What Is a Management or Leadership Assessment Center?
A management or leadership assessment center is a series of tests, interviews, simulations, and exercises designed to predict how well a management candidate will perform in a specific role. For you sports fans, think of the NFL Combine, used to assess collage players to help teams decide who to pick for the draft.
Is a Center Really a Place or Is It a Thing?
A little of both. A “center” can indeed be a place where you send management candidates to – run by companies who specialize in assessment methodology. Or, you can have an “in-house” assessment center, using your own trained managers or HR staff, with the assistance of an outside firm. Some companies are even offering “virtual” assessment centers, as a way to save time and money. Everything is done online with the help of technology like Skype and video-based behavioral simulations.
Who Does This Stuff?
There are a lot of companies that will sell you assessment center services. The ones we're most familiar with and can recommend are Development Dimensions International, Korn Ferry/Lominger, Right Management, and Hay Group.
One of the things to watch for when shopping for an assessment center provider is potential conflict of interest and bias. For example, a search firm that offer assessment center-like services might have bias to come in and show you that your managers are all morons so they can come in and find you new ones.
Or a training provider might want to again show you your managers lack skills so they can sell you training programs. We're not saying they’ll all do this – the one’s we’ve recommended seem to be able to remain objective – but just be aware of it.
How Expensive Is It?
Unfortunately, very. This is the number one reason why many companies don’t use them, and you may have never heard of them. They are usually used for senior management positions, given the potential risk if one of these high level managers don’t work out.
Of course, prices will vary by provider, the type of position you are assessing for, and the complexity of the methodology, but for a senior level executive hire expect to pay anywhere from $8,000 to $20,000 per candidate. In-house centers and group assessments can save money, but it’s still a big investment in time.
Do They Work? And Are They Worth It?
Yes, we believe they do. A well-designed, valid and reliable assessment center can usually predict potential success in a role and minimize the chances of making a bad hiring decision. We’ve talked to enough providers, peer practitioners, reviewed the research, and have worked in companies that use them to be convinced of this.
Assessment centers have other side benefits too. Once a candidate is assessed, if hired, they can get valuable development feedback. If you train your managers and HR staff to participate in a center, they get better at assessment and selection.
Finally, most candidates come away impressed with a company’s commitment to its hiring practices and perceive the process as more fair and unbiased.
“Are they worth it?” is a trickier question to answer. We’d say it depends on the importance of the position. For a C-level executive hiring decision, where a selection mistake can cost a company millions of dollars, maybe even billions, spending $12,000 to $20,000 to make a better decision sure makes sense to me.
Although, if you make a bad management hire, at least everyone can learn some valuable lessons from a horrible boss.
For most other positions, we're not so sure. There are far less expensive options that many companies might not be using that will get you a better ROI. For a middle-management hire, we’d recommend:
1. A well designed internal development and succession planning system. By carefully grooming and observing your own pool of internal candidates, you won’t need to rely on external assessments and experts.
Besides, external hires are also usually more expensive and riskier than an internal promotion.
2. Getting multiple perspectives, references, and background checks. The more data the better. Using an interview team, or selection committee, will help overcome your own biases and improve the accuracy.
3. Administer your own validated selection assessment tool. There are many, and they cost anywhere from $50 to 500. A couple that we've used and would recommend are Hogan and Caliper, but there are hundreds. You can test for personality, values (motivation), skills, and intelligence.
4. Use a competent, trusted search consultant. The best recruiters are so good at what they do, their own “sixth sense” is often more accurate than a roomful or Organizational Psychologists.
Any or all of these assessment methods, if done well, can help weed out the pretenders from the contenders. But for a high level management position, where the stakes are much higher, you may want to consider using a full-blown assessment center. The investment is well worth it.