How Skills Testing Can Help You Reduce HR Expenses

Hiring is a significant investment for any business. According to a Glassdoor study, the average cost of recruiting an employee is around $4,000. However, it varies by company and job role.

It is not a process that can be rushed. If you guess wrong, you incur additional expenses to terminate the employee who did not work out and must repeat the hiring process. According to the US Department of Labor, a hiring mistake costs about 30% of an employee’s first-year earnings; some staffing agencies estimate the cost to be around $240,000 to $850,000 per employee.

Turnover is also a big problem. A recent Gallup study showed that turnover costs U.S. companies $1 trillion annually and that a 100-person organization that pays an average salary of $50,000 could have yearly turnover and replacement costs of approximately $660,000 to $2.6 million per year.

Organizations partner with an industry-leading skills testing provider such as eSkill to reduce recruiting expenses and minimize turnover. Assessments such as basic computer skills tests enable HR teams to instantly screen applicants and identify the best-qualified candidates. This helps them reduce hiring costs and expedite time-to-hire. Many eSkill clients have cut hiring costs by up to 70% and decreased time-to-hire by 60%.

Why Employers Implement Skills Testing

When HR professionals post a job, they often receive hundreds or thousands of responses. Unfortunately, it is impossible to determine which candidates have the required knowledge and experience by reviewing resumes and conducting interviews.

Over 77% of applicants exaggerate their qualifications and experience. This means a company could hire a candidate who looks and sounds good, only to have the person leave or be terminated a few months later. Skills testing minimizes the chances of this happening because recruiters can instantly screen applicants by sorting assessment scores.

Why Reducing HR Expenses is Important

HR teams spend hours reviewing resumes, conducting interviews, and checking references to ensure they hire the best candidate. However, about 50% of new hires fail despite these efforts. It happens at every job level and in all departments, from assembly workers on the production line who are paid hourly to C-level managers in the executive suite who command six-figure salaries.

Hiring mistakes impact employee productivity and cause low staff morale. Newly hired employees are not productive for the first few months while learning how to do their job. If a new hire does not work out, the business is forced to repeat the recruiting process, which means the “learning curve” begins again. Meanwhile, other employees must “take up the slack” until a new person is hired and gets up to speed. Other risks include missed sales opportunities and loss of customer goodwill.

How Skills Testing Help Reduce Hiring Expenses

Skills testing takes the guesswork out of hiring. By evaluating assessment results, HR teams can instantly see which employees are best qualified and have the highest probability of success on the job and at their company. These are some of the ways skills testing helps organizations reduce hiring expenses and minimize turnover.

• Extensive Assessment Library:  The eSkill Assessment Library includes hundreds of validated subject- and job-based assessments. HR professionals can choose computer skills tests to evaluate applicants’ MS office abilities or skills tests for specific jobs, such as Administrative Assistant, Data Analyst, and Manufacturing Engineer.

• Customized Skills Tests: One-size-fits-all assessments often do not work because organizations’ requirements can differ for a given job role. The eSkill Talent Assessment Platform^TM allows HR teams to build customized skills tests that cover all essential job functions for each of their positions.

For example, if an HR team is hiring customer service representatives for a call center, they can build an assessment using questions from computer skills tests such as Basic Digital Skills and Basic Computer Knowledge and questions from the Customer Service and Call Center Operator assessments.

• Job-Related Simulations: HR professionals can see which applicants are best qualified for a job by presenting them with situations that mimic job-related situations and observing how they perform. Continuing with our call center example, recruiters can use Inbound and Outbound Call Center simulations to evaluate how well applicants work with callers and Chat and Multitasking simulations to assess their ability to assist multiple customers simultaneously.

• Video Response Questions: Some attributes cannot be measured effectively using written assessments. For example, if you are hiring support representatives who help customers with technical problems over the phone, you can use computer skills tests to measure applicants’ digital knowledge and include video response questions to confirm that they can speak English and other required languages clearly, and explain complex topics so customers can understand them.

Get Started with Skills Testing

Skills testing enables HR teams to make data-driven hiring decisions so they can focus on top candidates and quickly move them through their hiring process. It helps businesses reduce recruiting costs and streamline hiring by eliminating hours that the HR team would typically spend reviewing resumes and scheduling interviews.

Do you want to learn how skills testing can help you reduce hiring expenses? Contact us to request a demo.