Great Lakes Wire

As the focus shifts away from degrees and formal education in job requirements, employers are increasingly turning to skill-based hiring. This change is largely due to "job requirement inflation," which has led employers to prioritize specific skills over traditional educational qualifications. By doing so, they aim to expand the pool of potential candidates and increase diversity among applicants.

Statistics from the U.S. Census Bureau indicate that nearly two-thirds of working-age individuals do not hold a bachelor's degree, while more than half lack an associate's degree. With rising costs associated with higher education and Generation Z questioning the value of advanced degrees due to debt concerns, companies are exploring alternative methods for workforce development. One such method gaining traction is apprenticeships modeled after Swiss or German systems, which require long-term commitments but can apply to various job types beyond blue-collar roles.

To identify suitable candidates for these new approaches, employers are reintroducing assessments as a tool for evaluating potential hires. These assessments must comply with the Uniform Guidelines on Employee Selection Procedures (UGESP), established by the EEOC in 1978. The guidelines ensure that tests do not disproportionately exclude individuals based on race, color, religion, sex, or national origin unless validated according to federal law.

Common assessment types include cognitive tests assessing reasoning and memory; physical ability tests measuring strength and stamina; sample job tasks evaluating performance on specific duties; and personality tests predicting traits like dependability or likelihood of misconduct.

Test providers often claim full validation of their assessments; however, true validation typically shows a correlation between .2 and .4. Validations should occur within five years for relevant demographics by race or gender and location.

Validation types include construct validity (measuring intended concepts), content validity (representing what it aims to measure), face validity (suitability of test content), and criterion validity (accuracy in measuring outcomes). Off-the-shelf tests should undergo portability testing to confirm relevance across different jobs.

A significant risk arises when hiring managers create unvalidated tests without HR oversight. Such actions could lead to legal liability if challenged in court. Therefore, HR departments must inventory all testing tools used internally or externally, ensuring their validation while monitoring demographic data for adverse impacts.

Anthony Kaylin reports this information courtesy of SBAM-approved partner ASE.