Cost Benefits of Using a Psychologist To Assess Job Applicants

Posted by: Dr. Justin D'Arienzo, Psy.D., ABPP

Cost Benefits of Using a Psychologist

To Assess Job Applicants

 Cost Benefits of Using a Psychologist To Assess Job Applicants was written by future Industrial Organizational Psychologist, Brandon Araujo, for the D’Arienzo Psychological Group in July 2014. D’Arienzo Psychological Group is a Jacksonville, Florida based Clinical and Forensic Psychology Practice that is uniquely qualified to assist staffing companies, human resource departments, and small business in providing psychological testing and evaluations to potential employees. D’Arienzo Psychological Group can assist you in selecting the very best employees for the clients you serve or for your business.

Understanding the Cost Benefits of Using a Psychologist To Assess Job Applicants is crucial. Jorgen Sundberg, a well-known recruiter, calculated the cost of hiring the wrong applicant for a second-level manager position is approximately $840,000. This includes the costs of hiring, compensation (based on a $62K salary), maintaining the employee, severance, mistakes, failures, and missed business opportunities. Management Research News states that employee turnover can cost up to a third of an employee’s salary. This means that if a company hires the wrong employee who earns an annual salary of $70,000 (the average in America) it will cost them $21,000, a loss which is unrecoverable. With these extremely high costs and a national turnover rate of 15.1 percent, the accuracy of an employer’s hiring process is one of the most influential aspects of their organization’s success.

The introduction of an industrial organizational psychologist, also commonly referred to as a “business psychologist” into the hiring process can help increase the process’s effectiveness, efficiency, and accuracy by implementing research-oriented techniques to assess an applicant’s personality, leadership, prudence, ambition, cognitive abilities, etc. By doing this psychologists are able to select the best candidate for a job, this decreases a company’s turnover rate, thus lowering the company’s risk of experiencing significant losses. One study conducted by Mark Huselid, which evaluated nearly a thousand firms found that the practices psychologists implement “have an economically and statistically significant impact on both intermediate employee outcomes (turnover and productivity) and short- and long-term measures of corporate financial performance.” It is common for companies to overlook the use of a psychologist as a frivolous expenditure; however, these crucial benefits, that have a very strong influence on a company’s success, far outweigh the cost of hiring a psychologist to assist with employee selection.

 

Please contact D’Arienzo Psychological Group if you have questions about how we can assist you with employee psychological testing, interviewing techniques, or our business psychological services. We can be reached at 904-379-8094 or you can find us on the web at drdarienzo.com.