Rocket-Hire – Talent Assessment Market Trends Report and Vendor Research Portal

Charles Handler Rocket HireToday, we have Charles Handler, the preeminent expert on pre-hire assessments and assessments, talent assessments. His company is Rocket-Hire and we discuss some work he’s done recently around talent assessments as market trends report. We also talk about work he’s done on a vendor research portal, because he’s looked at all the vendors and he’s made a fair assessment of what they do and how they behave.

Listening time: 29 minutes


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William 0:33
Ladies and gentlemen, this is William Tincup, and you’re listening to the RecruitingDaily podcast. Today, we have Charles Handler, the preeminent expert on pre hire assessments and assessments, talent assessments, and his company is Rocket-Hire. And we’re gonna be talking about some work he’s done recently around town assessments as market trends report. And we’re also gonna be talking about work he’s done on a vendor research Porter portal, because he’s looked at all the vendors and he’s made a fair assessment of what they do and how they behave, etc. So let’s get right into it. Charles, introduce both yourself and Rocket-Hire.

Charles 1:16
Yeah, thank you so much. My name is Charles Handler. I’m an industrial-organizational psychologist, I say that very proudly. We specialize in being in some sense on industrial-organizational psychologists in that we, we have a really good grasp of the fundamentals of talent assessment from a lot of perspectives, but we are business partners, first and foremost. So we understand our client’s business and their objectives. And we we work to keep the science behind the scenes enough that we, we don’t have people looking at us and scratching their heads. And our firm, we’ve been around since 2001. Continually, which is amazing. For me personally, to even reflect on. And we’ve done it all, when it comes to talent assessment. I mean, honestly, we do that we build assessments, we’ve validated them, we run programs, for clients, mostly enterprise global companies, where we’re really differentiated. And that’s really why we’re talking today, William, is that we’ve studied this market for for two decades, we’ve we’ve done multiple, different assessment buyers guides, we work for a lot of vendors in the space, we work for private equity and investors as well. Because we have that core understanding of the assessment and and how it looks at a macro level. But also we can get down to the most, the most minute nitty-gritty of the science and, and we can live there with with ease. So you know, we take a very holistic perspective, and we do a lot, but tracking the market is really our big differentiator, and it serves us and our clients super well, in a lot of different ways.

William 3:00
So recently, you you really went deep, probably deeper than I think I’ve seen you in terms of a report, you went really deep into kind of the assessment trends. Tell us a little bit at a high level. Tell us a little bit about that. What did you learn?

Charles 3:18
Wow, well, I learned that there’s a lot to learn. But the number one takeaway, just top of mind, you know, pure mental flow here. The industry is booming, it is growing incredibly, almost exponentially since you know, in the last 10 years. And in the last five years, even more. So the characteristics of who’s jumping into the industry is getting very different. And I think that’s that’s a good thing in a lot of ways. And one of the other things that’s really important, I think framing how we think of assessments is I did not just think about it as who’s got a bunch of tests that people can take, it’s any predictive hiring tool. So anything that that a platform, or product is doing to say, you know, this person has a better chance of success than someone else. And here’s why in some cases. And so that gets into obviously, your whole AI aspect of things. And a lot of the recruitment process automation, which I feel like is, you know, kind of starting to become the future of how predictive hiring happens. So there’s a lot to unpack in it. And the the variation in types of firms and how people are doing things is also increasing quite a bit. And it’s becoming in a weird way, a young industry again, I mean, you have you have some industry Titans that been around for a long time. But man, the number of startups, the number of new companies and I would bet William You might, you might compare this to your overall knowledge of HR tech in general, but it’s just so much easier to start a company now, I mean, the barriers to entry are very low, there’s a lot of cachet around it, there’s a lot of, there’s a lot of encouragement from the world to say, Hey, you got a better idea, you want to try something, you know, jump in there and give it a shot. And, and little people can look big now and do big things. So that’s probably a trend that happens in a lot of industries. But man, oh, man, there’s like, I want to say 60% of the companies in our database of 250 are under 10 years old. And then I’ve got another 50 waiting in the hopper that I haven’t had time to profile yet, because we have a very detailed profiling process. And, you know, those are almost none of them that I heard of, I kind of tapped into this vein of European companies from from somebody that I know who keeps track in Europe, and it was, you know, 40 companies on there, I’d never heard of, and most of those, just my preliminary glance there 2017 2018 they were founded. So it’s exploding. And I think that can be a very good thing.

