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Practical Assessments Should be More Widely Adopted to Evaluate Professional Talent

Thought Leadership

Practical Assessments Should Be More Widely Adopted To Evaluate Professional Talent

September 1, 2022

Nikki Bardsley

A solution that expands employee pools and zeroes in on increasingly important job skills

Employers everywhere are having a difficult time finding and retaining great employees. One reason is the increasing importance of intangible “soft skills.” A recent analysis of 82 million job postings found that seven of the 10 most commonly requested skills were soft skills: attributes like communication, adaptability and critical thinking. Yet while there’s no shortage of soft skills listed on resumes — “people person,” “self-starter” — it’s difficult to confirm these independently. 

Another reason for the increased difficulty in recruitment and retention is a simple shortage of talent. The labor market is currently candidate-driven, with employers competing for talent, and workers who are more likely to leave a job if something more attractive comes along. More than half of employees in the United States, for example, are actively looking for work or at risk of leaving, according to the 2022 Global Benefits Attitudes Survey from Willis Towers Watson. Employers simply need a larger pool of prospective employees. As a result, a handful of major companies have dropped degree requirements from some positions in response. Filtering that expanded pool for candidates most likely to succeed professionally requires a separate solution. 

One solution that some employers are turning to in the pre-hire process: practical assessments, to either more accurately filter talent, expand candidate pools or both.

A holistic, hands-on evaluation

Practical assessments use scenario-based questions and an oral component to test a suite of relevant skills. Many professional jobs will always have academic requirements, and rightly so. But even for those, academic performance is an imperfect proxy for on-the-job competence. Widespread belief to the contrary is leaving graduates less prepared for work roles. At the annual higher education conference of The Institute of Chartered Accountants in England and Wales (ICAEW), which I attended in July, it was noted that prospective employees were frequently unaware that employers value soft skills like communications, resilience, and passion.

Conversely, professional firms often screen out job candidates based on educational attainment or years of experience early in the recruitment process, ignoring potential candidates who may have the aptitude for the position but not the resume. By instead using a practical assessment as the first filter, employers can identify prospects who might develop into excellent employees.

Consider the practical assessment for qualifying by the Solicitors Regulation Authority in the U.K. It requires candidates to work through a legal case in a live setting, revealing more about their ability to do the job than just a multiple-choice test can. While this assessment is specifically used to determine if an individual has what it takes to become a qualified Solicitor, this same kind of hands-on, scenario-based assessment can be applied towards evaluating professional competencies in other industries as well – for example, vetting candidates in the pre-hire process to identify whether they have the necessary competencies and skills beyond academic qualifications. Incorporating an assessment to evaluate an individual’s potential to do the job is just as relevant to the hiring process as it is to the professional qualification process.

Employers can use [practical assessments]...to find bright, talented people without degrees, who can be developed into exemplary employees.

EY’s decision to drop degree classification requirements from its hiring process in 2015, relying instead on its own assessments of graduates’ competence and character strengths, put it ahead of the curve. Just a few weeks ago, PwC followed suit, no longer requiring UK applicants to hold a 2:1 degree (a bachelor’s degree with high marks). Instead the company will use its “own aptitude and behavioural testing [to] assess a candidate’s potential.”

Practical assessments are a valuable tool for assessing a group of applicants to find the ones who will add the most value to an organization. Because a practical assessment can provide a more insightful view of each candidate’s competencies, employers can use it to expand employment pools to include graduates who may have less-remarkable transcripts but high potential, or recruit from colleges with less-prestigious names and find bright, talented people without degrees who can be developed into exemplary employees.

The practical assessment in action

The U.S. Financial/Wealth Management industry provides a unique example of the use of the pre-hire assessments. Historically, large financial firms have hired prospective financial advisors based on their network (which would be an indicator of assets that the individual could potentially attract to the firm), before they’ve passed the required Series 7 exam. If they can’t pass the exam after two tries, they are terminated. While it’s obviously a high-stakes situation for the employee, it is for the employer as well. Financial firms spend millions in onboarding costs and paying the employees who won’t end up making the cut. Several firms have begun to run candidates through a pre-hire assessment that helps determine the likelihood of passing the Series 7 and subsequent challenging securities licensing exams. This has allowed firms to cast a much wider, and diverse net –- bringing in individuals who may be mid-career or in current roles outside of the financial industry.

In any environment, traditional recruitment measures are bound to exclude some excellent prospects and qualify some incompetent ones. Amid a tight labor market and an increasing emphasis on soft skills, that systemic inefficiency is heightened. A well-designed practical assessment can highlight candidates who could be developed and filter out those without the job-specific skills that are difficult to teach.