psychometric-assessments-for-salesAlthough research on psychometric assessments for sales hiring has been conducted for decades, surprisingly few organizations are taking advantage of their benefits. Here’s why you should.

1. They accurately predict sales performance

Several meta-analyses reviewing hundreds of studies have consistently demonstrated that psychometric assessments measuring characteristics such as personality traits, cognitive ability, and selling skills are significantly related to sales performance (Barrick & Mount, 1991; Hunter & Hunter, 1984; Vinchur, Schippmann, Switzer, & Roth, 1998). In general (with some notation exceptions), individuals scoring higher on these characteristics tend to be better salespeople.

2. They are objective and data-driven

Psychometric assessments are superior to other methods of hiring due to their objectivity. Surveys show that people lie on their resumes. Research tells us job interviews are often a poor predictor of future job performance due to interviewers’ inherent biases such as their tendency to ask questions unrelated to the job. In fact, experiments conducted by Yale School of Management Professor Dana and colleagues (2013) have shown that conducting an unstructured interview actually reduces accuracy in predicting subsequent performance compared to not interviewing at all.

Compared to hiring someone based on gut instincts or because you “know a guy,” psychometric assessments provide a statistically derived answer to who is likely to be the best sales performer. Trusting cold, hard data is better for both the employer and the employee who can trust that the hiring process is based on fair and objective practices.

3. They are easy to use and understand

The vast majority of people have taken a (or several) standardized test in school or an online personality test for fun. Psychometric assessments specifically designed for hiring purposes generally aren’t any more complicated to complete.

4. They save you time

Psychometric assessments can be completed by potential employees within minutes and their results are often provided just as quickly to the employer. Rather than going through a drawn out multi-interview process and then finding out afterward that the candidate isn’t a good fit, a psychometric assessment can be used to screen in only the most promising candidates to take to the interview phase.

5. They save you money

Poor hiring decisions are costly. A recent survey by DePaul University’s Center for Sales Leadership found the average cost per hire was $29,159, the average turnover rate was 28%, the average cost of replacement was $49,508, and the average replacement time was 6.2 months. Using a valid and reliable psychometric assessment helps you more accurately identify salespeople who are more likely to fit in well with the job and your company culture, saving you money on hiring and turnover costs.

6. They even make you money

Accenture’s 2012 survey on sales performance found nearly 78% of sales reps take longer than 6 months to be fully productive and 47% of them fail to reach their annual sales quota. Utility analyses (i.e., analyses of a process’s practical economic value) indicate using a valid selection tool like psychometric assessments increases annual sales productivity by 21% per rep (Farrell & Hakstian, 2001). Scaling this over your existing productivity and size of your sales team translates into several thousands to several millions of additional sales revenue dollars per year.

Bottom line

So why should you use psychometric assessments in your sales hiring process?

They improve the quality of your sales hires, consequently reducing ramp-up time and turnover and netting greater productivity.

In today’s era of big data and data analytics, you can’t afford not to use them if you want to maintain a competitive edge.

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Ji-A Min

Ji-A Min

Head Data Scientist at Ideal
Ji-A Min is the Head Data Scientist at Ideal. With a Master’s in Industrial-Organizational Psychology, Ji-A promotes best practices and data-based HR. She writes about trends and research in talent acquisition, people analytics, and workplace diversity.
Ji-A Min