Candidate Assessment Software - Everything You Need To Know To Hire Successfully In 2024

Candidate Assessment Software - Everything You Need To Know To Hire Successfully In 2024

Organisations have been adopting skills-based hiring at a breathtaking pace over the past few years. With the heightened awareness of human biases and the need to combat rampant discrimination in traditional hiring processes, organisations have had to adopt the objective skills-based hiring approach.

This has then led to a demand for advanced software technology products to be able to evaluate candidates’ skills at scale. The days of creating your own makeshift tests are quickly dying, with their high cost and lack of scale holding companies back from fully adopting skills-based hiring at scale.

This comprehensive guide to candidate assessment software will tell you:

  • Why companies use them
  • Different categories of these products
  • Biggest benefits of using these tools
  • Common issues when using assessment software
  • Essential features you’ll want to look out for
  • Questions to ask potential vendors
  • And loads more useful info

What is candidate assessment software?

Candidate assessment software are products/tools used by organisations to evaluate candidates during a hiring process.

These products can evaluate technical skills, coding skills, soft skills, experience, intelligence, personality and more. It really depends on the exact product - some may focus on one type, others might be broader and allow you to test all of these things in a single product, for example like Alooba Assess.

Candidate assessment products are used at various stages of the hiring process, from pre-screening, to screening, interview and more. Where they’re used in the hiring funnel really depends on the problems that they solve for the organisation.

The products can include various types of tests, from multiple choice quizzes, open ended free response answers, video answers, coding tests, file sharing, diagramming and more.

They can be used in person in an office, online asynchronously or online synchronously. Most commonly, these will be used by candidates at home in their own time.

Are they the same as an LMS?

Candidate assessment software and learning management systems (LMS) are different tools to solve different problems. Here’s a few key differences:

  • Candidate assessment software is used on external candidates, whereas LMSs are used on existing employees.
  • Candidate assessment software is normally more about evaluating/validating a skill or ability, whereas LMSs are more about learning a skill or ability.

However, it should be said that some products may have features of both. For example in the Alooba suite, Alooba Growth is used by organisations to evaluate their current team’s capabilities, whereas Alooba Assess is a candidate assessment software used by organisations to evaluate their candidates’ skills.

Are they the same as an ATS?

Candidate assessment software and Applicant Tracking Systems (ATS) are different technologies. The core functionality of an ATS is to act as a centralised database to track candidates’ applications. For example, the ATSs would normally connect to jobs boards like LinkedIn and Indeed, so that as candidates apply, their applications are all available within the ATS, rather than having to manage candidates in the two systems manually.

The ATS will then include an ability to set-up job application forms to collect certain information, set-up structured hiring processes per role, schedule interviews with the candidates, send automated emails when candidates apply, and allow the users to easily search across the applications.

Candidate assessment software often integrates with an ATS, so that the ATS user can then invite a candidate to an assessment via the ATS. For example, Alooba has integrations into various ATSs such as Greenhouse, Lever and SmartRecruiters.

Some ATSs also have their own ‘native’ candidate assessment software, but they are typically very limited in their maturity, and would rarely be used in practice.

Are they the same as a jobs board?

Jobs boards are a separate HR technology to candidate assessment software. Jobs boards are primarily used to advertise open positions and attract candidates. The jobs boards sometimes included a trivial level of screening embedded into them. For example, the application form might include various qualifying questions that the candidate needs to answer to submit their application. Likewise LinkedIn ads, for example, have short skills quizzes for some skills. These are very limited and aren’t used much in practice.

What are the different types of candidate assessment software?

There’s a wide variety of candidate assessment software segments, which basically vary by:

  • what the software assesses
  • how they are used

The categories are:

  • Skills assessments
  • Data literacy assessments
  • Asynchronous interviews
  • Psychometric assessments
  • Live interviews
  • Objective interviews
  • Coding assessments
  • Aptitude assessments
  • Personality assessments
  • Gamified assessments
  • Chatbot interviews

An individual product often does more than one thing, so it can sit across multiple categories. For example, Alooba Assess is a skills assessment platform, but also data literacy assessments, asynchronous video interviews, psychometric assessments, objective interviews, coding assessments, aptitude assessments and personality assessments.

Skills assessments

Skills assessment platforms like Alooba Assess offer a way for organisations to easily evaluate the skills of their job candidates, and adopt a modern skills-based hiring approach to hiring.

Skills assessments platform might be domain specific, offering a deep focus into a set of particular skills, or might be broader, offering a less deep way to evaluate more skills. For example, [Alooba Assess] started with a deep data focus, and has not broadened across other skills.

The coverage could include soft skills, such as verbal communication and leadership, or harder technical skills like SQL and data analytics.

With skills tests being one of the best predictors of job performance, they really are essential for organisations to be able secure the best talent available.

Data literacy assessments

Data literacy (or data fluency) assessments are a type of skills assessment, focused specifically on data literacy. With the explosion in data over the past 10 years, data literacy has become such a fundamental skill set in pretty much any role.

