TM Survey Headlines
Our ground-breaking survey on how talent pools in organisations has been completed, and has generated several key conclusions.
Talent pools are identified by past performance
Appraisals, past performance, and managers’ ratings are almost universally used to identify members of talent pools. Psychometric testing to indicate future potential is used by only one third of those organisations with talent pools, although the largest organisations were much more likely to use them. Another popular method of determining who should be included in talent pools was 360-degree feedback.
The schism on whether psychometric testing helps identify future potential endures
Just over half of respondents said they didn’t believe psychometric testing helped identify future performance; just under half did. Senior HR executives from the largest organisations were much more convinced that testing does help, however. By and large, respondents from the smaller organisations did not believe testing was helpful in identifying future performance.
If you are a believer, you use psychometric testing constantly
While only one third of respondents overall used psychometric testing to help identify members of the talent pool, over two thirds of respondents who are regular users of testing use them to identify members of the talent pool.
If you psychometrically test your talent pool, leadership is the most common test
Leadership tests were the most common tests applied to talent pools, followed by personality tests. Cognitive/IQ tests were the least commonly used.
Organisational norms are not the norm
Less than half of respondents say their organisations have developed organisational norms via testing. The business services sector leads the way, and the public sector is least like to have developed organisational norms.
Psychometric testing and talent pools don’t have much in common
Less than a quarter of respondents had psychometrically tested members of their talent pool. Larger organisations were most likely to have done so.
Non-users have many reasons
A quarter of the organisations who do not use Assessment and Development Centres say the main reason for not doing so is because they are not found to be relevant or useful, while one fifth say the main reason is the culture of the organisation, and a further fifth say that cost is the main reason for not using them.
Recruitment is the major focus of Assessment and Development Centres activity
The small number of organisations that do use assessment and development centres use them mostly for external recruitment. Only a third of organisations that use them do so for internal purposes.
Assessment and Development Centres are for top dogs
Senior executives and middle management are the main recipients of assessment and development centres, rather than more junior or graduates positions inside organisations that use Assessment and Development Centres regularly or occasionally.
Assessment and Development Centres are not typically used for talent pools
Of the small number of organisations who use Assessment and Development Centres, only a third of organisations use them for talent Pools. This means that only a handful of organisations in Australia use Assessment and Development Centres on their talent pools.
While only a handful of organisations use Assessment and Development Centres on talent pools, over two thirds of organisations that used them regularly or occassionally found them useful in predicting future performance.
An Assessment or Development Centre is a rare event in Australia
Most organisations assess less than 50 people per year; but six percent of organisations assess more than 1,000 people per year.
Psychometric testing passes the test in Australia (just!)
More than half of the organisations surveyed use psychometric testing. Just over a quarter of respondents used testing regularly, while just over one third used them occasionally. Just under 40 percent of respondents didn’t use testing at all.
Larger organisations were much more likely to use testing, smaller organisations less so
The most popular main reason given for not using testing was that there was no need to use them. The culture of the organisation and the cost of testing were the next two most popular reasons for not using testing.
Psychometric testing is used mostly for external recruitment
Three quarters of organisations that used psychometric testing used it for external recruitment purposes. Less than a half used testing for other purposes. The least used application was testing to identify future potential. The larger the organisation, the more likely it is that testing will be used for identifying future potential.
Psych testing used predominantly for senior positions
While nearly 90 percent of test users used psych testing for senior executives, and a further 80 percent used them for middle management, only one third used testing for graduate positions
Psych testing predominantly outsourced
Nearly 60 percent of respondents outsource testing of candidates to a third party provider. Just under a quarter conduct testing in-house, while just under a fifth do both. The size of company has little influence on whether organisations outsource testing or not.
Two thirds of in-house testers said they would not allow an unsupervised test.
Organisations use testing sparingly
The majority of organisations use psychometric tests sparingly: Seventy-two percent test fewer than 100 people a year. Just under one tenth of organisations say they test more than 500 people per year. The largest users of testing are the finance and insurance sector, and the business services sector. Most of the biggest test-using organisations come from these two sectors.
Money is the big testing issue
The largest constraint organisations face in undertaking testing is budget (well over a third of organisations claim this constraint), while find the time and getting sign-off from the manager are two other constraints to undertaking testing (just under a third of organisations reported each of these constraints).
How the research was conducted
The study was conducted by telephone, with either the most senior HR-dedicated executive in the organisation (90 percent of cases), or a less senior HR executive who was responsible for talent management within the organisation (10 percent of cases). Two hundred and forty-three separate organisations completed the survey, and these organisations represent employ 431,000 people. The study was conducted in November and December 2006, and January 2007.
All data has been aggregated, and the respondents were industry weighted to provide a representative sample of organisations as far as industry sectors was concerned (mapped against the industry breakdown of the dataset). The sample was over-weighted towards large- and medium-sized organisations, since this was the segment Harbour Future Leaders (HFL) most wanted to understand. The dataset used for the research was the Fairfax Business Research dataset of medium to large organisations. The dataset included the name and job title of the most senior human resources dedicated executive in the organisation.