Date posted: 15/11/2017 6 min read

Competency testing - a new tool in recruiting?

Giles Pearson FCA says frustration led him to develop an online testing company, accountests.com, with the aim of helping businesses find good finance staff, as well as reducing bad hires.

In Brief

  • accountests.com is an online testing business which offers competency tests in accounting.
  • Subject matter and questions are tailored for Australia and NZ.
  • Getting the right staff the first time round saves on time, money and outsourcing.

In his 18 years as a partner with PwC in the Hawkes Bay region of New Zealand, there was one thing which continued to frustrate Giles Pearson FCA.  

Over and over again, he saw clients take on accountants who, although they might have impressive enough CVs, lacked the technical skills they needed to do their jobs effectively.

“Someone might have looked great on paper, but when they had to apply technical knowledge their skills didn’t match up with how they represented themselves in the CVs,” says Pearson.

The impact of this was waste, both in terms of time and money. Clients were forced to reach out to engage specialist skills for jobs their own accountants could not perform, forcing time delays and additional expense.  

“Research will tell you that the cost of this reworking is 143% of the salary of the person who didn’t perform,” says Pearson. This puts the average cost of recovering from a bad hire at A$185,000 for an accountant, and A$100,000 for a bookkeeper.

Pearson’s frustration, however, led to an idea which – since he left PwC – he is now able to pursue full-time.

Does anything really beat good judgement?

Teaming up with Steve Evans, whose background is in human resources with a particular expertise in psychometric testing, Pearson has launched accountests.com, an online testing business which offers downloadable competency testing across a range of accounting disciplines.

In 40 multiple choice questions, in tests designed to be completed in 30 minutes, accountests offers six tests across areas such as cost accounting, management accounting, bookkeeping and chartered accountancy. 

After a soft launch several years ago, Pearson and Evans are now pursuing accountests on a full-time basis, designing tests which can help in the recruitment of accountants in both New Zealand and Australia. 

Already, accountests are up to around 1,000 tests taken, with the majority so far done in New Zealand. 

 

There is no Googling this stuff. Either you know it or you don’t
Steve Evans Co-founder of accountests.com 

 

The subject matter and questions are tailored to the Australian or New Zealand regulatory and tax environments, and the tests are “professionally agnostic” in that they are relevant to accountants across a range of different qualifications.

“We advocate that employers use our tests alongside the existing recruiting process,” says Evans.

“The idea is that once an applicant does a structured interview and the employer does a reference check, then doing one of our tests on top of that can give some extra insight on whether the person’s skills are as good as their CV says.

“There is no Googling this stuff. Either you know it or you don’t and it is very hard for people to fudge or cheat.”

The Australasian market for accounting skills, says Pearson, is “pretty tight”. “Often when you advertise a vacancy the reality is that you are struggling to get a pool of good candidates,” he says.

How to verify tests have been completed honestly

“So if you strike a candidate who scores well in the test and everything else they have done stacks up, then it tells you this person is marketable and it allows employers to get on the front foot and get a deal done quickly to get the person onboard.

“On the other side, if the candidate performs poorly in the test that might be why they are moving on from their current employer, and the truth is that you are often better to employ nobody than somebody who doesn’t have the skills to do the job.”

Recruiters and employers set their own conditions for the tests and Evans says many are using effective ways of ensuring the integrity of the tests and to verify they have been completed honestly. 

“One way is to retest the person, with another test in the same category, while other people will use a Skype call with a candidate for testing,” he says.

Pearson drove the development of the test contents and says they have been deliberately set at a high level. “We want to test the ceiling on where people are, and most people tell us that it does that quite well,” he said. “We don’t get many people saying it was easy.”

Feedback from the recruitment side of the equation has been positive so far, although Pearson acknowledges it could be slow to build momentum. “Accountants are difficult people to get to change the way they do things,” he says.

“In the industry, accountants are the ones who understand the pain of employing the wrong person – but they are rarely the ones doing the recruiting.”

Listen: How common is it for companies to use personality tests?

In this episode of the Acuity podcast, we interview Cathy O’Neil, a US mathematician, Data Scientist and Ted Talk Speaker about the power of big data and why some companies have found themselves in hot water for using personality tests. 

Four signs you made the wrong hire

Do you think you have made a mistake with a new employee? Here are four red flags that you have made a bad hire.

1. Culture clash

If the new person doesn’t fit into your team culture it can cause negativity and lead to a downturn in productivity. 

2. They can’t walk the talk

Some people look very good at the interview stage but turn out not to have the skills you expected. 

3. “At my old job…” 

When a new employee is constantly talking about their previous workplace they are unlikely to be engaged in your workplace.

4. Lying awake at night

Do you find yourself worrying about the new employee at night? That’s a clear sign something is wrong.

Related: Five mistakes that can ruin a firm's brand

Firms spend a lot of money building their brand but brand can be undone from within by cranky or unqualified staff.