, who are likely to be their customers and/or
future employees.
KEY FINDING 7: Opportunity Exists to Formalize Talent
Programs
- While career development is a top priority and more than
60% of companies use it as a retention strategy, only 29%
have established a formal career development process for
their employees.
- Only 28% of companies have a structured promotion process
for leaders. This is a consistent finding from the previous
year’s survey.
- Only 50% of organizations indicated they use assessments/
talent measurement tools with their current workforce.
Of those who do, most use or plan to use such tools for
career development, training needs analysis, and promotion
programs within their companies.
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2. Introduction

With increasing pressure and continuous change occurring in organizations due to economic conditions, globalization, and
other forces, it can be said that the human talent within organizations is critical to the survival and success of any business.
Talent measurement, the assessment of current or potential employees’ skills, abilities, knowledge, and competencies,
provides companies with data to make better talent decisions and ultimately help drive sustained business success. The
Global Assessment Trends Report is designed to uncover some of the key trends in the area of talent measurement and
offers insights on how companies may enhance their own talent measurement practices.

This second annual Global Assessment Trends Report presents the results of an online survey conducted in late 2009
with representatives of over 230 companies headquartered throughout the world. The report aims to provide HR and
business audiences with an up-to-date perspective on practices and trends related to use of individual assessment (i.e.
talent measurement) tools in HR and talent management programs such as hiring, career development, and succession
planning. The findings presented in this report are intended to be instructive for those seeking to stay current on relevant
trends in this area and for benchmarking and informing decisions about one’s own company’s assessment practices.

As with the previous year’s Global Assessment Trends Report, highlights of the 2010 report include review of key HR
trends related to assessment, commentary on the context and use of assessments in HR programs, and an overview of
how organizations around the world are measuring their internal and prospective talent through the use of assessment
tools. Also, relevant comparisons are drawn to results of the previous years’ Global Assessment Trends Survey1, some of
which are particularly interesting because the 2009 survey was completed just prior to the economic downturn that began
in late 2008.

1. Key Findings of the 2009 Global Assessment Trends Survey are located in Appendix A.

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1. Introduction (cont.)

The Case for Talent Measurement

A growing movement in business today known as “Evidence Based Management” suggests the quality of organizational
decisions and practices can be enhanced through deliberate use of relevant scientific evidence and data2. These principles
extend naturally to the measurement and management of talent in organizations. Better decisions about talent can be made
when relevant data about individuals’ competencies, skills, and other characteristics are considered – especially when the
talent measurement tools have been developed and tested based on industry-accepted, scientifically-based principles
and practices. Furthermore, business analytics that leverage talent measurement data allow a more direct view of how an
organization’s talent decisions impact business objectives and strategy, which will further underscore the importance of
making effective talent decisions.

We define talent measurement as the assessment of individual competencies, performance, and other relevant characteristics
to provide quantifiable data to assist in decision making. Companies regularly make decisions about their talent, such
as which candidates to hire, which employees to develop and promote into leadership roles, how best to target training
and career development efforts, and who to place in other roles in the organization. These decisions can be aided by
employing effective talent measurement. Organizations use talent measurement data to make decisions about potential
and internal talent and/or to assist employees in making decisions related to their professional and career development.
Objective and structured talent measurement programs add value to these decisions by providing information that can lead
to improvements in individual performance and ultimately the bottom line of an organization.

Including talent measurement as an integral component of HR programs such as hiring and career development can build
the business case for these programs by linking assessment data to critical business outcomes like quality of hire, sales
revenue, employee retention, and increased productivity. By demonstrating how talent measurement impacts business
outcomes, practitioners are well positioned to show the value of programs to others within their organizations and to make
targeted improvements to those programs. See PreVisor’s 2009 Business Outcomes Study Report for examples of Fortune
500 companies who have linked talent measurement to critical business outcomes3.

2. Rousseau, 2006. 3. PreVisor, 2009.

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3. About the Report: Methodology and Participating Companies

Human Resources professionals from 234 companies who work with PreVisor, ADP, and/or their affiliates were surveyed
late October, early November 2009. Approximately 58% of the companies surveyed are headquartered in the United States,
while the remaining companies are headquartered in Australia, Canada, the United Kingdom, and other international
locations (see Table 1). Organizations in the survey represented a diverse array of company sizes and industries (see
Tables 2 and 3). Most survey respondents report into a Human Resources function within their organizations and represent
a variety of roles including HR generalists, recruiters, and leaders/directors (see Table 4).

Table 1: Company Headquarters by Geographic Location

Geographic Location Number of Companies Percentage of Sample

Americas 152 65%

Australasia 39 17%
Europe/Africa/Middle East 42 18%

Table 2: Companies Represented by Company Size

Number of Employees Number of Companies Percentage of Sample

0 to 49 52 22%

50 to 99 19 8%

100 to 499 41 18%

500 to 999 21 9%

1,000 to 4,999 35 15%

5,000 to 9,999 21 9%

10,000 to 12,000 11 5%

Over 12,000 34 15%

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3. About the Report: Methodology and Participating Companies (cont.)