William 6:14
So what when you because you do a fair amount of consulting, and you’ve been in the industry for a long time you deal with a lot of heads of talent? See, HR owes a lot of IO psychologists. And I would assume the IO psychologists have a little bit different take on this. But when you’re doing with the TA folks in particular, how do you guide them in terms of the questions that they should ask around assessments? Like, like, how should see you know, how to how, you know, if they’re, if they never kind of came up that way, and they don’t understand assessments? What, what’s kind of the starting off period? Like, what were the were the jumping off period? What what? Yeah. Should they be asking of assessment vendors?

Charles 7:01
Yeah, well, you know, one of the jump, the real jumping off point for me is, don’t ask any assessment vendors, anything until you clearly know what, what it is you’re trying to do and what you’re shopping for. And so our consulting process, is, I don’t want to talk about vendors right now, I want to learn who you are, what you’re trying to do. So we go through a really thorough discovery process. And in that process, we will, because ultimately, William, it does typically come back to there’s a job or a family of jobs, where they need attention. It’s not usually, hey, we want to use assessment somewhere, somehow, we just don’t know how to get started. It’s much more, hey, our biggest volume position is experiencing, you know, changes in the labor force or changes in the strategy of how we’re using these people, or tons of turnover, one of the, you know, many reasons, assessment has value.

And, and so we at least have the ability on a discovery standpoint to, to be able to come in with a little bit of specificity. So we will actually, first I just say, Look, I’m a detective, I’m playing like, I’m a detective here, give me everything, give me your job descriptions, give me your training manuals, give me anything you’ve already done. In the realm of assessments, give me your performance tools that you evaluate with, give me your strategy documents for this, for this thing. And by the way, I want to act like a candidate I want to take, I want to apply for this job from beginning to end, I want to be interviewed, I want to look at the ATMs, you’re using any assessments, you use an already.

And then I want to talk to all the stakeholders who have have any kind of connection to this legal, it, HR, you know, performance management or development, training and development people, you just you just tell me, who needs to who I need to talk to you to learn about the holistic picture of what’s going on here. And and then out of that, we develop what I essentially call an assessment charter. And that assessment charter breaks down a bunch of what I call success parameters. So you know, to be successful in this program, here’s what you’re here’s what you’re generally looking for. And that’ll be that’ll be where we should probably put the assessment, what type of assessment, you know, what level of validation do you want? You know, how are we going to educate your stakeholders and do the the change management aspect of it. And that’s collaborative process. It’s not like I just, you know, go to the top of the mountain and chisel some stuff in stone and say, This is what you got to do. We talk about it and we end up all agreeing, like this is what we want to do.

And that gives you almost like a blueprint of what vendors so you can go from any possible vendor down to five or seven vendors. And then be able to, to look at it and I’ll be completely transparent. We have, we’ve always built custom assessments, but we, you know, we can actually help companies too. So when it’s appropriate, I’ll say, hey, and you should consider Rocket-Hire. Because we, we can build and deliver these things at scale. And a lot of times, that’s not appropriate. And so I won’t ask, and a lot of times, companies want to go to an RFP from there. Oftentimes, lately, we’ve said, you know, we’d rather compete for your long term business, we’re going to recuse from the RFP, let us let us be a competitor there. So you know, that’s, that’s an interesting dynamic, I think we can pull that off, because we’ve, we’ve been such good advisors, and we really have our clients best interests at heart, first and foremost. But that’s what happens that then we can go start talking to vendors and looking at vendors. That makes it.

