Home-grown companies surpass MNCs in usage of psychometric assessments

More Indian companies require the precision of such assessment techniques in identifying, retaining and developing the right talent.

The number of Indian domestic companies who make use of psychometric assessments is significantly higher than that of MNCs. A recent study by Willis Towers Watson revealed that 62 per cent of Indian domestic companies use psychometric assessments whereas among the MNCs the percentage of those using the same is 52.

The study shares how the recognised benefits of psychometrics largely remain unrealised in the country as almost half the companies acknowledge not using the same. However, the fact that only nine per cent of the companies are unwilling to explore a new tool also indicates a keenness among the vast majority to leverage advanced psychometrics. This fact also signals a need for improved awareness and access to superior tools.

Psychometric assessment is basically the science of applied psychology, which is intended to identify specific personality traits that could highlight the suitability for specific roles. The study polled over 100 of India’s top organisations and HR leaders to understand why companies in India lagged behind their mature market counterparts in realising the benefits of psychometrics, which can play a pivotal role in broad-based talent development.

Currently, psychometrics is primarily used for recruitment and selection in India. 81 per cent companies use psychometrics for candidate assessment and selection at entry level and 77 per cent at senior-management level. Although, application for talent assessment and development was around 50 per cent for most management levels, at the entry level it was a mere seven per cent; perhaps another indicator of the need for improved awareness around its benefits.

Moreover, the use of psychometrics for high-potential identification and development increases with the level with 19 per cent using it at entry level, 29 per cent at junior-management level and 52 per cent at middle-management level. On the other hand, despite succession planning being a key stated challenge for companies in India, the application of psychometrics in addressing this is low, with only 28 per cent using it at senior-management and 13 per cent at middle-management levels. This is a cause for concern.

The use of psychometrics increases with the levels owing to the fact that even the stakes rise with rising levels. The report states that psychometrics combined with qualitative assessments can help supplement and validate the evaluation results. However, one of the reasons that hold back certain organisations from extensively using psychometrics is, for instance, deployment of in-house tools like interviews and assessment centres. Respondents also cite high investment as a factor for not using psychometrics.

Shatrunjay Krishna, director – rewards, talent and communication, Willis Towers Watson, says, “Imagine how valuable it would be to hire only those employees likely to be engaged? Psychometrics, as a science, is yet to be fully explored and leveraged in India. In an increasingly competitive world, only traditional methods, such as interviews or aptitude tests may not be enough. Identifying, retaining and developing the right talent requires a precision that psychometric assessments can provide.”

Despite its proven value, there remain some barriers to successful penetration. More than a third of the companies who don’t deploy psychometrics, said they have never explored the option, or had low buy-in from the business or merely lacked training opportunities.

Krishna further stated, “It is encouraging to note that a vast majority of companies in India are willing to explore a new psychometric tool. Investment in training and developing a cadre of psychometric practitioners would lead to organisations understanding its impact on the talent cycle, which in turn, will lead to a wider acceptance and right selection of instruments.”

There is great opportunity for companies in India to broaden their use of psychometric assessments. By using the same across levels, HR and business leaders can ensure that no talent is overlooked and that important workforce strategies like hi-potential development and succession planning are suitably managed. In short, a holistic approach to psychometrics can be a cost-effective way for companies to create a high-performing and engaged workforce.