Table 3: Companies Represented by Industry

Industry Number of Companies Percentage of Sample

Administrative and Support Services 1 <1%

Advertising/Marketing 2 1%
Construction 4 2%

Educational Services 11 5%
Financial 14 6%
Healthcare 15 6%
Hospitality 7 3%
Information 22 9%
Insurance 12 5%
Manufacturing 23 10%
Professional Services 28 12%
Public Administration 5 2%
Retail 8 3%
Staffing 22 9%
Telecommunications 6 3%
Transportation and Warehousing 4 2%
Utilities 4 2%
Other 46 20%

Table 4: Participant’s Role in Company

Participant Role Number of Participants Percentage of Sample

Human Resources Leadership

50 22%
(e.g., Director, Vice President)
Other Corporate Leadership 43 19%

HR or Staffing Manager 35 15%

Recruiter 22 10%

Hiring Manager/Line Manager 21 9%

Human Resources Generalist 16 7%

Internal Consultant 11 5%

Trainer 10 4%

External Consultant 9 4%

Other 14 6%

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4. The Climate for Talent Measurement in 2010

Talent measurement is conducted within a broader HR context and strategy. To fully understand global assessment trends,
we must also understand the relevant environmental and strategic influences on talent measurement. To that end, we begin
by examining several HR priorities and general trends that are emerging and directly relevant to talent measurement.

Companies were asked to indicate whether each of several HR areas were top, medium, or low priorities for their organizations
in 2010. Understanding the relative importance of various initiatives provides context for how assessments are used within
talent measurement programs and what will be increasing or decreasing in emphasis in the future. As in 2009, performance
management continues to be a high priority in 2010, with 60% of companies endorsing performance management as a top
priority for their organization (see Table 5). Other top priorities include career development and external recruiting/hiring.

KEY FINDING 1

Top Talent Priorities for 2010 – The Emergence of Performance Management

and Career Development
 anaging the performance of the current workforce is the highest priority for HR in 2010 with
M
career development and external recruiting/hiring following as the next highest priorities. External
recruiting/hiring, which was projected as a top priority prior to the economic downturn, had the
largest decrease in priority from 2009-2010 of any HR initiative included in the survey.

Change in Priorities

Compared to 2009, the results demonstrated that external recruiting/hiring had the largest decrease in 2010 – consistent
with the changes in the economy between survey administrations. Also, internal promotion/placement had the second
highest decrease in priority from 2009 to 2010. This is another sign that many jobs may be “stagnant” (or eliminated) in
today’s economy, along with potential influences such as lack of business growth and voluntary turnover which often create
opportunities for internal promotion and movement within companies.

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4. The Climate for Talent Measurement in 2010 (cont.)

Table 5: Top Priorities for 2009 and 2010 and Change in Priority

2009 Rank 2010 Rank

2010 Top
HR Focus Area 2009 Top Priority (Based on Top (Based on Top Change
Priority
Priority) Priority)
Performance Management 56% 2 59% 1 3

Career Development 45% 4 35% 2 -10

External Recruiting/Hiring 62% 1 35% 2 -27

Training Needs Analysis/Skills Gap

35% 6 32% 4 -3
Analysis
Workforce Planning 31% 7 30% 5 -1

Succession Planning 42% 5 29% 6 -13

Internal Promotion/Placement 50% 3 29% 6 -21

Competency Modeling 21% 9 26% 8 5

Bench Strength Analysis 24% 8 15% 9 -9

Training Certification 21% 9 14% 10 -7

Outplacement/Redeployment 9% 11 10% 11 1

HR practitioners and leaders are feeling the impact of the economy on their own practices. Companies around the world
indicated they perceive the economy having a bigger impact on recruiting, hiring, and developing employees in 2010 as
compared to 2009 (see Table 6). The changes in priority indicated above (i.e., focusing on performance management and
career development in 2010 versus 2009) are also reflected in the strategy for focusing more on developing internal talent
than hiring externally, having a large change in emphasis from 2009 (37%) to 2010 (52%).

Likewise, companies indicated their competency models are being used less effectively in 2010 versus 2009. The economic
conditions were felt throughout many companies, and the emphasis on competency models and consistent practices
across the company may have often taken a back seat to financially-induced HR activities such as reductions in force or
compensation adjustments.

Table 6: Trends in Human Resources – Comparisons Between 2009 and 2010

Survey Statement Percent Agree/ Strongly Agree Change

2009 2010

The economy is having a big impact on how we recruit, hire, and

59% 76% 17
develop employees this year.
In general, my company is focusing more on developing talent
37% 52% 15
internally than on hiring externally.
Our company’s competency model is being used effectively as part
of our overall employee lifecycle (from hiring to development to 44% 37% -7
promotion).

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4. The Climate for Talent Measurement in 2010 (cont.)

New Fears About the Talent Landscape

Consistent with economic data, less than 25% of companies indicate they are recruiting for more open positions across
their entire organization as compared to last year. Similarly, 65% of companies indicated they have more applicants for each
open position compared to last year prior to the economic downturn.

Nearly 70% of companies indicated that retaining employees will become a challenge as the economy improves, and over
half report it will become increasingly challenging to recruit and hire talented individuals in the upcoming year (see Table 7).
Conversely, only 19% of organizations believe that retirement of managers and executives will contribute to the talent gap
in leadership roles in the organization, and 17% believe hiring needs will increase due to retirement of current employees
next year.