William 10:57
100% 100%. So these are the three questions that I get asked most, as it relates to assessments, especially pre hire, but we’ll do some of the other. we’re placing where in the funnel, do we place the assessment and by job? So yes, again, not not all jobs are the same. So where do they place the assessment? Should? Second is that type of assessment, behavioral personality, etc. By job, you know, by by job? Is it? Is it different for a bank teller that I that I have versus the VP of finance, etc? Yeah. And the third one is, do should they standardize assessments across their candidates and employees? Like, should they use the same assessments to really understand kind of what they have inside for internal mobility reasons? Right, right. Right. Right. And I’m sure you get these questions, you know, non stop. If I’m getting em, you have to be.

Charles 11:58
Yeah, of course, you know, there’s no one answer to that, again, back to how we look at this. It all depends. I mean, it really depends. And that’s the total ethos of how I started this company was, or how I took our first kind of stab at our identity was, you know, back in one when we started and people would, people were asking me, well, what’s the best assessment? What’s the best assessment? And I’m like, Well, at that, you know, it depends on what you’re trying to do, you could have the best assessment in the entire world for a bank teller to your point, and you know, you’re going to use that for a die stamping machine operator, that’s, that’s not the same job. So that assessment is not necessarily going to be ideal there. So where to place it all depends to me on on volume is the number one thing, right? A high volume job where you just don’t have time to review every applicant and touch that applicant in any way with a person till you’ve got some reduction of the funnel. You want to put that thing right at the very top of the funnel, you know, um, in fact, sometimes we recommend a multi stage process, right? You can have that front end screen, but then your three finalists, okay, well, let’s put them through, you know, through kind of a Assessment Center exercise, where you’re giving them a day in the life of the job and seeing how they can perform, those are more expensive, more time consuming.

So you push those further down in the funnel, you know, and that’s, again, we look at everybody’s workflow, and we we say, based on what, who you are, and what you’re trying to do, this is where it goes. So where to place it anywhere, could be appropriate, just depends. One of the good news about that, where to place it question these days is, you see less and less companies charging you per test, especially at enterprise volume. So So for instance, us and many, like us, will just do an all you can eat, you know, for a certain number. And I don’t want people thinking that Oh, if we go bonkers sourcing are just doing all these great things to push people into the funnel, that we’re gonna have to pay for that by a cost per head of the assessment going way up. So we don’t want to use the assessment or, you know, maybe the assessments not a good idea for us. So making it approachable. And that’s another big trend in the industry is just making this stuff approachable from a cost perspective, but also from an implementation perspective.

So that’s that one type of assessment by job. Again, it just really depends. I will tell you, I am the biggest fan of what we call work samples or simulations of anything that where you ask an applicant to do something that looks like the job and it’s not answering a bunch of bubble questions, but it’s actually interacting. call centers are a great example. You know, a call center is very amenable to a screen, because that’s where the job takes place, right? So you can simulate customers calling in the databases you need to use, you know, the memorization and multitasking you have to do can all be simulated really well, other jobs aren’t as amenable to that. So, so there’s, there’s some scale problems with with that, but there’s, there’s some, it’s way more costly to build those. I mean, there’s a lot of downsides to it. But, um, you know, candidates really love, especially taking the candidate experience, lands in the teleport zone, a lot of really good research where, you know, year over year, their stuff shows, candidates love the opportunity to show their stuff in a relevant way.

So those simulations give people a lot of a lot of faith in the company that’s putting them out there a lot of like, hey, they’re really looking at what I can actually do relative to this job. So I like those kind of tools. But honestly, in my research study showed it, you know, we crunched the data from 250 vendors, the number one and two combination type of tests out there personality and cognitive, you know, nope, nope. No, da, right. I mean, basically, we know that’s the mainstay of the industry. And that’s like, 60, some percent of companies offering any kind of predictive hiring tool use personality, it’s probably the number one tool that’s used. That’s a whole nother podcast how I feel about that. But you know, that’s the that’s the most common one in cognitivism. Next, you know.

William 16:43
Before we move to the vendor portal because I want to talk a little bit about that. Is there any assessments that are out there that you would love to just eliminate? Like?

