July, 2010

SHL Clients: Demonstrating the Positive
Impact of Assessment on Business Performance
While assessments have been a critical part of the talent management
landscape for some time, the ways organizations go about using them has
been evolving. SHL, a player in the assessments space since 1977, has also
evolved as the industry has experienced pressure to create a more holistic
view of talent, expanding the use of assessments from a pre-hire HR activity
to a valuable tool used throughout the organization and the employee
lifecycle. In Aberdeen's March 2010 study Talent Assessment Strategies, over
250 organizations currently using assessments were studied, including 74
organizations using SHL solutions. This Research Brief will look at how
users of SHL assessments are performing in three key areas - extending theuse of assessments into the post-hire, providing managers with actionableassessment output, and making better entry-level hiring decisions.

Research Brief
Aberdeen’s Research Briefs
provide a detailed explorationof a key finding from a primaryresearch study, including key
performance indicators,
Best-in-Class insight, andvendor insight.

Assessments Throughout the Lifecycle
The past few years have seen several shifts in the use of assessments organizations are using assessments in new ways, and are integratingassessments data throughout talent management systems to make better
talent decisions. In both 2009 and 2010, respondents to our surveys
indicated that increased business competition and skill shortages were the
top two pressures driving them to pursue a talent assessment strategy. To
combat these perennial pressures, assessments are being viewed as having
an impact well beyond just hiring decisions (Figure 1).
Figure 1: Goals for the Use of Assessments

Percentage of respondents, n=264

75%

69%
63%

46%

50%

"For an assessment strategy totake off, it needs management
commitment, competency level
definitions, and valid andreliable assessment tools."~ Lara Kenchington, Manager,
HR Development /Organizational Development,
Areva Resources,
Southern Africa

25%

0%
Improving quality of hire

Identifying high-potential
talentIdentifying skill / competency
gaps for each job role

Source: Aberdeen Group, June 2010

© 2010 Aberdeen Group.
www.aberdeen.com

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SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 2

Assessments have long been viewed as a tool for pre-hire decision making,but an increasing number of organizations are using them as guidance atmultiple points in a career. This shift in emphasis has lead organizations tolook at how assessment tools are used throughout the employee lifecycle.
However, this broader use of assessments requires increased consistency inthe qualities or skills that are being assessed. Building or acquiring acompetency framework to assess against was the top strategy identified byorganizations to achieve their assessment goals. And in Aberdeen's
November 2009 look at Competency Management, it was discovered that
Best-in-Class organizations not only utilize competency frameworks against
multiple aspects of talent management, but that those using a consistentcompetency model across talent acquisition, learning, performance
management and succession processes are five times as likely to achieve
Best-in-Class performance as those that do not. This need to consistently
apply an assessment strategy, and integrate the results of assessments acrosstalent processes is clearly demonstrated by Best-in-Class organizations(Figure 2).

Fast Facts√ Organizations integrating
their competency frameworkacross the entire talent
lifecycle are 5 times as
likely to achieve Best-inClass performance

Figure 2: Assessments Integrated with TalentManagement Processes
Best-in-Class Criteria
Percentage of respondents, n=264

100%

Best-in-ClassAll Others

92%
85%

79%

74%

75%

72%

69%

64%

61%

56%

50%
38%

The following key
performance indicators wereused to determine the Bestin-Class for use of
assessments, with top
performers achieving
impressive results:√ 84% of employees received
rating of “exceed” on last
performance review

25%

0%Recruitment

Onboarding

Performance
management

Succession
planning

Learning

Source: Aberdeen Group, June 2010

While top performing companies still do integrate assessments in the prehire, they are more likely to use them at all other points in the talentmanagement lifecycle. Clearly, the consistent use of assessments in the preand post-hire is a growing trend, and for good reason as the next section
will demonstrate.

Consistency is King
Regardless of the source of assessments, using them consistently is criticalto achieving maximum benefit. As Figure 3 shows, using assessments in both
© 2010 Aberdeen Group.
www.aberdeen.com√ 81% of key positions haveat least one willing andable successor identified√ 33% year-over-year
improvement in hiring
manager satisfaction
Best-in-Class: top 20% of
aggregate performance
scorers
Industry Average: middle 50%
of aggregate performance
scorers
Laggards: bottom 30% of
aggregate performance
scorers
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SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 3the pre- and post-hire versus in the pre-hire alone results in increased
performance on several key metrics. And SHL's clients are reaping thebenefits of this shift in focus as well. Figure 3 compares those using
assessments in the pre-hire stages only, as well as those using both pre- andpost-hire assessments, to their peers that have partnered with SHL.
Figure 3: Performance on Key Metrics
100%
84%
76%

