Finding the right people for the job is difficult. A ManpowerGroup survey found that talent shortages reached a 16-year high in 2022. 75% of companies said they struggle to find the employees they need. Korn Ferry estimates that 85 million jobs will go unfilled by 2030 due to a lack of qualified people.
With such a talent shortage, it’s no surprise that there’s also a shortage of leaders. DDI reports that only 11% of companies have strong leadership.
Strong, capable leaders are essential to any business and not just because of their guiding role. It’s already widely understood that a small portion of the workforce – the high performers – generates the majority of a company’s results. Research has shown that top performers contribute more than twice as much as the average for senior leadership roles.
Focus on potential, not achievements
It is a leader’s job to help an organisation navigate an increasingly uncertain future. Promotions, however, are usually given as rewards for past performance.
It is often assumed that the qualities that have helped someone achieve success so far will continue to do so. If you are familiar with the Peter Principle, which states that employees are promoted based on past achievements until they reach a level beyond their competencies, you’ll know this is a cause for concern.
To recognise good leaders, you need to focus on what they can do, not just what they have done. High-performing employees do not necessarily have leadership skills. Promoting an employee to a leadership position may deprive you of their contribution and leave you with a poor manager.
Companies should also be cautious about relying on the evaluations of their direct line managers. These can be influenced by bias, office politics, and the candidate’s ability to build relationships with their boss.
Promotion based on past performance and the supervisor’s liking for the applicant has other problems. It tends to disadvantage underrepresented groups such as women and people of colour who may not have had the same opportunities to prove themselves as white men. In addition, people inherently have an affinity for their peers, which can reinforce existing representation.
So, what can companies do to identify top leadership talent if these metrics are unreliable?
Objective testing for better appraisals
Innovative companies have been using psychometric tests to recruit talent for years. Psychometric tests evaluate a person’s suitability for a job or company by assessing their values, behaviour, skills, and intelligence. They fall into two broad categories:
- Aptitude tests: these include tests of verbal reasoning, numerical ability, methodical thinking, logic, and error control.
- Occupational tests: these examine a person’s motivation, interests, and values, among other things.
One of the main advantages of psychometric tests is their objectivity. They eliminate biases and personal factors that often influence hiring or promotion decisions.
They also provide a wealth of quantitative data that you can use to compare potential candidates or develop benchmarks.
Leadership psychometric tests
After you have determined that potential rather than past performance should be examined, you need to figure out how to do it. These are some of the key signs of potential that you can test for:
Motivating interests and values
These factors that drive people to stay engaged with the leadership task, which becomes more demanding the higher they rise.
Most companies use an applicant’s career drive as an indicator of potential. Leaders tend to have more ambitious and clear career goals, wanting to take on responsibility and help their colleagues succeed.
Leaders should have a healthy understanding of their skills and the areas in which they need to develop. This helps them recognise when they can trust their judgement and when they should ask others for support.
It is also important for leaders to be aware of their feelings and how they affect their behaviour and interactions with others. This allows for more effective management of self and others.
Preparatory roles and duties
Although past successes do not necessarily indicate future potential, developmental experiences play an important role in preparing leaders for the future. To benefit from these experiences, one must be able to learn from them, gain a new perspective, and improve one’s skills.
Learning from experience
Leaders must be able to learn and apply lessons learned to future challenges continuously. This is more important than ever in today’s rapidly evolving business environment.
Successful leaders do not repeatedly rely on the same tactics but develop and apply novel solutions to new problems. This skill is an important indicator of the ability to handle unforeseen situations and difficulties.
Logic and reasoning
Analytical thinking and problem-solving are desirable traits for almost any employee, especially a leader. However, when considering these traits, it is important to understand that the higher a leader rises in an organisation, the less individual problem solving they will perform. Instead, they will need to help others solve problems. Keep this in mind when testing a leader’s cognitive abilities.
Other things to consider
Psychometric personality and cognitive tests can identify and assess an applicant’s abilities, intelligence, traits, and values. These tests should be used with other assessment measures, especially to distinguish applicants with similar scores.
A common approach is to use psychometric tests to screen potential candidates and then conduct a structured interview with promising candidates. The data obtained through these tests can provide a useful basis for developing questions for such an interview.
Find your top leadership talent
Now that you know the value of psychometric assessments for leadership roles, talk to an expert about how to use them in your talent search. ETC Consult is a psychometrics specialist and applies various assessments to help companies find the most suitable candidate for a position. Contact us to learn how we can help you select the best psychometric test for leadership positions in your company.