Skill Assessments: Helpful Hiring Tool or Compliance Risk?

By: Carly Richter, Sr. Recruiter & Career Coach

As a recruiter, I get asked about skill assessments all the time. Should you use them? Should you test for Excel skills? What about personality assessments?

My answer is usually the same: it depends.

Here’s a quick guide to do’s and don’ts if you’re considering using skill assessments in your hiring process.

 

What is a skill assessment?

Employers use skill assessments (also sometimes called skills tests) to measure a candidate’s actual abilities, knowledge, and job-related competencies.

Unlike resumes or interviews, which can be subjective, skill assessments can provide more objective proof that a candidate can perform the required tasks.

There are many different types of skill assessments, depending on the role:

• Hard Skills / Technical Tests: Measure specific hard skills like coding, software proficiency, math, or data entry.
• Work Sample Tests: Simulate real everyday tasks the candidate would be expected to do, such as writing a sample email, fixing a bug, or presenting a case study.
• Cognitive Ability Tests: Evaluate how candidates would perform in unexpected situations, and measure problem-solving, critical thinking, and numerical or verbal reasoning skills.
• Personality / Behavioral Tests: Assess workplace traits, communication styles, and cultural fit.
• Situational Judgment Tests: Present hypothetical workplace scenarios to see how a candidate would react.

Skill assessments can be great hiring tools when they’re thoughtful, job-related, and used at the right point in the process.

But they’re also surprisingly easy to misuse, which can create a poor candidate experience and even put your company at risk from a compliance standpoint.

Personally, I tend to lean more toward practical examples of applied skills than quiz results. I’d much rather hear someone explain how they’ve used Excel to solve a problem than see how they scored on a generic online test.

 

Ensure you’re vetting your skill assessment

If you do decide to use skill assessments, be careful about where they come from. Don’t just grab the first Excel assessment you find in a Google search.

Make sure the assessment you’re using actually measures the skills needed for the job and doesn’t screen out qualified talent.

There are a lot of unvetted tools out there. And a lot of generic tools you find online have no bearing on what your position actually entails.

Here’s why vetting your skill assessments matters:

• Makes sure the test actually reflects the job. Check that the questions align with the job’s day-to-day responsibilities. A generic or unrelated test wastes everyone’s time by measuring unrelated skills.
• Reduces bad hires. A poorly built test can send false signals and waste time on unqualified candidates. Have your top performers test it out first to confirm you’re measuring what you should be and that the questions actually make sense.
• Protects the candidate experience. Confusing, glitchy, or way-too-long assessments can frustrate applicants and turn them away from the role.
• Minimizes legal and bias risks. Validated, standardized tests treat everyone fairly. Skip that step, and you risk baking in hidden bias or disparities into your hiring process (not good at all).

Some validated assessments exist, but they can also be expensive.

Timing matters, too

One of the biggest mistakes I see is employers implementing technical or personality assessments too early in the hiring process.

Candidates shouldn’t be jumping through hoops before you’ve even determined whether they’re a viable fit for the role.

In some cases, using assessments incorrectly can create compliance concerns, so it’s important to understand the purpose of the assessment and how it relates directly to the job.

 

When skill assessments make the most sense

That doesn’t mean skill assessments don’t have a place.

When my husband was job searching, he interviewed for several structural engineering roles, and every company included some type of technical problem-solving exercise. Lots of math.

But those assessments didn’t happen at the beginning of the process.

They happened later, after the team had already spent time getting to know him and evaluating his overall qualifications.

In other roles, skill assessments look different.

For marketing and design positions, requesting a portfolio is often a normal and expected part of the process.

Just remember that privacy concerns are real. Some candidates may not want to share a public link, especially if their work is tied to client confidentiality.

Be prepared to offer alternatives, such as having them walk you through their portfolio live during an interview.

Excel skills are another area where I get questions from clients.

Rather than relying on a generic online assessment, I often recommend creating your own simple exercise based on actual job duties.

I’ve built Excel assignments for clients and also developed interview questions that ask candidates to explain how they’ve used spreadsheets, reporting, formulas, or data analysis in previous roles.

Those conversations often provide more meaningful insight than a multiple-choice test.

Things to remember before using a skills assessment

When done well, skill assessments can help you measure real abilities, see skills in action, reduce bias, and gather more objective hiring data.

But when they’re poorly designed, overly generic, time-consuming, or misused, they can frustrate candidates and become more of a barrier than a benefit.

Here are some scenarios where assessments can be problematic:

• Disparate impact and legal risk. Tests or scoring methods that screen out people from protected groups (like race, gender, age, or disability) violate anti-discrimination laws.
• Unrealistic time commitments. Hours of unpaid take-home work drive away top candidates who value their time.
• Unrelated puzzles and trick questions. The goal isn’t to confuse or trip people up. Trivia and brainteasers with no tie to the job just filter out qualified candidates.
• Over-emphasizing speed. Timed tests reward quick recall over real problem-solving, so you can miss out on strong, methodical thinkers.
• Using personality or clinical tools. Many of these tools weren’t built for hiring and are often unreliable, so using them increases your risk of bias, privacy concerns, and bad hiring decisions.

Let’s talk about these personality assessments for a minute.

Please, please don’t use personality assessments to make hiring decisions.

At HR Annie, we offer the PREP Profile, and we use this assessment after a candidate has accepted an offer.

The goal isn’t to decide who gets hired. It’s to help managers and teammates understand how to communicate and work effectively with the new employee.

That’s a much more appropriate use of a personality assessment.

 

I think skill assessments have their place. Sometimes they’re absolutely necessary, and sometimes they’re not.

If you’re going to use one, make sure it’s thoughtful, compliant, and directly tied to the job.

Don’t include a skill assessment just for the sake of including one. Know why you’re using it, what you’re trying to learn, and whether it’s truly necessary.

In many cases, a well-crafted interview question or practical example can tell you just as much.

 

Be sure to reach out to us at HR Annie Recruitment for additional recruitment support, or contact us to set up a quick chat to assess your needs!