Undeniable Proof that Psychometrics Have a Good Return on Investment

Do Psychometrics mean money spent, or money WELL spent? Here’s the undeniable proof that psychometrics have a good return on investment.

People Strategy

Christine Chartrand

VP Consulting Services

Wednesday, January 28, 2015


Are you thinking about implementing a psychometric test in your organization? Perhaps you are worried about investing time and energy in something you’ve never used before, or maybe you are doubting its effectiveness and reliability?

Not all psychometric solutions are complicated. In fact, many are very user-friendly, while still maintaining precision, accuracy and scientific validity. Here are ways that psychometrics can have a good return on investment, and hopefully make your decision to use one a little easier!

A good return on investment requires identifying the problem

First and foremost, why are you considering using a psychometric test? It’s likely that you are looking to improve or solve a problem. Whether it be ineffective selection process, poor management, high turnover, sales drops or customer complaints, to only name a few, it is imperative that you identify and define these issues in order to determine whether or not it will be a good return on investment.

A good return on investment requires knowing what success looks like

So now that you have identified the problem(s), you need to know what “attaining your objective” actually looks like. This can take several shapes and forms. For example, reduced turnover rates by 20%, savings in hiring costs, or sales targets increased by X amount, are some quantifiable evidence that your choice has proved to be a good return on investment.

While not disregarding the formula for calculating your ROI (Gain from investment – Cost of investment / Cost of investment), you may also choose to see success in other ways, such as better communication within your working teams, energy levels rising, synergy, customer satisfaction, or increased employee engagement.

So how exactly does a psychometric test help improve these aspects of your organization and close the gap between where you are to where you want to be?

Detecting the right candidates NOW has long-term benefits

We are all aware that hiring the wrong person can be costly. It’s time and money spent on their onboarding and development, only to find out later that they were not cut out for the job in the first place.

Let’s not forget about your current employees, who might be picking up the slack for those who can’t do their jobs properly, or who are let go, having a pile of work for someone else to handle.

A psychometric test is a good return on investment because it goes beyond experience and interview process. It tells you how people are built, if they have the right blueprint for the competencies and responsibilities asked of them in a given position, and most importantly, their long-term potential.

In other words, investing in such a test now can save you a lot of money now AND later!

Knowing their developmental needs earlier on

As a good manager or HR specialist, you want to bring out the best in your employees. This can mean investing time and money in a developmental plan, training and business mentoring. But how do you know what types of coaching they really need, even prior to seeing them in action?

Sure, you can obtain a certain amount of information from their experiences (or lack of), but implementing a psychometric test will undeniably give you more insight on certain tendencies that are much less natural, and what types of training may be more suited for their needs. This earlier detection can be a good return on investment because once again, you have tools available to understand what type of personality you are working with at the start, instead of finding out later and having to make the necessary adjustments.

With the right psychometric tools, you can also compare a candidate’s results to an ideal profile (or job norm) and easily see where they would need development compared to this benchmark, hence, putting your money where its most useful!

Seeing the fit between candidates and their managers

It can happen that employees leave your organization on their own terms, not because they aren’t suited for the position, but because of poor relationships with their managers or co-workers. And since a lot of conflict or miscommunication can stem from differences of personalities, investing in a psychometric tool, such as a complementarity report, can help you anticipate certain risks and incompatibilities that could arise, as well as help you align the right managers with the right employees.

That kind of psychometric tool definitely proves a good return on investment because it can significantly reduce turnovers due to internal conflicts and ineffective management.

Investing in your employees’ health

Employees can develop a lot of nervous tension when they are continuously going against the grain in their work. In other words, when their personality and natural reflexes are not aligned with their job. This can lead to demotivation, stress and even burnouts.

So how does this translate into time and money lost? Well, there’s a better chance for increased sick leave, absenteeism and presenteeism.

Incorporating a psychometric solution can prevent a lot of this from happening because you are taking the time to understand the areas in which your employees will be best suited, as well as how they will handle criticism and frustration.

As Canada Business Network so eloquently put it: “Workplace well-being allows employees to make meaningful contributions and develop to their full potential. Fewer sick days, less absenteeism and reduced turnover can only result in a win-win situation for everyone.”

So investing in psychometric solutions means investing in your company’s most important asset: your employees!

Investing in a psychometric tool is undeniably money well spent. It can help you solve issues related to turnover, employee incompatibility with job and/or manager, ineffective development, demotivation and high stress levels. Knowing that the right person is in the right position and getting the right coaching will only better your human capital and reduce costs associated with trial and error….Getting it right the first time: now THAT’S a good return on investment!

So, what’s your final decision?

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