How I find the best staff with IQ tests

Over a decade ago, Yarris software began as a small developer of field management software. Now the company is one of the best-known brands of its type in Australia, and has major clients in the automotive and legal industries.

But chairman Ian Goddard says the company has been able to grow through a unique method – insisting on psychometric testing for job candidates. He says small businesses looking for the best staff, especially in such a competitive environment, need to do the same.

Can you give a basic outline of Yarris’ services?

We essentially help our customers manage service delivery. That includes the telecommunications market, handing field service, vehicle repair, and so on. We’ve enabled companies to halve the costs of vehicle repair.

You have a few different product lines, is that right?

We have three product lines. The insurance product line is growing very well, and we’re handling the auto clubs in Western Australia, South Australia and Tasmania, and we’re doing the Suncorp-Metway vehicle repair.

We’re basically operating with half of the Australian automotive industry. We also help the Victorian government manage their whole panel of lawyers. They spend around $50 million a year on legal advice and we’ve rationalised that whole system for them.

In 2009 you turned over about $10 million. Has that grown?

It’s still about $10 million. We didn’t grow during the financial crisis but we are aiming overseas and we believe we will see growth there.

When did you begin your psychometric testing policy?

We started that practice back in 2000. We were very early starters and were some of the first entrants in that market here.

How did that topic even come up?

Originally, we established a business in the field. We know a lot about it, and had a quite important venture called TestGrid. We sold that four years ago, but we still take on that psychometric testing. TestGrid sells several hundred different tests, and that’s what got us interested in it all.

And what’s the thought basis behind that decision?

We want to have the brightest and the best. And we want a harmonious team that gets on together. When you have someone new coming on the job, you want to make sure you have someone who can actually work. You make that decision based on interviews, and reference checks, but the testing is a useful tool on top of all of that.

How do you even perform this type of testing?

You vary the test according to the role. But generally it uses some type of cognitive test, which someone may call an IQ test. That includes elements of mathematical reasoning, verbal reasoning and so on. Psychologists tell us the best indicator you can have is intelligence. If you have a bright person, they’re more likely to do the job extremely well.

Are there any particular indicators that you’re looking for?

With cognitive tests, people forget that a 100 is an average. Some will be above, and some will be below – we want to hire those people that are well above that market. You’re looking for the considerably higher testers.

With personality, you’re looking for a range of different factors. Do they get on well with people? Do they have a great need for self-promotion? With a sales person, for instance, do you see any type of reluctance in their personality?

You would generally need a psychologist to help you interpret all of those results as well.

And is everybody subject to this type of testing?

We don’t test everybody, just the final few candidates. It’s important in our view to strive for diversity, so we don’t want to just test everybody and then find people that are in the same mindset.

A psychologist once told me that she tested 12 executives in a business, and 11 of them were grouped in one quadrant. There was one left. The 11 were more artistic people, and the one left was the type who keeps pens in his pocket. He made the whole operation work, and the rest were the creative types.

It’s important that you have a diverse group of people so you have a mix and keep things working. You want intelligence, but a high range of diversity among your staff.

Do you ever get a result that makes you rethink your approach to a particular candidate?

Occasionally you do, yes. It gives you an insight into what you’re looking for. For example, if you’re appointing somebody to a role that’s dealing with the public, you want to be to be an extrovert. It’s an interesting situation.

But when you’re looking at these things, you take everything into account. Testing is just another factor in the whole process, I wouldn’t base everything off of one test.

Would you recommend this for smaller businesses?

Absolutely, I certainly would recommend it. I think it’s extremely useful. The very large organisations such as the banks, and financial institutions, all use this process. In situations where you have many applicants and want the best, it’s a useful tool.