Is psychometric testing still fit for purpose?

Thousands of HR leaders rely on personality tools to bring objectivity to their decisions. But does the science support their case or undermine it?

“He did very well in the psychometric tests.” The reason given for handing former Co-operative Bank chairman Paul Flowers his role ahead of more experienced candidates will be forever etched in the minds of those who heard it explained to MPs on the treasury select committee.

Flowers, a former Methodist minster, had little experience in banking when he was appointed in 2010. Perhaps the bank was after a high roller willing to make strategic bets. What it didn’t expect was a scandal involving drugs, rent boys and a £1.5bn hole in its finances.

Flowers was manifestly unsuitable for his role. But his undoing didn’t serve as the epitaph for psychometric testing that many anticipated. In fact, the market for tests has since continued unabated: it would be rare to find an HR practitioner who hasn’t at least dabbled in their use, whether in recruitment, in development or when applying for a job themselves. According to assessment firm Cut-e, 61 per cent of businesses in mature markets use psychometric tests in some capacity. 

Other data suggests that more than 75 per cent of The Times Best Companies to Work For and 80 per cent of Fortune 500 firms use them. “As a means of supporting talent development, their use is only going to grow,” predicts Anna Penfold of executive search company Russell Reynolds.  

The concept of psychometric testing is nothing new. The first laboratory dedicated to the subject was set up in the 1880s at the University of Cambridge by American James McKeen Cattell, to gauge capabilities including reaction time, colour naming, memory and attention. 

In the last few decades, in line with the discipline’s commercialisation, the definition of a psychometric test has expanded from mental ability to include measures of personality, judgement, motivation and aptitude for a specific role. Dr Tomas Chamorro-Premuzic, professor of business psychology at University College London, says tools broadly fall into two camps: self reports, such as personality tests, and performance tests, which “measure mental horsepower”. In business, they are most prominent in executive search, but also in graduate and volume recruitment, and increasingly in promotion decisions.

Get it right, and the use of such tools can bring a myriad of benefits to HR processes, from mitigating bias or filtering out candidates to increasing managers’ self-awareness. Cut-e found that 81 per cent of those using psychometric tools expected to make more reliable and less risky decisions, and 57 per cent believed psychometrics could help predict future performance. 

With unstructured interviews in particular being a notoriously unreliable predictor of success in a role, adding tests to the recruitment process can bring badly needed objectivity. As Fiona Knight, senior leadership specialist from Russell Reynolds’ leadership assessment and succession practice, says: “We are in the business of judging people, so using data is one way of strengthening the objectivity of that judgement.” 

But get it wrong, and the consequences can be damaging to both organisations and individuals. And the bigger question now being asked in academic circles is whether businesses have become too reliant on such tools, swallowing unscientific claims and misinterpreting data to fit their own narratives. “Psychometrics are only as good as the tool – and the hands using it,” says Richard MacKinnon, occupational psychologist and insight director at the Future Work Centre. “They should never be used to make a decision, only to inform decision-making. But in less skilled hands, that’s what happens.”

Ian Florance of consultancy OnlyConnect, who helped set up Cambridge University’s modern psychometrics centre, says: “This is a really interesting period for psychometrics. There’s a big opportunity for better assessment, but there are also a lot of people making ludicrous claims based on people analytics or neuroscience.

“While psychometrics allow you to get a large amount of information in a short period of time and can add objectivity, tests can also tempt people to oversimplify, even if they aren’t that simple. If you use the Myers Briggs Type Indicator, for example, the temptation is to say: ‘This person is in this box.’” 

In development situations, Kathryn Austin, chief HR and marketing officer at Pizza Hut, believes that type-based tests like Myers Briggs can lead to people ‘playing’ to the results and exaggerating a particular side of themselves. “Psychometrics should be less about a one-time assessment and more about driving better behaviour and productivity,” she adds. 