KEY FINDING 2

Talent Impact of Economic Recovery – Retention, Recruitment, Retirement

Most companies (68%) indicated concern about retaining employees during the economic recovery.
Likewise, 54% believe it will be challenging to recruit talented employees in 2010. However,
less than 19% of companies reported being concerned about the talent gap to be left by retiring
employees and leaders.

Table 7: Trends in Human Resources – Recruiting and Retention

Percent Agree/
Survey Statement
Strongly Agree
We are currently recruiting for more open positions company-wide as compared to last year. 23%

Compared to last year, we have an increased number of applicants per open position. 65%

We anticipate that retaining employees will become a greater challenge as the economy improves. 68%
We expect it will become increasingly challenging to recruit and hire talented individuals for key positions in
54%
the coming year.
Our hiring needs will increase in the coming year due to retirement of current employees. 17%
Retirement of managers/executives in the next year will contribute to a “talent gap” in leadership roles at
19%
our company.

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5. Testing the External Talent Landscape

Tests and assessments, in some form or fashion, have been used by companies to make employment decisions for
thousands of years. As psychological and employment testing has evolved into its own scientific field within the past
century, the relative effectiveness of such hiring tools has been well-documented: depending on the type of test used, the
use of structured hiring tools, including tests, structured interviews, and the like, can help predict key outcomes such as
performance, turnover, and other metrics of importance to organizations4.

The overwhelming majority (86%) of survey participants use testing as part of the hiring process for jobs within their
organizations (see Figure 1). Of those companies who use tests to hire externally, 83%* of them use online versus paper
and pencil tests (see Figure 2).

Figure 1:  Figure 2: 
Tests/Assessments in the Hiring Process Online Tests/Assessments in the Hiring Process5

3%
13%
1% 15%

86% 83%*

Yes Yes
Unsure Unsure
No No

4. Schmidt & Hunter, 1998.

5. This question includes those who responded “Yes” to the following question: Does your company use tests/assessments as part of the hiring process for any jobs?
* The percentages do not add to 100% due to rounding.

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5. Testing the External Talent Landscape (cont.)

Remote Testing

In addition to other advantages, online testing affords organizations the ability to test candidates from anywhere in the world.
Advances in test security, including the use of computer adaptive testing, randomized item presentation, and other features
help ensure that tests can be used in such a manner without being compromised. We define remote testing as a test
administration event where the candidate is taking a test without direct supervision from a test administrator or proctor.

In 2009, we asked organizations to respond to the question: We allow candidates for some or all jobs to test remotely
(for example, from their home). The majority of companies (60%) indicated they agreed or strongly agreed that they used
remote testing in 2009 for some or all jobs. In 2010, we asked companies to indicate their response with Yes, Unsure, or No,
and 73% indicated they allow external candidates to test remotely (see Figure 3).

Figure 3: Remote Testing in the Hiring Process

25%

2%
73%

Yes
Unsure
No

Of the companies that conduct remote testing (n = 122), most indicated convenience to both candidates and test administrators
as a primary reason they use remote testing (see Table 8), while other factors such as cost, on-site resources, and applicant
pool size/diversity were relatively less frequently cited as reasons for offering remote testing. More than a third of companies
indicated they use remote testing as a prescreening measure, before inviting qualified candidates to take an additional test
on-site (in a supervised testing event).

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5. Testing the External Talent Landscape (cont.)

Table 8: Reasons for Pre-Hire Remote Testing

For what reasons do you allow your candidates to test remotely? Percent Endorsing Rank

Remote testing is more convenient for our candidates. 86% 1

Remote testing is more convenient to administer for hiring managers,
73% 2
recruiters, etc.
To prescreen candidates prior to inviting them in for an on-site testing
51% 3
session.
Remote testing increases the size of the candidate pool. 36% 4
The cost or resources required for on-site or supervised testing is prohibitive. 35% 5
We lack appropriate on-site testing facilities (e.g., not enough computers or a
33% 6
dedicated testing location).
Remote testing increases the demographic composition of the candidate
29% 7
pool.

Business Outcomes – Connecting Assessments to Results that Matter

The current economic environment puts all business expenditures under the microscope. Approximately 70% of companies
feel pressure to show demonstrable business impact of the assessments they use (see Table 9). However, despite this
pressure, relatively fewer companies surveyed say they collect metrics to show the value of their HR investments in general
(56%) or their pre-hire tests (57%). Likewise, 44% of companies collect metrics to examine how interviews add value to the
hiring process.

The reluctance to collect metrics could be due to the nature of what is required by a particular organization. While there
is general pressure to show business impact of assessments, only 42% of companies are required to collect such data to
justify their testing program(s) to internal stakeholders, and 30% of companies indicated simply having the hiring managers
believe the process is working is enough to justify the program (see Figure 4). Even so, collecting metrics to examine overall
effectiveness and to examine the value of testing to the pre-hire process are both up from the 2009 report, suggesting an
overall increase in the examination of the impact of HR initiatives.

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5. Testing the External Talent Landscape (cont.)

Table 9: Trends in Human Resources – Collecting Metrics and Valuing Assessments

Percent Agree/
Survey Statement Change
Strongly Agree
2009 2010

Our department feels pressure to show return on investment for any assessment
- 70% -
products we use.
We collect metrics to show the value of our HR investments. 49% 56% 7

Testing candidates is a valuable part of the hiring process. 94% 93% -1

We collect metrics to determine how tests add value to the hiring process . 6
51% 57% 6

We collect metrics to determine how interviews add value to the hiring process. - 44% -

What type of information do your business stakeholders require to continue supporting testing?

