Shawn Taylor, in his article Mismatching workers, jobs a costly mistake, (free registration required) has an astounding US statistic: employers lose a total of $105 billion a year by failing to recognize the talent that's in front of their face. That's a lot of money. Taylor's article goes on to discuss the usage of tests to match candidates with jobs. I asked about the tests, and he said the tests identify core competencies and assess soft skills, such as personality tests.

I don't recommend personality testing. Personality testing provides an indication of preference for a particular kind of behavior, not the only behaviors a person can choose to use. And, based on personal experience, not the behaviors people necessarily exhibit at work. And, I think you can use behavior-description questions to determine cultural fit better than a test does.I'm not aware of standardized tests that adequately test technical competencies. But I know just what will test technical fit: auditions. See these links about auditions:

Candidates, if you're faced with a test, offer to also perform an audition. You can even say something like this: “I'm glad to see that you think cultural fit is so important that I'm taking this test (or assessment). Can I also showcase my technical skills for you by performing an audition?” (See Faced With a Riddle or a Puzzle: Offer Problem Solving or an Audition.)

Matching candidates to jobs is important. As a hiring manager, it's your most important decision. Even if you find test useful, don't solely rely on them. Also consider which kinds of auditions and which kinds of questions you'll use when phone-screening and interviewing.

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