90%
78%

75%

85%
74% 76% 72%

Pre-hire only
SHL Pre-hirePre- and post-hire
SHL pre- and post-hire

Fast Facts
Compared to organizations
using other solutions, SHL
customers using assessmentsin the pre- and post-hire
are seeing:√ 15% greater performance infirst year retention√ 18% greater new-hireperformance√ 33% greater improvement in
hiring manager satisfaction

50%
28%
25%

18% 19%21%

0%First year retention

New -hire performance

Change in hiring manager
satisfaction

Source: Aberdeen Group, June 2010

It is interesting to note that even in pre-hire metrics, performance isimproved when the organization has committed to a strategy that includes
the use of assessments in both the pre- and post-hire. And the results areeven better for SHL users implementing assessments across the talent
lifecycle. SHL customers using assessments in the pre- and post-hire areseeing 15% greater performance in first year retention, 18% greater newhire performance, and a 33% greater improvement in hiring manager
satisfaction versus organizations using other solutions. These results send an
important message to anyone looking to impact metrics usually associatedwith hiring and onboarding through the use of assessments in the pre-hire.
While first year retention, new-hire performance (defined as theachievement of first performance milestones within agreed-to timeframes)
are often rolled into quality of hire metric reporting, performance in all ofthese areas is improved if the assessment culture is continued beyond thehiring process.
Even more importantly to managers and leaders is the impact the use of
SHL assessments across the employee lifecycle is having on profit andrevenue. Using SHL assessments in the pre-hire only is having a positive
impact on financial performance (measured as change over the previous 12
months), but when used in both the pre- and post-hire the improvement isdramatic (Figure 4).

© 2010 Aberdeen Group.
www.aberdeen.com

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SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 4

Figure 4: Performance on Key Metrics
Fast Facts

15%

SHL Pre-hire
SHL pre- and post-hire

12%

11%
10%

SHL customers (compared toorganizations using assessmentsin the pre-hire only) using
assessments in both the preand post hire saw:
√ Six-times greater increase
in revenue per FTE√ Eleven-times greater
increase in profit per FTE

5%
2%
1%
0%
Increase in revenue per FTE

Increase in profit per FTE

Source: Aberdeen Group, June 2010

Managers Take the Lead
Obviously, simply purchasing and implementing an assessment solution in
and of itself will not result in improved performance. Like any tool ortechnology solution, the context in which that tool is used has a great
impact on the results attained. Given the performance levels achieved by
SHL's clients, it makes sense that the capabilities in place to support the useof assessments are differentiated.
As a whole, SHL clients are 31% more likely than non-SHL clients to have inplace one key capability: the clear and regular communication of assessment
results to managers. With 88% of SHL clients citing this capability, it is themost commonly found capability among this subgroup, and it sets the tone
for how assessments are viewed within the organization. Those that view
assessments as a tool to be used by managers to make real time decisions
that will impact the business and allow them to employees in front of theright customers armed with the right skills, behaviors, aptitudes
competencies and information are going to achieve better results. And
when we break down the top capabilities among organizations utilizing
assessments in the pre-hire only versus pre-and post, the contrast is evenmore striking (Figure 5). Clearly, integrating the use of assessments into thepre- and the post-hire is emerging as a best practice for all organizations.

© 2010 Aberdeen Group.
www.aberdeen.com

Fast Facts√ SHL customers are 31%
more likely than all otherorganizations to have inplace a process to clearlycommunicate assessment
results to managers

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SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 5Figure 5: Capabilities Supporting Performance
100%

93%
81%

76%

75%

76%

79%

SHL Pre-hirePre- and post-hire
SHL pre- and post-hire

63%
45% 45%

50%
27%
25%

0%
Assessment results clearlycommunicated to managers

Support for assessmentsfrom managers

Career progression
milestones are identified anddocumented

Source: Aberdeen Group, June 2010

Putting the results of assessments into the hands of managers is critical tohelp drive performance for organizations. And these same companies thatare getting assessment results into the hands of managers are also getting
greater buy-in for the overall assessments strategy. SHL clients using
assessments in the pre- and post-hire are 25% more likely to support theassessment strategy than those using them in the pre-hire only. This makes
sense because the more managers realize that assessments can help guidedecision making, the more supportive they will be of their use.

