What is Skill Assessment? Definition, Time to Use, and Types

Post-COVID-19, the world has seen significant changes in the hiring landscape. The unemployment rate increases, but the hurdle for companies to find competent employees also increases. Such, 87% of companies

I believe it is not a matter of lack of talent. In the US, there are more than 6.12 million

A poll done by LHH on LinkedIn shows that 36% of companies found it hard to attract the talent themselves. What’s more, when their company is in a talent shortage, rushed employment contracts are often signed. Troubles like high turnover rates, wasted resources, lost competitive-skilled potential persona, lost productivity, and myriad others are expected to occur.

Nonetheless, in a talent shortage situation, prompt action is a must. Thus, experts and scientists alike have come up with a data-driven recruitment strategy:

What is Skill Assessment?

Skill assessment is the comparison of the actual performance of a skill with the specified standard for the performance of that skill under the circumstances specified by the standard, and the evaluation of whether the performance meets or exceeds the requirements. 

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Unlike traditional hiring methods that rely solely on resumes and interviews, skill assessment provides a data-driven approach to candidate evaluation, offering objective insights that transcend subjective biases. This assessment is also a fool-proof short pass that cuts the traditional 44-day

When is Skill Assessment Used by Companies?

With its very nature to quantify abstract skills into a set of fixed and easy-to-analyze numbers, skill assessment is used not only to test potential employees but also current-working employees. Even Though, it is more prevalent for getting new employees onboard. Here is a more detailed explanation of when and why TA and HR might use it:

1. Initial Screening: In determining whether a candidate has the qualifications and mastery to fill the role, skill assessment tests are often used by companies.
2. Validation of Skills: Skill assessment allows individuals to identify, document, assess, and certify their skills. Thus, it will bode well for both the company and the potential itself.
3. Identifying Potential 4 : Noting down an employee’s future prospects is a matter of importance. Thus, beyond testing potential candidates, skill assessment is also used to evaluate whether a current employee is worth nurturing for the company's future endeavors.
4. Continuous Improvement: By providing employees with regular feedback and opportunities to do skill assessment tests, companies can tailor better types of training for their employees. Thus, better output is expected.

Types of Skill Assessment and Its Examples

Every component contributes to a distinct narrative, shedding light on candidates' abilities and latent potential. To decipher the intricacies of talent acquisition, employers harness a variety of assessment tools, revealing the most promising talents capable of driving organizational advancement. Whether evaluating programming proficiency, technical skill, or interpersonal sensitivity, there are special assessments for it all. Here are 5 of the most commonly used tests by US companies.

1. Technical Assessments

Technical assessment is used to see whether a candidate does have an advanced skill as per their CV or claims. It is one of the most used practical skills assessments, as it is easy to conduct and reported to be effective. 

Example: Excel Challenges

Advanced Excel skills assessment includes testing the candidate's ability to produce graphs and tables, use spreadsheets efficiently, and perform calculations and automation to process large volumes of data. 

1. Cognitive Ability Tests

Brains over brawn – in the quest for top talent, cognitive ability tests serve as the litmus test for mental agility, critical thinking, and problem-solving prowess. Cognitive ability test, is such tests that pose questions designed to estimate applicants' potential in solving work-related problems or to acquire new job knowledge. 

Example: Verbal Comprehension Tests

It is a test that is supported by giving the candidate a passage to be read a limited number of times. Then this candidate will pose several questions relevant to the information obtained from the text that they had just read. This assessment is done to assess a candidate’s ability to read (collect), understand, and analyze data in a short amount of time.

1. Behavioral Assessments

Behavioral assessments help HR and TA understand candidates’ subtle interplay of personality traits and cultural fit. This test includes observing the behavior and conduct, which may be done in real-time, or through the use of a questionnaire. This test is suitable if you want to know whether the candidate suits the company's ethos of conduct.

Example: Situational Judgment Tests (SJT)

Also called situational stress test, is a type of psychological test that presents the candidates with realistic and hypothetical scenarios for them to identify. What will be the most appropriate response or effective action for those certain scenarios they read. 

This test shed light on how candidates might respond in real-world situations, assessing their judgment, problem-solving ability, and interpersonal skills.

1. Simulation Exercises

Theatricality meets reality – simulation exercises plunge candidates into simulated environments, mirroring the challenges they'll face on the job. As per WHO explained, this test is done to “validate and enhance preparedness and response plans, procedures and systems for all hazards and capabilities.” 

In terms of the hiring process, this “environment” is to be tailored for the position they want to fill. From crisis management simulations to writing a blog under the writing block, these exercises are expected to show how the candidates thrive under pressure.

Example: Role-Playing Exercises

The prospective talents are given explanations over situations that may occur when they sit in the enlisted role (e.g., handling customers' complaints). This type of test allows candidates and current employees to assess communication skills, empathy, and adaptability in real time.

1. Personality Assessment

According to APA

While technical expertise may facilitate initial opportunities, it is often the demonstration of soft skills that ultimately determines success. However, evaluating attributes such as communication, teamwork, and leadership presents a formidable challenge. Thus, to measure various aspects of someone's personality and behaviors, personality and what is personality are made.

Example: Myers-Briggs Type Indicator

The MBTI serves as a notable example of a personality assessment tool. It classifies individuals into one of 16 distinct personality types based on their preferences across four primary dimensions. While acknowledging its limitations as a definitive measure of personality, the MBTI is proven

Conclusion

For you HR and TA that want to stay upfront and in the hiring arena, skill assessments test is a must. As it is not mere checkboxes; it is the very culmination that countless experts pour their focus into hence the unemployment rate decreases and economic output increases.

Footnotes:

1. McKinsey & Company. (2021). Mind the skills gap. 

2. Statista. (2024). Seasonally adjusted monthly number of unemployed persons in the USA (2022-2024). 

3. Bersin, J. (2023.). Time to hire benchmark factbook

4. Society for Human Resource Management. (2018). Predictive assessments give companies insight into candidates' potential. 

5. American Psychological Association. (2011). Personality assessment

6. Coulacoglou, C., & Saklofske, D. H. (2017).