Charles 16:57
Oh, yeah, well, I mean, just

William 17:00
I mean, you know, you put your again, you get this more than I would but you know when people bring up Myers Briggs To me, it sends me into a kind of a shame spiral. I’m like,

Charles 17:12

William 17:13
Again, I don’t want to make fun of Myers Briggs per se. It’s just

Charles 17:17
Oh, I will. And it’s, well, it’s just misunderstood. I mean, it’s, it’s a cool tool. And I’ll say if, you know, I don’t know if you’re even aware of that documentary that just dropped on HBO max called persona. It is a adds another episode, I just did my podcast, I had the three IO psychologists that were featured in that documentary on my podcast, so that we could, um, rebuked some of the things that happen there. Anybody interested in, in hiring, testing should check out that documentary. But it doesn’t paint people who do what I do in a very good light, no spoiler, but but our spoiler, but MBTI is a big piece of it.

And it’s, it’s things like that, that create this misunderstanding that that’s a tool that’s made for hiring, it’s not, and it shouldn’t be used that way. So, I mean, that’s the number one thing that I really want to get to. And the other thing I don’t really like very much is assessments that give you a lot for almost no input. Right? Now, there’s a whole nother realm of AI based assessments where it’s all transparent. That’s not what I’m talking about. I’m talking about, here’s 20 adjectives check, which is like you not like you. And at the other end comes a phonebook of information about you, that you have to be, you know, trained to interpret that, that you just can’t, you can’t tell me that 20 responses, you’re going to be able to know this person inside out with, you know, with a co camera, whatever I’m trying to think of the name of, yeah, you know, what they shoved down either to look at your insides, you can’t, you can’t know that from 20 questions.

William 19:06
I’m sorry. No, it’s it’s the BuzzFeed, you know, what type of pizza slice are you? And yeah, it’s fun. It’s, it’s fun, but it has very little to do with the job or success at the job. Now, let’s get over to as a part of your research and looking at all these firms, you then started to document the firm’s, and look at kind of the both the technology and look at how the how they were validated, etc. So tell us, I mean, just walk us into the vendor research portal.

Charles 19:41
Yeah, well, it was COVID. For me, I’ll forever remember a dimension of COVID being the fact that you know, our business slowed down. So it’s kind of a blessing because I had the time to literally take it started because, you know, we’ve done these vendor databases before. They’ve always all you know, and this is an interesting, an interesting perspective or way to show you what’s happened in our industry. In the past man, I had 25 vendors, the last time we did it in like 2012, there are other vendors, but part of the, that was I’m not doing vendors that I don’t think are legit. And this one’s a little different. So I got a call from a big five consulting firm, you know, and they’re like, Hey, we’re, we’re looking at doing this stuff, we know, you maintain a database, you know, could you put together a database for us in two days that has, you know, the top 200 people or whatever it did, the project didn’t end up going.

But what happened was, I went into my files and said, geez, I’ve got like, 17 different spreadsheets with, you know, fragments of information about all these different vendors. It’s high time for me, especially that I have some time on my hands now, to really do this properly. And, and I know, from the seat of my pants, how this industry is growing, I want to know the details. So, you know, I built a coding system with the analysts at my firm, and we just started not only assembling all the lists I had, but looking at other lists, there’s a list out there. Sherm has a as I think, a free list of assessment companies you could look at. There’s, there’s other ways you could do it. And then of course, Google’s search, and then just asking people that I know, in my network, hey, you know, who’s the latest person that you’ve just heard of. So we compiled about 200. And then by the time we were three months from launch, I had 50, more, and I’m like, as a statistician, I’m like, that’s a, you know, 20% increase in my sample, I’m not gonna let that go.

So I’m gonna redo I’m going to add all these people. So it took us even longer, but did a pretty good deep dive, I’ll say that, I’ve been looking at this long enough that I can go to a website of a vendor and pretty much figure out who they are, what they do, and how they’re doing it pretty damn quickly. And part of that is just are these people legit in any way, shape, or form or not. And so I did that, but I did more than that. I had other folks at my firm as well, then we would, then we would dive into more web research, deep, deeper level of research, what we didn’t do, because we couldn’t do his interview each one of these 245 vendors, and you know, in the past, we would do a survey, and the vendors would fill out the survey, and that would populate their profile. One of the things I found from that William is it was all marketing, you know, you get back, just, you know, and nobody wants to just reread the same marketing crap, that sounds

William 22:44
We’re the industry leader and blah, blah, blah.