Fast Facts√ SHL customers using
assessments in the pre andpost-hire are 25% more
likely to have manager buyin and support for theirassessments strategy

The last differentiated capability was the definition of career progression
milestones and metrics. This capability is linked to the previous discussion ofdefining competencies. When there is a clear picture of what is required,both at an organizational level and for individual job roles, it is much easier
to assess against those criteria. In many organizations, job descriptions andrequirements for entering the organization have been made clear. But for anindividual wishing to progress their career or a manager wanting to help
coach someone along to take on a new role, the next steps can often beless clear. When career paths are laid out, assessments can be used at anindividual level to test for readiness, to help gauge potential, and to help an
employee plan their development to get to the next level. This type ofclarity on what will be required can also help mine existing talent pools for
untapped aptitudes and competencies to make better decisions aboutcareer progression for both the individual and the organization. And for amanager, laying the results of assessments against the picture of what theyneed to move the organization forward can help them identify critical gaps
and maximize existing talent.
In addition to these capabilities, several differences were seen in theenabling tools and technologies that SHL customers were using to support
their success through assessments. The most differentiated tools are all
around competencies and gap assessment. As illustrated in Figure 6, the© 2010 Aberdeen Group.
www.aberdeen.com

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SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 6ability to use assessments to support the development of the skills,
capabilities and knowledge required of the business is a key driverof success.
Figure 6: Enablers Supporting Performance

Percentage of respondents, n=264

75%

SHL Pre-hire
SHL Pre- and post-hire

61%

50%

48%

46%

31%

Fast Facts√ 88% of organizations using
SHL assessments ensure thatassessment results areclearly communicated to
managers, compared to 81%
of the Best-in-Class and just
67% of users of otherassessment solutions

25%

0%
Competency model libraries

Competency gap analysis tools

Source: Aberdeen Group, June 2010

In embarking on an assessments initiative, it is important to remember thecritical role of the manager when evaluating the user experience, the typesof reporting, and how the solution fits in with the rest of the talentmanagement processes and solutions already in place. The number one
criteria cited by Best-in-Class companies for assessment vendor selection
was the ability to integrate with other HR and talent management software,a key feature of SHL's value proposition for it's users. And, as mentioned,
currently 88% of organizations using SHL assessments ensure thatassessment results are clearly communicated to managers, compared to
81% of the Best-in-Class and just 67% of users of other assessment
solutions. Having tools that are integrated with existing talent management
software, designed to be used by managers, and that deliver clear, actionable
results to the line is a critical capability, and one that SHL is addressing for
its customers. This mindset is also driving performance improvement on
both quality of hire and succession benchstrength (defined as the percentage
of key roles for which one or more successor has been identified) metrics(Figure 7).

© 2010 Aberdeen Group.
www.aberdeen.com“Quick and easy-to-interpret
reports enable interview panels
across our operations to
consistently ask the right typeof questions to ensure we get
the very best candidates who
possess the relevant key Oxfam
GB behaviors. Furthermore, wehave seen a consistentimprovement in the quality ofcandidates hired.”~ David Benson, Head of
Talent at Oxfam GB, an SHL
User

Telephone: 617 854 5200
Fax: 617 723 7897

SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 7

Figure 7: Performance of Companies with User Friendly Output

Percentage of respondents, n=264

100%
86%

82%

Assessments usable bymanagers

80%

Not in place

73%

75%

61%
47%

50%

21%

25%

14%

0%
New -hire retention

New -hire
performance

Succession
benchstrength

Change in hiring
manager satisfaction

Source: Aberdeen Group, June 2010

Case in Point
The case study below of one SHL client illustrates how one globalorganization took its assessments strategy from pre- to post-hire, andcreated a new culture of feedback and assessment. Their story
demonstrates how they built internal demand for expanded use of
assessment tools by first demonstrating the benefits to a core group of
managers, and helping them improve the business.
Metso is a global supplier of technology and services for the mining,
construction, power generation, oil and gas, recycling, and pulp and paperindustries. With over 27,000 employees in over 50 countries worldwide,
Metso is a major player in three primary market segments: mining andconstruction technology, energy and environmental technology, and paperand fiber technology. From its home base in Finland, the company iscommitted to the strategic priorities of sustaining profitable growth overthe long term, and on improving competitiveness and cash flow in the
short term.
Even among other organizations of its size, Metso faces some uniquechallenges that come as a result of its company origins. The business wasfounded in 1999 with the merger of two existing Finnish companies. This
confluence of cultures, having occurred so recently, made it difficult for
Metso to establish a cultural identity of its own. This became a top priority
for the company, which knew that a business spread out over such a variety
of services and over such a wide geographical distribution would need astrong performance-oriented culture. One of the big ways in which this was
accomplished was through the use of talent management assessments.

