Question: I hired several temporary seasonal workers, and based on prior experience expect some will not perform well.  I am considering using a testing service to help with future hiring, but I have heard asking the wrong questions can get you in trouble.  Are personality tests a legal way to improve hiring practices?
Answer: Including personality tests or other algorithm-assisted evaluations in the hiring process is becoming very popular.  Such tests can be valuable in assisting in the selection of candidates, particularly in fields with high turnover or for seasonal employees.  It is estimated that the $500 million annual workplace personality testing business is growing at 10-15% per year.  It is believed that the use of such testing has nearly doubled in the last five years, and is now used in approximately 60% of hiring decisions.
However, you rightly note that there are legal compliance issues with utilizing such testing.  Personality testing can seem like a harmless way to increase the quality of candidates selected for interviews.  Yet the questions asked in some tests raise concerns of discriminatory impact, including race and disability discrimination.
For example, studies have shown that for certain jobs, workers with shorter commutes have lower turnover.  But, employers must be cautious in asking applicants whether they live near the jobsite, as such questions can exclude individuals from particular socio-economic groups.
Another concern with such testing is whether it screens out candidates with mental illness disabilities, who would otherwise be qualified for employment.  Questions related to mood, in particular, have been alleged to screen out individuals with bi-polar disorder or depression.  The legal impact of such questioning remains unclear, though the EEOC has investigated several companies’ pre-employment testing practices to determine if they have a discriminatory impact.  The EEOC’s guidance to employers on the use of personality testing notes that while testing companies may provide documentation supporting the validity of their tests, the ultimate responsibility for ensuring the tests are not discriminatory rests with each employer.
Despite such concerns, the popularity of pre-employment testing continues to grow, and there are several best practices that should be followed when considering whether to institute such testing.  Testing must be job-related and its results appropriate for the employer’s purpose.  For example, if your company’s primary goal is reducing turnover, it will need to test for different metrics than if the primary goal is customer satisfaction.  Test results must provide the employer with useful and appropriate information or scores specifically related to the job skills required.  Further, if it turns out that a test has the effect of screening out or limiting a protected group, the employer should determine whether there are any other means of testing that could be equally predictive of job performance without disproportionately excluding the protected group.
In evaluating whether to utilize a pre-employment test, employers should seek tests that are reliable (applicants get the same result when taking the test multiple times), that have demonstrable predictive value, and which seek to measure stable personality traits as opposed to those that ask about mood.  There are many tests available, with a variety of potential benefits, as well as many potential risks.