Figure 4: 
Internal Requirements for Measuring Business
Impact of Pre-Hire Tests/Assessments

30%

18%
42%

11%

Stakeholders require data.

If HR Managers believe in it, then it
is supported.
Nothing - they assume it's working.
Unsure.

6. In 2009, this statement said “how our assessments” instead of “how tests.”

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5. Testing the External Talent Landscape (cont.)

KEY FINDING 3

Focus on Quality of Hire – Whether It Is Measured or Not

Most companies (70%) are feeling pressure to demonstrate return on investment for assessment
products. Quality of Hire is the most common business outcome that companies (84%) are trying
to improve with pre-hire assessments. However, only 56% of companies reported that they collect
metrics to show the value of HR investments, and only 42% are required by internal stakeholders
to demonstrate a link between assessments and business outcomes.

Why do organizations use tests during the hiring process? What business outcomes are they trying to achieve? Out of the
companies who responded to this section, most companies (84%) indicated they are focused on impacting Quality of Hire
with pre-hire assessments, trying to improve the quality of the employees that are hired using their process (see Table 10).
Over 50% of companies also indicated trying to impact retention or turnover of employees using pre-hire assessments
during the hiring process. Productivity (47%) and Process Efficiency (44%) rounded out the top four metrics when using
tests/assessments. Only 10% of companies indicated they do not target any metrics with their tests/assessments.

Table 10: Business Outcomes Targeted by Using Pre-Hire Tests/Assessments

Which of the following business outcomes or metrics does your

Percent Endorsing Rank
company seek to impact when using pre-hire tests?
Quality of Hire 84% 1

Retention (or Turnover) 52% 2

Productivity 47% 3

Process Efficiency (e.g., cost per hire, time to hire) 44% 4

Performance Ratings 38% 5

Training Effectiveness/Cost 24% 6

Legal Compliance 19% 7

Financial Metrics (e.g., sales revenue, shrink/loss) 16% 8

We do not target any specific metrics or business outcomes
9% 9
with our pre-hire tests.

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5. Testing the External Talent Landscape (cont.)

The Hiring Process: What Talent Measurement Tools Do Organizations Really Use?

What does the hiring process typically look like around the world? In addition to tests and interviews, there are many other
hiring tools used during the overall decision making process. Most organizations continue to use traditional hiring tools
in their hiring processes, including résumé screens, reference checks, prescreening questions, and background checks.

More than 70% of companies indicated they use or plan to use tests that measure some knowledge, skill or ability,
including skills/knowledge tests, cognitive ability/general problem solving tests, and specific ability tests. Personality and
situational judgment tests round out the top five types of assessments used by companies during the hiring process.

Any tool used to make a hiring decision about a candidate should be carefully considered. Does the tool add value
to your process? Is the tool related directly to the job in question? Does it appear to be relevant to the job? Does it
meet professional and legal guidelines? Each of the tools listed in Tables 11 and 12 vary in terms of how they meet
each of the issues raised above, and should be evaluated carefully before implementation and on an ongoing basis.

FREQUENTLY USED HIRING TOOLS – TOP 5 LISTS

General Hiring Tools Assessments
• Résumé review/screen • Skills/knowledge tests
• Reference checks • Cognitive ability/general
• Prescreening questions problem solving tests
• Background check7 • Specific ability tests
• Application forms • Personality tests
• Situational judgment tests

KEY FINDING 4

“Wait and See” Perspective on Plans to Use New Tools, Processes

Compared to the previous year’s survey, the proportion of respondents who plan to use processes
(which they are not currently using) within the next year has decreased, indicating a more cautious
approach toward purchasing and using new tools, technologies, and processes. A few exceptions
to this finding include the use of informal social media searches, formal social media searches, and
situational judgment tests as hiring tools.

7. For more information about the use of automated processes for background checks, credit checks and the like, please see ADP’s 2009 Hiring Index Whitepaper (Automatic Data Processing, 2009a).

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5. Testing the External Talent Landscape (cont.)

Table 11: General Hiring Tool Usage and Plans for Use
2009 2010

Currently Planning Currently Planning

Hiring Tool Total Rank Total Rank
Using to Use Using to Use
Résumé review/screen 91% 4% 95% 2 92% 4% 96% 1

Reference checks - - - - 89% 4% 93% 2

Prescreening questions (minimum

82% 11% 93% 3 78% 14% 92% 3
qualifications questions)

Background checks8 94% 4% 98% 1 86% 6% 92% 4

Application forms - - - - 84% 5% 89% 5

Phone screens (person to person
84% 4% 88% 4 79% 7% 86% 6
or IVR)
Structured interview guides 72% 13% 85% 5 72% 12% 84% 7