This has then led to the need for dedicated data literacy tests to evaluate candidates’ understanding of foundational concepts like the different data formats and how they’re stored, how to cleanse and wrangle data, how to create appropriate metrics, how to understand cause and effect, how to understand the impact of outliers, and many more basics.

You can easily validate your candidates’ data literacy on Alooba.

Asynchronous interviews

Asynchronous interviews - also referred to as one-way interviews - are basically where the candidate is asked to answer questions via video, without the presence of a human interviewer. The questions might be presented in a text or video format, and the candidate will need to record their answer.

The questions will normally be similar questions that you would cover off in a live human-to-human interview, but just in the asynchronous format. The answers will then either be manually graded or automatically graded using machine learning. If manually graded, there is the potential for bias to slip into the process.

Asynchronous interviews can sometimes be viewed dimly by candidates, who may feel as though they’re a little bit alienating, and they might struggle to communicate their true thoughts, without having a human being there to interact with.

You can run asynchronous interviews on Alooba with the one-way interview product, which allows you to easily interview candidates without needing to commit an interviewer to the process. You can leverage the existing question set, or create your own for your organisation.

Psychometric assessments

Psychometric assessments are a category that includes both personality tests, and cognitive abilities tests.

Live interviews

Live interview products give you the ability to manage your live ‘human-to-human’ online interviews in a proper environment.

While some organisations choose to run their interviews outside of any interview software product (e.g. simply within Google Meet, Zoom or Teams), these software allow for a more structured set-up.

Coding assessments

Coding assessments are a particular type of skills assessment, focused specifically on coding/programming skills. These products are domain specific, and normally used by organisations to evaluate their software engineers and other IT professionals.

The products normally come with both the ability to test candidates across various programming languages, like C#, Java, PHP and Scala and will include a library of existing programming challenges for candidates to complete.

You’ll receive insights showing how the candidate’s attacked the problem, the code that they wrote, how they executed, how long it took to run etc. These questions are normally automatically graded based on ‘test cases’.

On Alooba, you can evaluate your candidates’ SQL, Python & R skills.

Aptitude assessments

Aptitude assessments, also known as cognitive abilities tests or general mental abilities tests are used to evaluate someone’s intelligence or IQ. Someone’s general cognitive ability is one of top 2 predictors of job performance, along with skills tests.

Aptitude assessments are especially popular for junior hiring (graduate/campus recruitment) because fresh candidates straight out of university typically have little to no experience or real skills.

Aptitude tests include inductive reasoning tests, numerical reasoning tests and verbal reasoning tests.

Personality assessments

Personality tests are a way to understand how someone behaves and thinks - their personality.

Personality tests don’t have right or wrong answers, unlike skills assessment or aptitude tests. It’s for this reason that they are fairly rarely used as a screening tool to screen candidates in or out of a hiring process. Rather, they help to understand how the new hires would fit into their new team.

The single authoritative personality model is the Big 5 personality model, also known as the OCEAN model or the CANOE model, based on the acronym of the 5 personality traits that someone’s personality can be measured along. For example, how agreeable someone is, or how introverted they are or how open they are to new experiences.

While it’s rarely used as a screening tool, the extensive meta analysis of job performance did show that scoring high on the conscientiousness trait in the Big 5 personality did predict good job performance.

Myers Briggs is also a well-known personality model, however it is not necessarily backed by the science of the Big 5 model.

Gamified assessments

Gamified assessments rose to prominence in the early 2010s coinciding with the general movement of gamifying different user experiences. These gamified assessments were especially popular in the graduate/campus recruitment market, where talent teams saw a need to modernise their tired hiring practices to stay relevant with the younger demographic. They ended up being somewhat of a gimmick and are not commonly used outside of graduate hiring.

Chatbot interviews

Chatbot interviews are somewhere between a 1-way video interview and human-to-human interview. The candidate will be asked a series of questions in text format, and answer in text format. It is conversational in nature, typically leveraging large language models like ChatGPT, and others have developed their own proprietary models.

These products have not yet achieved any mainstream breakthrough in recruitment for professional roles, but have been used in low-skilled/high volume labour hiring (e.g. supermarket workers).

Where to find out more about candidate assessment software?

G2 is a popular site to compare different software products. It’s a useful way to get a quick overview of the different categories of software products out there. By perusing the comments in the reviews, you’ll get a good understanding of how users actually use the software and what matters most to them. These are insights that are hard to glean just by looking at the software’s marketing pages or talking to their sales reps.

Beware of a couple of issues when using G2 as a review tool:

  • The reviews are sometimes ‘incentivised’
  • The reviews are sometimes fake or fraudulent
  • The categorisation of the products is imperfect, so the comparisons are not always really apples-to-apples
  • Not everyone who leaves a review is actually a paying user

That aside, feel free to check out Alooba reviews on G2 here to hear directly from our customers on their experience using Alooba, like Scott Crowe who heads talent acquisition for data-related roles at Canva.

Why do organizations use candidate assessment software?