“Where at first our recruiters
felt fear at using pre-hireassessments, now they feel
more and more pride in theirprofessionalism, and know thatthey have the tools to help
hiring managers make quick,efficient and effective
hiring decisions."~ Hilkka Alatalo-Korpi,
SVP of Talent Management,
Metso, an SHL User

The assessments strategy that Metso laid out, in partnership with SHL, took
a two-pronged approach, the first being on the pre-hire side. This was© 2010 Aberdeen Group.
www.aberdeen.com

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SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 8essential for the company because, in order to establish a common culture,
Metso needed to make sure it was attracting people with a common set of
traits that fit with organizational goals. And the company also wanted toensure that it was hiring people with the right skills to achieve top
performance. This pre-hire assessment process aligns with Metso’s
competency model to help create a more scientific view of each candidate
and inform hiring decisions that will strengthen quality of hire. By startingwith a small group, Metso was able to develop several internal proof points
and make the case to all of their recruiters and hiring managers on theimportance of pre-hire assessments. “Where at first our recruiters felt fearat using pre-hire assessments, now they feel more and more pride in theirprofessionalism, and know that they have the tools to help hiring managers
make quick, efficient and effective hiring decisions,” said Hilkka AlataloKorpi, Senior Vice President of Talent Management at Metso.
Despite early success in the pre-hire stage, the process of implementing a
post-hire assessments strategy proved somewhat of a challenge. Metso has
never been feedback oriented, but there had always been hunger within theorganization for feedback. According to Alatalo-Korpi, “At Metso, any
feedback is like a gift, so by focusing on creating a new culture of feedback
through the use of 360 we began to build traction.” Knowing that failure tolaunch, and dismissal of 360 assessments and feedback as a “flavor of themonth” was a very real threat, the company decided to take it slow andonce again rely on the support of internal champions. The process started
with a contained launch, implementing 360-degree assessments for a small
group of middle managers who latched on to the feedback not only as a tool
to help them focus their own development, but as a tool to help them havebetter conversations with their teams. The group that had been selected forthe first assessment rollout became champions for the process and started
sharing their experience with others. In just a short amount of time it wentfrom a highly contained and risky venture to a fully-adopted, fully-supported,and mandatory company process. Metso also has a core group of people
who are thoroughly trained to provide 360 feedback that are helping tobuild assessments into the entire talent management process. “Whenpeople go through a 360, they need to know what to do next. Assessments
are becoming a bigger and bigger part of the development process evaluating our talent pipeline, and how we identify new and high-potential
talent,” said Alatalo-Korpi.

“At Metso, any feedback is likea gift, so by focusing on creatinga new culture of feedback
through the use of the 360 webegan to build traction."~ Hilkka Alatalo-Korpi,
SVP of Talent Management,
Metso, an SHL user

The payoff from Metso’s assessment process has already been significant,both from the pre- and post-hire standpoint, even while the process is still
maturing. From the pre-hire side, multiple teams reported satisfaction withthe fact that they were able to make the interview process more efficientand minimize risk by taking a more scientific approach to selecting the rightcandidate. From the post-hire standpoint, by integrating assessments withthe company performance management process, Metso was able to achievemeasurable gains in employee performance. Perhaps more importantly,
though, the company was able to make incredible progress in building thecultural identity it was looking for – one that actively engages in© 2010 Aberdeen Group.
www.aberdeen.com

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SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 9development and feedback, fosters high performance, and makes it possible
to achieve faster and more sustainable growth.

Selection for all Levels
Even though the value of assessments throughout an employee's relationshipwith an organization has been clearly demonstrated, it's also important tothink about selection assessments for all levels of employees joining theorganization. While the use of assessments has evolved, the pre-hireassessment process is still extremely important to getting performance off
to a good start. Among all respondents to the March 2010 study on
Assessments, 77% indicated that the use of pre-hire assessments for entrylevel hires, making it the area where pre-hire assessments were most widelyused. And SHL customers are dominating in this space. While thepercentage of organizations using assessments for entry-level applicants
jumps to 88% among Best-in-Class companies, 92% of SHL clients areassessing this critical group of candidates. This use of assessments at thestart of a career is important because when someone is coming into anorganization with little experience, their assessment results can help validate
their capabilities, and can even inform steps to close any necessary gaps.
Clients using SHL pre-hire assessments for the hiring of this important andoften largest group of candidates are seeing a positive impact on the results
achieved by those new hires as a result (Figure 8).
Figure 8: Performance Impact of Assessing Entry-Level Hires
Fast Facts
Percentage of respondents, n=264

