Leadership potential depends on qualities that can be quantified and measured, and it makes sense to employ tools that test for these qualities consistently, objectively, and fairly. Psychometric testing is a crucial asset in this regard writes Stephen Shortt, Managing Director ETC Consult.

Today’s businesses and organisations across the board face momentous social and economic changes. Even before COVID-19 completely upended working practices and financial models, the pressing challenges and opportunities of digital transformation were beating down the door.

The pandemic has created new trends while magnifying and accelerating others. Digital capabilities are now essential to most businesses while the power dynamic between employees and employers has shifted considerably. The spotlight is shining on environmental, social, and governance issues more brightly than ever, as society re-evaluates the roles and responsibilities of corporations. And the grim realities of climate change can no longer be ignored.

As we head into a future that seems less certain than ever before, the world needs leaders, at every level of business and society, who are capable, motivated, creative, and honest.

Poor leadership results in reduced employee engagement, loyalty, and productivity. It also increases staff turnover, which has reached historic highs as the Great Resignation sweeps across the globe. MIT Sloan found that the top predictor of employee attrition during this period is toxic corporate culture, which includes: workers feeling disrespected; inadequate diversity, equity, or inclusion focus; and unethical behaviour. Failure to recognise employee performance was another key indicator.

Emergent vs effective leadership

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Emergent leaders are those people who naturally become leaders because of how they behave in group situations. This is typically understood as being in contrast to assigned leaders, who are appointed to formal leadership positions in their companies. A quick internet search on emergent leadership reveals a host of articles on the importance of recognising emergent leaders and assigning them to formal leadership positions.

There may be truth to this, and it’s certainly important to take note of people who naturally assume leadership roles in group interactions. However, it’s also important to discern between people who are good leaders and those who merely look the part. That’s because emergent leaders are often those with interpersonal savvy, charisma, self-promotion skills, and political shrewdness – qualities that win the favour of others and get them noticed.

While these traits can certainly form part of the make-up of a good leader and help people climb the corporate ladder, there are more important skills they’ll need to manage effectively. These include the ability to cultivate talent, lead engaged and productive teams, and drive business results. The problem is that employees with these skills don’t automatically have the extroverted nature of emergent leaders, which is why it’s important that organisations adopt a rounded and objective view of their talent. By doing so, they can spot the staff making a real difference and help them grow, nurturing their existing talents while developing the skills they lack.

The advantages of using psychometrics to identify candidates

It’s becoming broadly accepted that hiring based on objective standards is preferable to hiring based on subjective appraisals such as gut feel or personal bias. Making hiring decisions based on quantitative data results in better business outcomes because it enables managers to better compare candidates.

Because these tests are objective and impersonal, they also help to reduce the bias inherent in old-fashioned hiring practices, in turn fostering greater diversity, equity, and inclusion (DEI) in the workplace. While this is a worthy cause in itself, essential to creating a fair and equitable society, it also has a multiplier effect for businesses seeking top talent. Half the hiring managers polled in a report said that job seekers had asked about DEI initiatives, while 44% reported candidates rejecting an interview or offer because of a lack of workplace diversity.

Psychometric tests have the advantage of being standardised, assuring candidates that the hiring process is fair. This goes a long way towards creating a positive experience for prospective employees. Unsuccessful candidates who walk away from a positive recruitment experience may be willing to interview for future positions, effectively broadening your talent pool. They may even act as brand advocates.

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