Why Do Companies Use Psychometric Assessment?
Hiring the right person for a job is more than just scanning résumés and conducting interviews. A great candidate on paper might not always be the best fit in reality. And let’s face it—making a bad hire can be costly, not just financially but also in terms of team morale, productivity, and overall company culture.
That’s why more and more companies in Australia are turning to psychometric assessment as a smart, data-driven approach to hiring and employee development. These scientifically validated tests go beyond gut feeling, helping businesses make objective, informed decisions about who’s the best match for a role.
What Exactly is Psychometric Assessment?
Think of psychometric testing as a way to measure the things you can’t always see in an interview—like a candidate’s problem-solving skills, cognitive abilities, and personality traits. It’s like shining a light on how someone thinks, makes decisions and interacts with others.
From aptitude tests to personality tests, these assessments provide valuable insights into whether a candidate has what it takes to succeed—not just in the role today, but in the future as well.
So, why are Australian businesses investing in these assessments? Let’s break it down.
The Benefits of Psychometric Tests in Hiring and Development
1. Avoiding Costly Hiring Mistakes
A bad hire doesn’t just cost time—it can cost up to 1.5 times the employee’s annual salary in turnover, lost productivity, and recruitment efforts¹.
By using psychological testing and assessment, companies gain a deeper understanding of a candidate’s strengths and weaknesses before making a hiring decision. This reduces the risk of hiring someone who looks good on paper but struggles in the actual role.
2. Reducing Unconscious Bias in Hiring
We all like to think we’re great judges of character, but the truth is, first impressions can be deceiving. Research shows that within seven seconds of meeting someone, we form an opinion about them, often based on unconscious biases².
Psychometric testing levels the playing field by introducing objective, data-backed assessments. Instead of relying on gut feelings, businesses can assess candidates based on actual job-related competencies. This creates a fairer, more effective hiring process.
3. Finding the Right Fit—Beyond Just Skills
Hiring isn’t just about finding someone with the right skills. It’s about finding someone who’s the right fit—both for the job and for the company.
A personality test can reveal whether a candidate’s work style aligns with the role’s demands and the company’s culture. For example, a highly analytical and detail-oriented person might thrive in a finance role but struggle in a fast-paced creative environment.
When companies get the person-job fit right, employees feel more confident, engaged, and productive. And when employees are happy, they stick around longer—saving businesses time and money on recruitment.
4. Identifying High-Potential Employees
Sometimes, the best person for the job isn’t the one with the most experience—it’s the one with the most potential.
Psychometric assessments, like cognitive ability tests, help businesses identify candidates who have the problem-solving skills, learning agility, and adaptability to grow into more senior roles down the line. This allows businesses to invest in the future leaders of their organisation.
5. Supporting Employee Growth and Development
Psychometric assessments aren’t just for hiring—they’re also powerful tools for employee development.
By understanding an employee’s strengths and areas for growth, companies can provide targeted training, improve team collaboration, and build stronger leaders. Employees who know their strengths and challenges become better decision-makers, communicators and problem-solvers—leading to higher engagement and productivity.
To take a deeper dive into the benefits, read our article: The Power of Insight: 5 Benefits of Psychometric Assessments for Recruitment and Development
Types of Psychometric Tests Used for Selection
Different roles require different skills, so businesses use a mix of aptitude and personality tests to assess candidates.
Aptitude Tests (Measure Problem-Solving and Cognitive Abilities)
◾ Verbal Reasoning Tests – Assess the ability to read and interpret written information, make logical conclusions, and communicate effectively.
◾ Numerical Reasoning Tests – Measures the ability to evaluate numerical data and problem solve to determine a candidate’s ability to make correct decisions.
◾ Inductive Reasoning Tests – Evaluate how well a candidate can identify patterns, trends, and logical rules, which is essential for roles requiring abstract thinking and problem-solving.
Personality Tests (Measure Behavioural and Workplace Traits)
These tests help assess personality traits, preferred work styles, and how candidates might fit into your company culture. They’re particularly useful in predicting team dynamics, leadership potential, and cultural fit.
By combining these tools, businesses can boost their hiring accuracy and ensure they find candidates who not only have the right skills but are also the best overall fit for the role and organisation.
What is the Statistical Validity of Psychometric Assessments Compared to Traditional Hiring Methods?
Statistical validity measures how well a test predicts job performance, expressed as a correlation between -1 and +1. A score of 0 would mean the test is no better than a coin toss, while a perfect score of 1 would indicate flawless prediction—which, of course, is unattainable.
Historically, the classic Schmidt and Hunter (1998) study set the benchmark for these assessments, with cognitive tests and other methods achieving strong validity estimates. Recent research by Sackett et al. (2022) highlights the continued importance of selection assessments, with cognitive tests showing validity of .31 and structured interviews at .42. These assessments remain valuable tools for evaluating candidate potential, offering critical insights that support informed hiring decisions. When used alongside other data points, they contribute to a more comprehensive and balanced selection process.
Even with these revisions, both types of assessments offer critical insights into a candidate’s potential. They’re best used to complement other data points, contributing to a more balanced and informed hiring decision.[DO1]
How Online Psychometric Assessments Can Help
At Aspect Group, we empower businesses to make data-driven hiring decisions through our use of scientifically validated online psychometric testing. While we remain agnostic about the tools we use, our preferred test publishers are industry leaders like SHL and Saville. This means you benefit from robust, proven cognitive and personality assessment solutions that help you secure the right talent and drive long-term success in your organisation.
Whether you’re looking to:
✅ Improve your selection process and hire the right people
✅ Reduce hiring risks and cut turnover costs
✅ Develop high-performing teams and future leaders
Our tailored reports are designed to fit the unique context of your role, company culture, and candidate pool, providing deeper insights for more accurate hiring decisions and reducing costly turnover. We also debrief with the hiring manager to discuss findings and alignment with your unique needs, while offering constructive feedback to both successful and unsuccessful candidates. This added value not only enhances the candidate experience but also helps protect your employer brand.
In short, you’re not just paying for a report—you’re investing in a thoughtful, comprehensive process that boosts your hiring outcomes and builds smarter teams.