There are many reasons why organizations choose to use candidate assessment software, depending on their main hiring pain points, the type of organisation and which types of roles they typically hire. Here are the leading reasons

Hire the best

In order to hire the best candidates possible, it’s clearly essential to properly evaluate that they have the best skills & experience needed for the role.

With 78% of candidates lying on their CV, and interviews being an ineffective way to evaluate skills, assessments are really the only way to ensure candidates have what you need.

For example, in a metastudy of more than 85 years of research into job performance, covering 19 different selection methods for hiring people, Hunter & Schmidt found that found that ‘work sample tests’, ‘job knowledge tests’ and ‘general mental abilities tests’ were the top 3 predictors of job performance.

Without these objective measures, you run the risk of the dreaded mis-hire, which can cost up to 2.5x their salary.

Assessments are not just about screening out candidates that don’t what it takes, but screening in those that do. Candidates slip through the cracks for so many reasons, and so having a way to easily identify the best candidates - free from bias - is essential.

Reduce bias

Did you know that people with Chinese names have only the chance of getting a callback when applying with a CV?

Moving beyond traditional CV screening is essential if you want to have any hope of reducing bias in your hiring process. Screening assessments give you an amazing opportunity to put into place the DE&I practises that we hear preached a lot, but practised very little.

And it’s not just the CV screening step that is littered with bias. Human interviews are also packed full of bias, like anchoring bias, illusory correlation, beauty bias and recency bias.

All these biases cloud your judgement on who the best candidate is, and ultimately lead to hiring errors. By having an objective, unbiased measure that you can rely on, you can prevent missing out on the best candidates.

Hire faster

Traditional hiring approaches are super manual, which creates huge bottlenecks. With CVs sometimes sitting unread for weeks - or not at all - and candidates waiting for an interviewer to be available, legacy hiring approaches can be tediously slow. This leads to the best candidates dropping out of the process to go to faster moving companies.

Candidate assessment products allow you to hire much faster by entirely automating the screening process, early round interviews, and replacing clunky manual tests with a proper product.

Check out this guide for how to replace your legacy CV screening approach with skills-based screening and shave 1 week of your time to hire.

Hire cheaper

Without basic automation in the hiring process, your hiring costs will quickly blow out. The only way to hire more people would be to throw recruiters at the problem, either internal TAs or external agencies, both of which are going to be super expensive.

Developing your own tests in house is an option, but it’s incredibly expensive and doesn’t scale at all.

By using candidate assessment software, you can easily automate the screening process, conduct 1-way asynchronous early interviews and use automated in-depth assessments in the later stages.

Scale hiring

Without a way to efficiently screen, interview & select the right candidate for the role, it would be impossible to quickly scale a team effectively. If your business has been recently funded, this will drastically limit your ability to hit your ambitious growth targets.

E.g. If you have 1 person in your talent team, and you suddenly want to hire 20 people, they will immediately be a bottleneck to your growth if they don’t have any tools available to properly execute the hiring processes.

Leverage expertise

Talent teams are not domain experts in the majority of roles that they hire for. This is a root cause of the pain of a lot of hiring managers, who continually feel that they are not being presented with the right candidates from their talent team.

The talent team needs to be empowered with tools that allow them to leverage other peoples’ expertise. For example, Alooba Assess has 3500+ expert written questions across 50+ areas. This means the talent team - or whomever is doing the hiring - does’t need to be experts in any of these fields to hire effectively.

Hire legally

In many jurisdictions, it’s a legal requirement that hiring be based on merit. With traditional hiring approaches like ad hoc interviews and manual CV screening being unsuitable, organisations look for ways to ensure that they are complying with their legal requirements. Candidate assessment software provides an easy way to do - to hire someone based on measuring their skills, intelligence and personality is evidence-based by design.

This helps to keep organisations on the right side of the law, and prevent both criminal proceedings and civil lawsuits.

For example, SpaceX has recently been sued by the Justice Department for hiring malpractice. By running an objective, merit-based approach instead, SpaceX could have avoided this claim.

Should we create our own assessments or buy candidate assessment software?

The build vs buy is always a good question to consider.

In this case, no organisations - even technology businesses - ever choose to build their own candidate assessment software. Rather than build their own, they might create a lightweight option. For example, sharing a dataset with a candidate and getting them to do an analysis or build a model. Or asking candidates to prepare a slide deck and pitch in an interview. This is technically some sort of assessment, but it’s not a comprehensive candidate assessment product

Here’s a comprehensive guide comparing creating your own tests vs using a candidate assessment software like Alooba Assess.

Hear from those who are already using candidate assessment software

How can you accurately assess somebody's technical skills, like the same way across the board, right? We had devised a Tableau-based assessment. So it wasn't like a past/fail. It was kind of like, hey, what do they send us? Did they understand the data or the values that they're showing accurate? Where we'd say, hey, here's the credentials to access the data set. And it just wasn't really a scalable way to assess technical - just administering it, all of it was manual, but the whole process sucked!

Cole Brickley, Avicado (Director Data Science & Business Intelligence)

Interested in skills-based hiring. Check out this guide.