Five Benefits of Using Valid Online Hiring Tests for Technical Jobs

The current labor market is facing a turbulent storm — an influx of job openings, new hires, and resignations all at once. Right now in the US, there are two job openings for every jobseeker. Recruiters and hiring managers attempting to weather this storm are seeking new ways to attract talent and are increasingly loath to do anything that might drive talent away. As such, many seem to be more apprehensive about applicant testing, citing concerns over applicant fatigue and drop-off.

However, research findings haven’t really supported this fear — in fact, research shows that higher caliber applicants are more likely to complete and perform well on valid online hiring tests. The essential term here is valid. This is particularly critical for technical roles in which the application of a specific skillset is essential for effective performance. 

Working with job experts to validate tests builds confidence in the tests’ ability to discern applicants’ job-related capabilities. Giving applicants the opportunity to actually demonstrate their skills in a standardized way as part of the hiring process boosts our confidence that they have what it takes to apply those skills on the job.

Validity measures the degree to which the conclusions drawn from a test are accurate. In other words, does the test accurately measure job-related factors that predict job performance? Beyond predicting job performance, there are a number of benefits to deploying a valid hiring test for technical jobs. Below, Codility’s I-O psychologists will outline five benefits that generate ROI for tech recruiters when using valid online hiring tests:

Introduces objectivity into the hiring process.

Traditional methods of getting to know candidates such as resume reviews and unstructured interviews are superficial predictors at best and unconsciously biased at worst. Resumes commonly contain misleading statements and mischaracterizations of applicants’ experience, and unstructured interviews are notoriously subjective and susceptible to bias. 

On the flip side, well-developed, valid tests offer a more grounded and objective means of gathering job-related information on candidates. Applicant testing introduces more objectivity by providing tangible results that can be standardized and compared across all applicants. In other words, they give everyone the same opportunity to succeed.

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Online hiring tests streamline the hiring process.

Screening and shortlisting candidates is both challenging and time-consuming, especially for technical roles. A 2021 study from LinkedIn examined which jobs take the longest time to fill across 15 different industries. According to this study, engineering roles were the most difficult to hire for – taking an average of 49 days to fill these positions. 

Technical jobs in research, finance, and information technology (IT) were also among the slowest-paced jobs to fill. Deploying a valid hiring test early on during applicant screening can drastically reduce cost and time spent reviewing resumes or interviewing, thus freeing up recruiter and hiring manager resources to focus on speeding up the latter, higher-touch phases of the hiring process.

Reduces costs associated with mis-hires.

In today’s highly competitive tech economy, finding and hiring the best talent is more critical than ever. Companies are making significant investments of time and money in sourcing, recruiting, selecting, onboarding and training new employees. As such, it’s equally critical to avoid mis-hires because they come with staggering costs (at least 30% of the employee’s first-year earnings, according to the U.S. Department of Labor) and demoralizing effects for other employees as well as the new hire. 

Mis-hires often occur as a result of false positive test results; that is, the test incorrectly indicates a candidate has a particular attribute or skill when they really don’t. Job experts have a deep understanding of the knowledge and skills required to be effective in the role, as well as what types of proficiency standards are applicable. During test validation, we harness this expertise to help ensure the scoring criteria are as accurate as possible. Ultimately, this reduces the rate of false positive results, and likewise, mis-hires.

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Boosts test fairness to support inclusive hiring practices.

The process to validate test content can also have a fortunate by-product — it helps us ensure we are measuring things that matter for successful performance and ignoring things that don’t matter such as candidate demographic background. For example, in today’s labor market, white candidates are around 14% more likely to hold a four-year degree than Black candidates, according to the U.S. Census Bureau. Thus, a hiring process that automatically screens out applicants who lack a formal education yet have the requisite skills ultimately perpetuates structural inequalities stemming from systemic barriers to college access. 

In addition, when the process used to validate or set scoring standards for a test over-relies on input from members of certain groups, such as basing a test’s passing standards on a “benchmark” sample of responses from recent college grads, this too undermines the test’s fairness. Instead, deploying a thoughtful, well-designed validation and scoring strategy that pursues and takes advantage of input from a diverse set of stakeholders is far more likely to yield a test that is valid, fair, and inclusive.

By honing our signal detection mechanisms to focus only on the most important skills and qualifications, we are reducing noise where it matters and allowing for more diversity among candidates in the process. This is particularly critical for technical roles in which the necessary skillset can be difficult to come by. Ultimately, using an evidence-based, appropriate, and inclusive validation strategy helps ensure hiring decisions based on test results are grounded in the data and job requirements instead of relying on assumptions, hearsay, or organizational folklore about what an effective candidate “looks like.”

Empowers candidate choice.

A key factor impacting applicants’ testing experience is face validity — the degree to which a test appears effective in terms of its stated aims.The use of a highly face valid test that allows applicants to try out some of the skills they would ultimately use on the job in job-relevant situations serves as a realistic job preview (RJP). Decades of research have shown the powerful impact RJPs have on job applicants’ and employees’ career decisions. Use of an RJP is positively correlated with job offer acceptance, retention, met expectations, and job satisfaction. They also enhance perceptions of employer honesty in the recruitment process. Recently, researchers have emphasized the important role RJPs play in hiring and retaining remote workers. 

Given the prevalence of remote work in tech accompanied by high turnover rates among tech workers, including RJP elements in the hiring process is likely to prove particularly beneficial for these roles. A prime example of this is using a face valid, job-related hiring test to empower applicants to evaluate whether they would be well-suited for the role, and self-select in or out accordingly. This has the added benefit of helping to optimize the administrative resources needed to manage the applicant pool.

Despite popular concerns that online hiring tests might be off-putting to applicants, there is ample evidence to suggest the benefits of using valid hiring tests strongly outweigh the potential costs. They enhance consistency and fairness for all applicants, save exceedingly valuable time and resources, reduce error rates in hiring decision making, boost precision and accuracy in predicting job performance, and allow applicants an opportunity to decide for themselves whether they’d be good at and satisfied performing the job.

Want to learn more? Check out these resources on Codility’s approach to code testing validation and how our team of PhD I-O psychologists can help you validate your selection procedures in your technical hiring process.