Why did I invest in a psychometric testing company?

By David Dahl, Revelian Chairman

 

In 1979, I founded a new company called Tradelink Plumbing Supplies. It certainly wasn’t the only plumbing supplies company at the time – in fact, there were three major competitors in the market: Raymor, McIllwraith, and Watson & Crane, who had all been around for between 50 – 100 years and had well-established, large chains of trade outlets. However, within another ten to fifteen years, they were all sporting the Tradelink banner, and are still doing so to this day.

 

Why did Tradelink – “the new kid on the block” – succeed and become the business of choice for so many tradies?

 

We didn’t make or sell anything unique: our products were the same as everyone else’s. I believe that the main reason for our success was the services we offered and the level of care we provided to our customers – which was a direct result of the kind of people we hired. We had excellent people – and when you have a solid business plan and the right people, great things can happen.

 

Right at the beginning, I had access to a somewhat crude paper-based Cognitive Ability Test that assessed verbal, numerical and abstract reasoning. We had every applicant complete this before considering them further: If they didn’t attain a specific benchmark, we wouldn’t proceed any further with their application.

 

I know for certain that using this assessment meant that we would be hiring people who were able to learn quickly, think outside the box, contribute to developing and growing the business, and offer exceptional service to our customers.

 

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It’s also interesting to note that many of the people we employed during those early days remained with Tradelink for over 30 years. Cognitive Ability Tests (also known as Aptitude Tests) are said to correlate with longer tenure and this is a nice real-life case of that happening. We also noticed that years of experience didn’t predict performance as well as Cognitive Ability Tests: when we hired people based on their experience, they were quickly overtaken by people who had the right measure of cognitive ability.

 

We sold Tradelink to the publicly listed Burns Philp in 1998 as part of my personal ten-year plan. After a number of shuffles, Tradelink has become part of the massive New Zealand-based Fletcher Building Group.

 

At around the same time as I sold Tradelink, my son Steven – who had taken on a role with an international recruitment firm – was very dissatisfied with how unscientific most recruitment processes were. He felt most hiring decisions were based on little more than guesswork and believed strongly that psychometric testing – delivered online and accessible to everyone – could bring much more objectivity and rigour to the process for both recruiters and employers.

 

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It’s probably no surprise that I agreed with him, based on my own experiences using testing at Tradelink. In 1999, we began developing our own psychometric assessments, using the (then very basic) internet. We were, in fact, the first company in Australia to bring psychometric testing online, and one of a handful worldwide at the time.

 

Over the years, we’ve changed our name from Onetest to Revelian, developed many more assessments and have a loyal community of customers, including government departments, public and private sector operators, and many small businesses as well. And we offer over 800 assessments for almost anything performance-related, including our latest innovation – game-based assessments – which have received worldwide accolades, including the coveted 2016 Australasian Serious Games Showcase & Challenge. And we continue to innovate and grow to meet the needs of a rapidly changing and evolving marketplace.

 

Smart employers know that the cost of a wrong hire can be up to one and a half times the annual salary of the position – and often, that’s only the obvious cost. Other costs can include lost business, lost opportunities, lowered morale, reduced productivity and much more. On the other hand, the cost of assessing all of the applicants for a role is generally equivalent to around a single week’s salary. It seems like a clear win to me.

 

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I suppose that my biggest disappointment in the time I’ve been a part of Revelian is that some CEOs, HR professionals and the management teams of many companies still don’t take advantage of these powerful tools to gain such a strong advantage over their competitors. We’ve seen it time and time again: an applicant prepared for and performed superbly at an interview, but then failed to produce the right stuff when hired. Assessments give you additional information about your applicants that you can’t get any other way: the information you need to confidently appoint the best new team members.

 

So – in short, I invested in a psychometric testing company for two reasons: firstly, because I know that assessments work, having seen for myself firsthand the calibre of employees at Tradelink and secondly, because I know that by using our tools to identify the best people to hire, our clients can build a super team who will provide excellence of service to their clients, helping to build an exceptional business.

 


 

David Dahl - RevelianAbout the Author

 

David Dahl has been with Revelian since day one in 1999, assisting founder and former CEO Steven Dahl and his team to develop a range of innovative online solutions for the HR industry. David is extremely passionate about delivering unbelievable customer service and the role Revelian plays in helping customers to improve recruitment, development and retention strategies. David has a background in Banking and Finance, property development and has played entrepreneur in the start-up of several well-known companies – best known being Tradelink Plumbing Supplies.