Different tests have different purposes, and they must only be used as part of a suite of tools and HR practices. “Psychometrics need to be context-dependent,” says Knight. “No single tool should be used in isolation. It’s not about either/or. It’s over and above.” 

If someone is under stress, it will trigger them to respond differently, Austin adds, a risk that can be mitigated by using a broader suite of tools. That could also protect against concerns some have that an over-reliance on psychometrics unintentionally discriminates against neurodiverse people or those with certain mental health conditions – or that it favours those from selective schools or elite universities who are practised in such testing.

The slapdash or inappropriate use of psychometrics can damage candidate and employee experience by putting people through extensive assessments, and then not providing adequate feedback, for example. MacKinnon knows of executives who hold grudges against certain tools, blaming them if they miss out on a role. “The reputation of psychometrics suffers through bad practice and the fact that the market has some real nonsense,” he says. 

Avoiding this ‘nonsense’ can be a challenge, because of the large number of tools available and the wide variance in quality. Chamorro-Premuzic advises looking for scientific (if dry) evidence over shiny marketing materials. “Peer-reviewed journals count more, as the tools have been evaluated by angry, bitter academics,” he says. 

You’ll also need to spend time clarifying the objective: why does the company want to test people? Rob Briner, professor of organisational psychology at Queen Mary, University of London, believes all too often people let the tool define the problem: “Don’t be driven by the tool. Be driven by the problem you are facing. Audit all the psychometrics you use or are planning to use to see what value you are getting from them.”

In hiring, that means extensive role analysis to work out the desired competencies and behavioural traits, rather than retrofitting a job to a tool. If cultural fit is a priority, make sure the test publisher or occupational psychologist understands your business and that its tools are bespoke. But don’t reinvent the wheel, says Chamorro-Premuzic: “What makes a manager great in your company is not so different to another company. It tends to be: smart, nice, driven. So how do you assess that?”

David Frost, OD director at fresh food firm Total Produce, has trained extensively in psychometrics to better understand the psychology behind the tools and has found the science particularly useful in executive recruitment. “I don’t think it gives all the answers but it provides a more informed platform to ask better questions of the candidate and to probe deeper,” he says. That means interview panels must be briefed to ensure they are using the insights gleaned from the data appropriately.  

Carefully matching psychometrics to job roles isn’t necessarily about ‘good’ or ‘bad’ but about delving into potential risk or success factors. This can be especially useful in the later stages of interview for senior hires. Frost uses the example of recruiting a senior sales executive who needs to be on the road for extended periods: “That requires more of a degree of independence and is less about working in a team.” He cites an HR peer from an airline that, after a couple of near misses, re-evaluated its pilots and found the ideal profile included a higher degree of risk-taking and willingness to go outside the rules than it originally assumed. 

Having insight from psychometrics can also help hires hit the ground running and avoid derailment, particularly at executive level. This is just as true of internal candidates. Frost says of a recent internal promotion: “[The tests] showed where he needed support and led to a conversation we might not have had otherwise.”

At the other end of the scale – volume recruitment at more junior levels – tools can help automatically filter candidates. Gamified versions are becoming popular in graduate and apprentice recruitment, driven by professional services firms like Deloitte and KPMG. Gamification brings several advantages, says Chamorro-Premuzic, including the ability to scale and open up the candidate pool, which could lead to increased diversity. However, he warns, the tools don’t tend to be as accurate: “There’s a tension between being accurate and being fun.”

At Pizza Hut, psychometric tools are used both in volume recruitment and employee development. In recruiting, the tool looks at underpinning values and behaviours, tied to company culture. “It’s fundamentally embedded in the culture and linked to values,” Austin says. “It’s not just a one-time tool that tells you about someone’s ability or personality. 

“At Christmas, for example, we may be looking for people who are less focused on long-term careers, so the tool can be more functional. At other times, we may be looking more at talent planning and building the pipeline.”

