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Do Retail Pre-Employment Assessment Tests Minimize Turnover?

High turnover, including voluntary separations, has always been an issue in retail. Recent retail industry trends show turnover increased in 2016 as well. A Korn Ferry Hay Group survey of top retailers found that hourly store workers had a 65 percent turnover rate in 2016, up from 57 percent in 2015. That means that in the retail and food service sectors, two out of three hourly workers will be gone in a year, and the costs in terms of recruiting, hiring, and training can be enormous.

Forward-looking loss prevention and human resources leaders are always looking for ways to improve employee selection to both improve performance and minimize internal deviance. Thus, more and more companies are now using retail pre-employment assessment tests and background checks to help predict which applicants are more likely to succeed—and which ones to avoid.

According to the Wall Street Journal, the number of large US employers using pre-employment assessments has more than doubled in the past fifteen years. “Eight of the top ten US private employers now administer pre-hire tests in their job applications for some positions,” the publication reported in a 2015 article.

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Retail Pre-employment Assessment Tests Can Lower Turnover

According to an Aberdeen Group study, businesses that use pre-employment assessments experience 39 percent lower turnover among high-potential employees.

While hundreds of specialized assessments are now available, the most widely used and effective pre-hire assessments fall into three basic families, explained industry veteran Jim Plotkin, president and CEO of The Plotkin Group. “Integrity tests, cognitive ability assessments, and personality questionnaires have been used for decades, and refined to be even more effective.”

As for the high turnover rates, Plotkin noted that most job separations today are voluntary, perhaps indicating the change from a baby boomer to a millennial-based workforce. “Employees often quit their bosses, so it’s important to develop managers who can keep their people happy. You need to provide them with good coaching and training tools.”

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Four Powerful Predictions

Based on his experience and observations in the retail loss prevention and human services sector, Plotkin made the following predictions:

1. Human resources will become much more data-driven, with psychometric instruments playing a larger role.

2. More HR and LP leaders will use pre-hire integrity tests designed to screen for counterproductive behavior like absenteeism and employee theft of all types.

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3. For final selection and placement, more employers will use cognitive ability tests, combined with personality questionnaires, to improve job fit and retention.

4. Coaching and development tools will be used in greater numbers to help managers become better bosses, and help increase retention of their direct reports.

This post was originally published in 2017 and was updated July 23, 2018. 

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