100%
86%

SHL Clients
82%

75%

Non-SHL Clients
64%
55%

50%
25%
25%

17%

√ 92% of SHL clients areassessing entry-levelcandidates, compared to
88% of Best-in-Class√ SHL users are demonstrating
a 47% greater
improvement in hiring
manager satisfaction by using
assessments for entry-level0%First year retention

Succession benchstrength

Change in hiring manager
satisfaction

Source: Aberdeen Group, June 2010

The impact that a strong assessment process for entry-level hires has on
succession benchstrength is important to note. SHL clients are 16% more
likely to have successors in place when assessments have been used at the
ground level of hiring efforts. Particularly given the shortages of key talentand critical skills highlighted at the beginning of this report, this is a powerfulfinding. By hiring the right people at the beginning of their career, who can© 2010 Aberdeen Group.
www.aberdeen.com

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SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 10not only be successful in the short term, but lay the foundation to grow inthe long term is critical to combat these skill shortages. In addition, SHL
users are showing a 47% greater improvement in hiring manager satisfaction
by using assessments at the entry-level. Truly, hiring, development andperformance can not be looked at in a vacuum. They are closelyinterrelated, and the assessments used to evaluate individuals along that
continuum must be as well.

Key Insights
Utilizing assessments to not only select the right people, but to develop andmonitor performance throughout the life cycle is critical. Maintaining aconsistent assessment strategy and a consistent set of competencies against
which to perform these assessments is important as well. Aberdeen's
research has shown that organizations executing on this idea areoutperforming those who don’t, but it has also show that organizations
using SHL solutions to do so are outperforming those organizations using
assessments from other sources. In the use of assessments across both thepre- and post-hire, the involvement of managers through accessible andactionable output, and in screening entry-level hires, SHL users were
demonstrating performance levels above the rest of the crowd. The
solutions offered by SHL are connecting the dots for organizations
throughout the employee lifecycle, and driving performance results.

Fast Facts√ The ability to integrateassessments with existing HR
or talent management solutions
was the top vendor selection
criteria identified by Best-inClass organizations

When it comes to evaluating assessment solutions and providers, Aberdeen
found that Best-in-Class organizations are mostly concerned about thesolution's ability to integrate with existing systems. Whereas organizations
that are not the Best-in-Class place the highest value on price, top
performers rank it a somewhat distant fourth. The data also found that aprovider's ability to work with the end-user organization to build a businesscase and establish metrics or pain points is also a key factor in the decision
making process.
Percent of organizations, n =264

Figure 9: Solution Selection Criteria
60%
50%
40%

Best-in-ClassAll Others

52%

44%
37%

38%
31%

30%

35%

35%
24%

20%
10%
0%
Provider has
Ability to integrate
w ith other HR or experience w ith
talent management organizations ofsimilar needs
softw areAbility todemonstratebusiness value by
helping build abusiness case

Price

Source: Aberdeen Group, March 2010

© 2010 Aberdeen Group.
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SHL Clients: Demonstrating the Positive Impact of Assessment
on Business Performance
Page 11

Clearly, the selection of a particular solution provider, or indeed a specificassessment tool or product is not going to drive success alone. But when
the selection of a tool and provider is made in support of other key
organizational capabilities, performance is dramatically improved. And
paramount among these, for SHL clients and all Best-in-Class companies is
to involve managers in the assessment process, and make assessments, alongwith the results gleaned from those assessments, meaningful to how
managers make decisions and manage talent.
For more information on this or other research topics, please visit
www.aberdeen.com.

Related Research
Talent Assessment Strategies: A
Decision Guide for Organizational
Performance; March 2010
Onboarding: The First Line ofEngagement; February 2010
Integrated Talent Management:
Improving Business Results through
Visibility and Alignment;
December 2009
Competency Management: The
Foundation for Talent Success;November 2009

Talent Acquisition Strategies 2009:
Cutting through the Clutter andProactively Managing Quality
Candidates; August 2009
Employee Performance Management:
Individual Goals Boost Satisfaction
Inside and Out; July 2009
Assessments in Talent Management:
Strategies to Improve Pre- and Posthire Performance; March 2009

Author: Mollie Lombardi, Senior Research Analyst, Human Capital Management(mollie.lombardi@aberdeen.com)
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