Social media searches – Informal - - - - 44% 25% 69% 8

Work samples/Assessment centers 38% 21% 59% 6 47% 20% 67% 9

Drug screens - - - - 54% 8% 62% 10

Unstructured interviews 37% 7% 44% 7 55% 6% 61% 11

Social media searches – Formal - - - - 30% 24% 54% 12

Credit checks - - - - 41% 12% 53% 13

Table 12: Pre-Hire Assessment Usage and Plans for Use

2009 2010

Currently Planning Currently Planning

Assessment Types Total Rank Total Rank
Using to Use Using to Use
Skills/knowledge tests 76% 9% 85% 2 69% 15% 84% 1
Cognitive ability/general problem
62% 23% 85% 1 56% 18% 74% 2
solving tests
Specific ability tests 69% 15% 84% 3 56% 17% 73% 3

Personality tests 53% 14% 66% 8 50% 18% 68% 4

Situational judgment 49% 19% 68% 7 43% 24% 67% 5

Job fit tests 56% 20% 76% 5 43% 19% 62% 6

Job-specific solutions 63% 19% 82% 4 41% 21% 62% 7

Job simulations 39% 31% 70% 6 36% 20% 56% 8

Culture fit tests 30% 29% 59% 9 32% 20% 52% 9

Interest assessments 28% 22% 50% 10 25% 17% 42% 10

Biodata (life history information) 33% 10% 43% 11 30% 6% 36% 11

8. Note: In 2009, this was combined to read “Background checks, drug screens.”

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5. Testing the External Talent Landscape (cont.)

Social Media: An Evolving Tool for Recruiting and Hiring

KEY FINDING 5

Social Media As a Hiring Tool: The Jury Is Still Out

Nearly 70% of organizations use or plan to use informal Web 2.0 searches as a hiring tool. However,
only 20% of the organizations surveyed indicated that social media sites are effective tools for
determining candidate fit, while nearly 50% are uncertain. Accordingly, only 24% of companies are
currently in agreement that social media websites such as Twitter and Facebook are having a large
impact on how talent is recruited, measured, and managed.

When companies take information they find about candidates during searches and use it to influence hiring decisions, the
social media search becomes a hiring tool, and as such, is subject to the legal, ethical, and scientific scrutiny of any hiring
tool like an interview or test. We examined social media as a recruiting and hiring tool in the 2010 Global Assessment
Trends Survey. The popularity of social media sites as information gathering tools is not without controversy, and we
felt it was important to understand how organizations use social media searches as part of their hiring processes. In
other words, do companies use information provided by candidates on social media sites such as Facebook, MySpace,
Twitter, LinkedIn, and others to make employment decisions? Likewise, what is the perceived effectiveness of such tools?

We asked companies to indicate whether they were using or plan to use both informal searches and formal searches that
include rating scales and specific criteria to consider. We felt this distinction is important given the legal environment for
selection decisions contrasted with the increasing popularity of such sites from both an employer and applicant perspective.
The results demonstrate that nearly 70% of companies either currently use or plan to use informal social media searches
as part of their hiring process (see Figure 5). Over 54% of companies use or plan to use formal social media searches
as part of their hiring process (see Figure 6). In fact, out of all of the hiring tools and assessments included in the survey,
informal social media searches was the top “plan to use” hiring tool for 2010 (see Tables 11 and 12 in the previous section).

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5. Testing the External Talent Landscape (cont.)

Figure 5:  Figure 6: 
Informal Social Media Searches As a Hiring Tool Formal Social Media Searches As a Hiring Tool

30%
32%
44%*
47%*

24%
25%

Currently use Currently use

Plan to use Plan to use
Do not use/No plans to use Do not use/No plans to use

Many companies (40%) use social media to recruit candidates, posting job openings on their Facebook pages or advertising
them via LinkedIn or Twitter, and believe they are effective at reaching quality candidates (41%; see Table 13). Despite this
emphasis on social media as a hiring tool, companies appear undecided about the effectiveness of such tools. While less than
20% of companies were in agreement that social media is an effective tool for determining candidate fit with an organization,
perhaps the most telling findings were the large proportion of neutral responses related to effectiveness of using social media
for hiring. Specifically, 42% of companies reported they neither agreed nor disagreed that social media sites are effective
tools for recruiting and reaching quality candidates. Likewise, nearly 50% of companies indicated a “neutral” response to
the statement: “Social media sites are effectiveness tools for determining candidate fit with an organization.” These findings
illustrate the uncertainty that exists around this particular technology as a useful source for candidate data in the hiring process.

* The percentages do not add to 100% due to rounding.

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5. Testing the External Talent Landscape (cont.)

Table 13: Use and Effectiveness of Social Media for Recruiting and Hiring

Percent Agree/
Survey Statement Percent Neutral
Strongly Agree
Social media websites (e.g., Facebook, Twitter) are having a large impact on how
33% 24%
we recruit, manage, and measure talent.
We use social media (e.g., Facebook, Twitter, LinkedIn) to advertise job openings. 19% 40%

Social media sites are effective tools for recruiting and reaching quality candidates. 42% 41%
Social media sites are effective tools for determining candidate fit with
49% 20%
an organization.

As discussed previously, hiring tools should be used only when they are known to add value to the hiring decisions and
to the organization as a whole. Legal guidelines and professional best practices clearly support the use of job-relevant,
valid hiring tools - that is, tools that are shown to be related to the job in question via job analysis and validation evidence.
Further research and evaluation will certainly lend more insight into the effectiveness, legality, and ultimately the continued
viability of Social Media as a hiring tool. Until then, we would urge employers to proceed with caution and consult their legal
counsel prior to using these tools in the hiring process.

