Employers are increasingly using personality testing to make hiring decisions, now that hybrid and remote work has become much more prevalent, The New York Times reported.
This $2 billion dollar industry, in the estimate of psychologist, author and entrepreneur Tomas Chamorro-Premuzic, has become particularly useful in the current age. “Covid has opened our eyes to the fact that there are different ways in which we can work,” said David Noel, senior vice president of global human resources at Scotiabank, one of Canada’s Big Five banks, which uses a personality test called Plum. “Personality testing can be a part of that.”
The industry expanded rapidly in the late 1990s and early 2000s as the tests were computerized, Chamorro-Premuzic told the Times. One hundred million workers worldwide take tests designed to study personality and aptitude, the Times reported.
These tests can be part of hiring process. At Scotiabank, the campus hiring program is now focused partly on Plum results and not on résumés, which the bank stopped considering for these candidates in 2020. With hiring managers looking beyond familiar credentials, a more diverse talent pool has emerged: The number of new employees who are Black rose to 6 percent from 1 percent, and over half its hires are women.
“Résumés are a better predictor of past privilege than future potential,” Matt Spencer, chief executive of personality testing company Suited, told the Times. His company, designed for law firms and banks, bases hiring decisions on character and not just education.
Caitlin MacGregor, co-founder of Plum, once conducted an experiment for a previous employer. She narrowed a pool of 80 job applicants down to one who stood out on a résumé and one who stood out in a psychometric assessment. She hired both, as her boss told her that the cost of picking the wrong person was $300,000. The applicant who outperformed on the psychometric test rose to the company’s top ranks within a year and a half, she told the Times.
Testing can also help to identify viable candidates when interviews are not conducted in person, she maintained. “For a long time, people were comfortable making decisions around talent based on face-to-face interactions,” she said. “More and more companies have a distributed work force. It’s harder than ever to get to know your people.”
Spencer told the Times of a law firm that used a Suited personality test to take a chance on a summer hire, when the four employees interviewing her split on the decision. The test made the candidate stand out, as it yielded a perspective that was not apparent in the interview process.
As executives make key decisions on whether to require in-person, hybrid or fully remote workplaces, testing can help to gauge the right personalities for the environment.
In remote workplaces, “it’s a different style of working, which means different characteristics will matter,” said Spencer.