Psychometrics put to the test
Could psychometric testing have prevented the collapse of the Barings Bank by revealing that Nick Leeson had the potential to become a rogue trader?
Leeson himself says not. However, psychometrics experts say that Leeson’s tendency to take risks would likely have shown up – as a desirable trait for employers a decade ago, when he almost single-handedly bankrupted one of the world’s most respected financial institutions, but less so today.
Speaking at an event organised by financial services consultancy CityCompass, Leeson told Recruiter he believes Barings could have done nothing during the recruitment stage to figure out that he was a potential liability.
“Pychometric tests are very similar, and I think it is very easy to manufacture the results. And there was nothing on my CV that was misleading,” he said.
Even so, recruitment in the field has changed since Leeson’s high-living days with Barings. Martin Reed, chief executive of psychometrics specialist Thomas International, said that people with Leeson’s risk-taking profile were the kind of staff Barings was after at the time.
“That’s the kind of person Barings wanted – an entrepreneurial individual to go out and make them some money,” he said. “But since then they have over-egged the rules and they now recruit people very differently.”
Eugene Burke, director of design and innovation at recruitment and psychometrics firm SHL, said: “Banks and financial companies are certainly putting more investment into the detail of competency modelling. There is more focus
on the risk factor.”
Leeson himself admitted he has a compulsive side to his character, which may have affected the way he traded.
Testing may be able to provide insight into how to manage risk-takers to ensure they do not put the firm in jeopardy as Leeson did.
Leeson explained that he was unable to deal with the fact he was failing at his job as a futures trader in Singapore and felt out of his depth. But he could not admit to his colleagues and family that he was trading himself into trouble.
| SHL and Monster team up |
| The UK arm of global recruiter Monster has teamed up with psychometric specialist SHL to offer jobseekers experience of ability tests before taking them for real. Candidates can access SHL practice tests on Monster’s website before receiving a personalised report with their results and tips for improving performance. “At Monster we are always looking at ways to help jobseekers by giving them advice on our site,” said Alan Townsend (pictured above), regional managing director for UK and Ireland. “The new SHL ability tests posted on Monster.co.uk give candidates the chance to see how they rate on core abilities demanded by many employers.” SHL research director Professor Dave Bartram believes working with Monster offers candidates an opportunity to practice the sort of ability tests they could face during the recruitment process. “It is important for candidates to become familiar both with the type of questions they will be asked and with the general process of taking these sorts of tests,” said Bartram. Ian Florance, company secretary for the Business Test Publishers Association, believes that linking online psychometric assessment with a recruiter is a good idea in principle, but there must be clear guidelines for people taking the tests. “There’s no reason why any candidate shouldn’t take a psychometric test before going into an interview,” he said. “But it does depend on what sort of test it is. If someone is going for a number-crunching job, the candidate shouldn’t take a creative test.” Florence believes that tests put on the web should require little explanation, an appraisal of their limits and feedback that’s easy to understand. To take your very own assessment test, log on to www.monster.co.uk/assessment. |