Are We Treating Our Candidates As Customers?

Recent popular press has highlighted the importance of treating candidates as customers of an organization9, and research
supports this notion: recruiting and hiring processes that appear fair and job-relevant will garner better reactions from
candidates. Companies inherently seem to know this: nearly 84% of companies indicated that applicant reactions are
important in their recruiting efforts; and nearly 9 out of 10 companies view their hiring processes as an extension of
recruiting efforts (see Table 14).

Having a realistic process - including previews of what the job will entail and including face valid talent measurement tools
- will also help to ensure a positive candidate experience. Over 62% of companies use realistic job previews (RJPs) - or
real-world views of what a job will be like - to help applicants understand what they can expect from a particular job as part
of their hiring process. RJPs give candidates a true picture of what the job will entail, thus providing additional information
for the candidate to consider as he or she continues through the process. As for the preferences for realistic hiring tools,
there was a notable decrease in emphasis in 2010 (63%) versus 2009 (83%). As mentioned previously, this may be due in
large part to an overall reluctance to examining new types of hiring tools, particularly assessments, in 2010.

Despite the expressed importance of promoting a positive candidate experience, fewer companies actually measure
applicant reactions to their hiring and recruiting processes. Approximately 41% indicated they monitor applicant reactions
with surveys or other tools. For the companies who do monitor reactions, this feedback can help pinpoint recruiting and
hiring practices that are viewed favorably by top candidates and also identify areas that need to be improved.

9. Picoult, 2009.

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5. Testing the External Talent Landscape (cont.)

KEY FINDING 6

Treating Candidates As Customers Is Emphasized but Not Evaluated

Most organizations (84%) agreed that applicant reactions to the recruitment and hiring process are
important. For example, convenience to applicants was the most frequently cited reason (86%)
that companies use remote testing. However, only 41% of companies obtain feedback from their
candidates, who are likely to be their customers and/or future employees.

Table 14: Trends in Human Resources – Attitudes and Actions Toward Candidates

Percent Agree/
Survey Statement Change
Strongly Agree
2009 2010

Applicant reactions to the hiring process are important to our recruiting efforts. 81% 84% 3
Our company views the hiring process (including testing, interviewing) as an
93% 87% -6
extension of the recruitment process.

We use a realistic job preview as part of our hiring process. 59% 62% 3

I’d prefer to use assessments that appear realistic to the candidate (e.g.,
83% 63% -20
simulations).
The recruiting and hiring tools we use should accurately reflect our company’s
- 87% -
image and brand.
We monitor applicant reactions to our recruiting and hiring processes with surveys
- 41% -
or other tools.

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6. Measuring the Internal Talent Landscape

While most companies use assessments during the hiring process, fewer indicated using them with their current workforce
(50%; see Figure 7). While the effectiveness of assessment for hiring is widely acknowledged, talent measurement is also
valuable to understanding the landscape of employee competencies for the purposes of promotion, training needs analysis,
leadership development, and other internal talent management programs.

The results of our study related to the internal talent focus of companies - that is, on their current workforce - is clear: more
companies are attending to their employees and associated developmental programs than they are on hiring externally this
year compared to 2009 (see Table 6). There are many internal talent management initiatives that could benefit from a well-
designed assessment program. Most organizations (approximately 62%) use career development initiatives as a retention
strategy, but fewer than 30% of companies have a formal career development program in place (see Table 15). Likewise,
fewer than 30% of companies have a formal process for promoting leaders within their organization.

KEY FINDING 7

Opportunity Exists to Formalize Talent Programs

• While career development is a top priority and more than 60% of companies use it as a retention
strategy, only 29% have established a formal career development process for their employees.

• Only 28% of companies have a structured promotion process for leaders. This is a consistent
finding from the previous year’s survey.

• Only 50% of organizations indicated they use assessments/ talent measurement tools with their
current workforce. Of those who do, most use or plan to use such tools for career development,
training needs analysis, and promotion programs within their companies.

Table 15: Trends in Human Resources – Current Workforce Strategies

Survey Statement Percent Agree/ Strongly Agree Change

2009 2010

We use career development as a retention strategy. 69% 62% -7

My company has a formal career development program for all
30% 29% -1
employees.
My company uses a structured promotion process for all leader roles
31% 28% -3
across the company.

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6. Measuring the Internal Talent Landscape (cont.)

Employee Initiatives and Talent Measurement

Of the 50% of companies that indicated using assessments within their workforce, relatively more of them use or plan to use
talent measurement assessments as part of their career development, training needs analysis, and promotion initiatives as
compared to other internal talent management areas (see Table 16). These findings are mostly consistent with the results
found in the 2009 survey related to post-hire use of assessments.

Assessments can be a critical component of effective career development programs. Specifically, they can be useful as
tools to a) determine which employees would benefit from such a program, b) to provide employees key insights about their
own potential and development needs, and c) highlight potential career opportunities within the organizations given their
current skills and competencies.

Likewise, tests can be excellent tools to help pinpoint where to spend training dollars. By including tests in an overall
training needs analysis/skills gap analysis, companies can ensure the training programs they implement will focus on key
developmental areas.