Luxury hotel chain Dorchester Collection is developing bespoke situational judgement tests that present candidates with several scenarios they could face in the role. “The purpose is to create an engaging experience for candidates at the first stage of the application process,” says people and talent manager Yasmin Boromand. “By giving a realistic job preview, we are also able to decrease drop-out rates.” 

For successful applicants, the reports provide insight to managers, enabling them to support ongoing development. Such an approach both extends the value of the investment in the test by linking it to employee lifecycle rather than remaining a recruitment one-shot, and helps improve managers’ skills. “Training people to use psychometrics helps them become better managers because they learn about human psychology,” says Florance. 

Using psychometrics in manager development has been so successful at Pizza Hut that “even the most cynical members of the finance team see it as a driver of productivity”, says Austin. “We’ve seen tangible performance benefits because of people gaining self-awareness and recognising what triggers them and stops them making a difference.” 

For one restaurant manager, a better understanding of his behaviour using the development tool has helped his restaurant become the most profitable in the business: “Imagine that being replicated across 400 restaurants – how much it could change company performance.” 

The evolution of technology is also shifting the boundaries of what’s possible. “AI and gamification mean things are changing,” says Florance. “The next 10 years are going to be extraordinary, but you have to be careful – there’s some bad stuff out there.”

Chamorro-Premuzic predicts that, in future, many more traditional psychometric tools will be replaced; he foresees a world where HR professionals use data from multiple sources (marketing data, insurance claims and workplace information such as email data) to build talent profiles. In fact, he’s surprised it hasn’t already happened: “If you’d asked me 10 years ago whether we’d still be using psychometric tests, I would have said no. I would have predicted that we would be using the data people leave behind online in an ethical and transparent way.”

If that sounds like a landscape devoid of human judgement, Frost emphasises the importance of “the human factor”, reflecting that every time he has “ignored [his] gut and gone with the science”, the person he hired has been wrong for the organisation: “As HR people, we know the culture and the people they will be working with. There needs to be a health warning attached to psychometrics: don’t think you can know everything about someone from a piece of paper.” 

But there also needs to be a health warning attached to leaving people decisions solely in the hands of imperfect, biased managers, even if the tool isn’t perfect either. In the right hands, the blending of art and science should ultimately lead to stronger decision-making. Which means the real strength of testing may be that it prevents too much reliance on instinct.

“Psychometrics is not an exact science, it’s a social one,” says Knight. “It gives you evidence, but you have to look at other areas too. It can pull you back to your objectivity and strengthen your decision, but it can’t make the decision for you.” 

How psychometric testing helped a bus firm boost its reputation

Jeff Counsell, managing director of East Midlands bus company trentbarton, is an old hand at using psychometric testing in an unexpected setting. His business has been using a tool from Thomas International for more than 20 years – and has been reaping the rewards. 

“We took a leaf out of retailers’ books and decided to speak to customers and non-users to find out what turns people on or off buses. We’d used psychometric testing before that as a tool to identify staff at a supervisory level, but we’d really just taken that for granted. When we conducted our own research, customers told us what one off their biggest turn-off was: ‘Your drivers just take us for granted; they don’t speak to us.’

“It was like a lightbulb moment for us – in retail, that kind of experience stops you going into certain shops. So we started using basic psychometric testing to recruit those with people skills, who can bend the rules and act on their initiative and in the interests of others when things go wrong. We have that profile set in. Then we also looked at the profiles of drivers who are really good, took a sample of them and said ‘this is a profile others should match’. 

“Every person who comes to us, whether they be a driver or a supervisor, or they’re in admin or engineering, now completes a psychometric test. 

“We haven’t paid for advertising for bus drivers for three or four years – we’ve got a waiting list. Invariably, our applicants will say: ‘You’ve got a good reputation; your drivers are good so I want to come and work for you.’ And when we ask customers why they travel with trentbarton, nine times out of 10 they’ll say: ‘Because your drivers are nicer, and I get a greeting every morning.’”

What did we find out when People Management put 24 HR leaders through a series of psychometric tests? Read our analysis.