Finally, just as with pre-hire assessments, talent measurement tools can be used as another key piece of information
in the promotion process within an organization. While most companies use performance and experience data to guide
promotion decisions, having assessment data about a candidate’s leadership potential, management judgment, or other
competencies that may not be revealed by reviewing an individual contributor’s performance data, can complement the
process for making promotion decisions.

Table 16: Use of Assessments with Current Workforce by Workforce Initiative

Post-Hire Program Currently Using Planning to Use Total Rank

Career Development 61% 25% 86% 1

Training Needs Analysis/Skills Gap Analysis 52% 28% 80% 2

Promotion 57% 20% 77% 3

Succession Planning 46% 29% 75% 4

Performance Management 45% 23% 68% 5

Bench Strength Analysis 29% 30% 59% 6

Training Certification 42% 17% 59% 6

Workforce Planning 28% 29% 57% 8

Outplacement/Redeployment 26% 16% 42% 9

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7. Looking Ahead: Talent Measurement in 2010 and Beyond

How will organizations measure their talent in 2010 and beyond? The lessons learned during the economic downturn
of 2008 and 2009 have highlighted the value of understanding the entire talent landscape of an organization, as well as
how talent management needs can change sharply over time. In the future, we anticipate organizations will continue to
value objective and “whole-person” talent measurement practices to aid in decision making. Likewise, we continue to see
technology play a critical role in the implementation, integration, and tracking of talent measures and data. Companies will
continue to desire to use realistic job previews and simulated assessments in their overall measurement strategy. However,
the use of simulations or other talent measurement tools must continue to be coupled with good science: evidence of
a relationship between performance on the assessment and relevant outcomes such as performance in the target job,
employee retention, or other key business metrics.

In addition to relatively new methods of talent measurement such as social media searches, several companies indicated
they are measuring talent in other unique ways: from scanning email responses to online assessment centers. Also, certain
companies are using webcams to verify their test takers, mock press conference simulations in assessment centers, and
examining attitudes during the test taking processes. It will be of interest to see whether new tools and approaches like
these become more frequent as technology and business needs continue to evolve. Similar to previous commentary, we
would implore companies to properly evaluate the validity and legality of any new or untested tools before using them for
hiring or other talent decisions.

Likewise, we observed a continuing trend of strong intentions to use best practices while not actually measuring the
effectiveness of such practices. For example, while a majority of companies recognize the importance of applicant reactions,
only 40% measure those reactions. While measuring the effectiveness of HR initiatives may involve cost in and of itself, the
advantages of such measurement (e.g., enhancing processes to be more effective, providing data on the effectiveness of
initiatives to stakeholders) can outweigh the cost long term.

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7. Looking Ahead: Talent Measurement in 2010 and Beyond (cont.)

Finally, the enthusiasm seen in the 2009 report (in which survey data were collected prior to the economic downturn in
late 2008) related to adoption of new and different types of talent management initiatives and tools appears to be relatively
tempered across several areas for 2010 (see the Appendix for a summary of findings from the 2009 survey). Organizations
generally appear to be more cautious – conveying a “wait and see” approach – toward planning to use new tools and
technologies (with the exception of social media, discussed in Section 5), although we expect this trend to reverse as the
economy recovers.

Taken together, the results demonstrate the current importance organizations place on initiatives such as performance
management and career development – two areas where objective assessments can assist greatly in decision making for
the organization. Few areas showed an increase in priority from 2009 to 2010, which is indicative of a cautious and focused
approach to HR programs. Areas decreasing in priority for 2010 include external recruiting/hiring and internal promotion and
placement, which are clearly influenced by current economic conditions and the likely continuance of trailing employment
behind any economic recovery10. The results above suggest that companies are looking inward – focusing their effort on
the performance and development of their current workforce. The decrease in focus on hiring externally coupled with the
concern regarding retention in the upcoming year(s) also supports this finding. Companies that focus efforts on their current
workforce, providing development opportunities and consistent and focused feedback about their performance, will have a
greater chance of meeting retention challenges as the economy improves.

Future administrations of the Global Assessment Trends Survey will be conducted annually with a broader global sample
of companies. Survey results will supplement observed talent measurement trends by evaluating continuity and change in
assessment use, and will also help HR and talent management professionals identify future talent measurement options
and opportunities.

10. Automatic Data Processing, 2009b.

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8. Additional Information

About PreVisor

PreVisor, the leading global provider of on-demand employment assessments and talent measurement solutions, helps
clients connect employment decisions to business results. Following the rigorous standards of industrial-organizational
psychology, PreVisor's assessment content accurately predicts on-the-job performance and supports fair hiring practices.
PreVisor's solutions help streamline hiring, reduce recruiting and training costs, and improve corporate performance for
clients worldwide, including more than 100 of the Fortune 500. www.previsor.com

About ADP

Automatic Data Processing, Inc. (Nasdaq: ADP), with nearly $9 billion in revenues and about 570,000 clients, is one
of the world’s largest providers of business outsourcing solutions. Leveraging 60 years of experience, ADP offers the
widest range of HR, payroll, tax, and benefits administration solutions from a single source. ADP’s easy-to-use solutions
for employers provide superior value to organizations of all types and sizes. ADP is also a leading provider of integrated
computing solutions to auto, truck, motorcycle, marine, and recreational vehicle dealers throughout the world. For more
information about ADP, or to contact a local ADP sales office, reach us at 1- 800-225-5237, or visit the company’s website
at www.adp.com.

ADP is a registered trademark of ADP, Inc.

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9. References

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sourcing-trends-and-predictions-2010/.

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Automatic Data Processing (2009). 2009 ADP Annual Screening Index. Retrieved December 14, 2009 from http://www.adp.com/tools-and-
resources/calculators-and-tools/adp-annual-screening-index.aspx.

Automatic Data Processing (2009). The ADP National Employment Report: November 2009. Retrieved December 14, 2009 from http://www.
adpemploymentreport.com/pdf/FINAL_Report_November_09.pdf.

Cappelli, P. (2008). Talent Management for the Twenty-First Century. Harvard Business Review, 86 (3), p. 74-81.

Beaty, J. C., Dawson, C. R., Fallaw, S. S., Kantrowitz, T. M. (2009). Recovering the scientist-practitioner model: How IOs should respond to
unproctored Internet testing. Industrial and Organizational Psychology, 2, 58-63.

Beaty, J. C., Nye, C.D, Borneman, M.J., Drasgow, F., & Kantrowitz, T. M. (under review). Proctored vs. unproctored internet tests: Are unproctored
tests as predictive of job performance? Under review at International Journal of Selection and Assessment.

Fallaw, S. S., Muñoz, C. S. & Dawson, C. R. (2005, April). Administering online testing: a benchmarking study. Poster presented at the 20th annual
conference of the Society for Industrial and Organizational Psychology, Los Angeles, CA.

Fallaw, S. S., & Solomonson, A.L. (2009). 2009 Global Assessment Trends Report. PreVisor.

Fallaw, S. S., Solomonson, A. L., & McClelland, L. (2009, April). Current trends in assessment use: A multi-organizational survey. Poster presented
the 24th annual conference of the Society for Industrial and Organizational Psychology, New Orleans, LA.

Fallaw, S. S., Solomonson, A. L., Montagliani, A. J., Wise, P. G., Gerber, E., & Facteau J. D. (2004, April). Selecting hourly, entry-level employees:
A benchmarking study. Poster presented at the 19th annual meeting of the Society for Industrial and Organizational Psychology, Chicago, IL.

Gatewood, R. D., Feild, H. S., & Barrick, M. (2007). Human Resource Selection (6th ed.). Fort Worth, TX: South Western College Publications.

Gunther, R., Parayre, R., Schramm, J., Schuurmans, F., & Seitchik, M. (2005). 2015: Scenarios for the Future of Human Resource Management.
Society for Human Resource Management Publications. April 4, 2008 from http://www.shrm.org/trends/ScenariosProjectExecSumm.pdf.

Manpower. (2008). Talent Shortage Survey: 2008 Global Results. Retrieved September 9, 2008 from http://files.shareholder.com/downloads/
MAN/410762656x0x189693/9adcf817-96cf-4bb3-ac68-038e79d5facf/Talent%20Shortage%20Survey%20Results_2008_FINAL.pdf.

Picoult, J. (2009, May 30)). Be Nice to Job Seekers. (They’re Shoppers, Too.). New York Times Online. Retrieved May 31, 2009 from http://www.
nytimes.com/2009/05/31/jobs/31pre.html?_r=1.

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Appendix A - Executive Summary of 2009 Global Assessment Trends Survey11

One hundred seventy companies from around the world responded to PreVisor’s Global Assessment Trends Survey to
provide their perspectives on talent measurement practices and trends. Key findings from the report are listed below:

• Key Finding 1: Top Talent Management Priorities for 2009

External Recruiting/Hiring and Performance Management are top priorities for companies around the world in 2009.
Internal Promotion/Placement is third in priority for U.S. companies, and Career Development is third in priority for
Non-U.S. companies.

• Key Finding 2: Top Talent Management Increases in Priorities from 2008 to 2009
Areas with the highest projected increase in priority for U.S. companies include Competency Modeling, Career
Development, and Bench Strength Analysis; whereas outside the U.S., Succession Planning and External Recruiting/
Hiring showed the greatest increase in priority.

• Key Finding 3: Confidence in the Value of Assessments

More than 90% of all companies believe testing is a valuable part of their hiring process. Approximately 50% of
clients reported that they collect metrics to show the value of HR investments.

• Key Finding 4: Preference for Simulated, Real-world Assessments

Most organizations indicated their preference to use realistic assessments. While many are not using job simulations
yet today, more clients plan to expand usage of simulations in the next year as compared to other assessment types.

• Key Finding 5: Plans to Expand Use of “Fit” Assessments

In addition to simulations, organizations plan to expand the use of “fit” measures (culture fit, job fit, and interest
assessments) in their hiring processes in the near future.

• Key Finding 6: Talent Measurement Post-Hire

Promotion, career development, and training needs analysis/skills gap analysis were the most frequently cited areas
where assessments are used to measure talent of a current workforce.

• Key Finding 7: Leader Selection – Important, but Not Structured

Nearly half of all companies agreed that assessments are a critical part of their succession planning programs, but
only one out of three clients agreed that their company uses a structured promotion process for all leader roles within
their organizations.

11. Note: The 2009 Global Assessment Trends Report provided results between U.S. companies and companies outside the U.S.

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