Charles 22:47
Yeah, no, optimized, you know, whatever. So, so, um, you know, you got to do that stuff, but it’s just doesn’t help. So, on my end, so we, you know, we did that we, we took a deep, deep, deep dive, I learned a lot about a lot of vendors I hadn’t heard of, I learned a lot about vendors that I had heard of, and I learned how vendors are positioning themselves in the market right now. And when you stack all that up into the trends report, which is kind of the aggregate level, you can learn, you can learn a lot, but you can also, if you’re interested in and I work with a lot of investors, and, you know, I’ll get the, hey, we’re looking for an assessment company to acquire because there’s been 47 acquisitions in the last five years of assessment companies, it’s, it’s the thing to do these days.

So we’re looking for somebody, three to $5 million in revenue, um, good science, been around for, you know, you know, over 20 years, what, what have you, um, you can go into this database and just use filters, like you’re shopping for shoes on Zappos, or something, and, you know, end up with a small list of companies that fit your target criteria. You could also do that if you’re, you know, a VP, Italian or whomever, and you’re looking to put a vendor in place, we didn’t go to the level of we’re going to list each of your individual products, because I would still be working on it now, if I did it that way. But But we categorize you know, we categorize them.

William 24:17
I was about to say, especially some of the very large assessment vendors are in the thousands.

Charles 24:22
Easy, easy. And when you get into skills assessments, it’s every computer language there is that kind of stuff. So, so we essentially kept it where you could say, I’m looking for a sales assessment, I’m looking for a customer service assessment, you know, those buckets, or I’m looking for a game or I’m looking for an AI interview or you know, that kind of thing. So there’s, there’s the ability to go in there and do that. And then for vendors, we figure Hey, do you want to know who your competition is? You want to know like, how, how they’ve positioned themselves. Most vendors have just be completely honest, most vendors don’t necessarily have to have me or my database are my firm’s database to do that, but I bet there’s some people you forgot. You know, we also created a taxonomy where we, we’ve taken this fragmented market. And we’ve given you a primary and a secondary categorization.

So, for instance, are you a solution provider? Are you? Are you a test that test development or publisher of tests? Are you a platform provider? Are you a specialist, those are our four areas, right. And then within each of those areas, you’ve got some sub areas. And that was a really fun part of this, honestly, is I built the model and then I just tried to prove it by throwing different vendors in there and seeing if I could make them work consistently. So you’ve got that too, you’ve got the ability to say, you know, this is the kind of vendor I want. Even nationality. Again, another thing we couldn’t do, what countries are these people actually selling tests. And that became very complicated, but I can certainly set it up. So you can tell what vendors are based in the Netherlands or what vendors are based in India, something like that, you know, and, and we found this is truly a global industry. That is, um, you know, we also did market size calculations. So we were able to get vendors, revenue projections and had some industry sources help us check those. And, you know, we added all that up.

And we could say, all right, this is the this is the, where we think this, you know, this industry is right now, and here’s the CAGR the compound growth that we’re looking at over the next five years. And since our report, in 2015, we didn’t crunch the vendor numbers, but we did provide some market estimates. So we’re just kind of tracking that growth, I think we’re somewhere around four and a half billion dollar market right now for this stuff, and you know, going to grow to six or seven by 2025, I think so I’m gonna read the report for the details I can’t remember offhand. But it’s a it’s a, it’s grown 20 some percent since five years ago, and it’s gonna continue to grow. And each individual drop each individual building block of vendor data helped us do that. But that’s the fun and cool thing about this is, you’ve got the most macro level perspective, but you can also dig into an individual vendor, and find out what an expert thinks about their science. What what our analysts outlook is on them for the coming years, you know, that kind of stuff.

William 27:38
So this is a living portal for the audience. It’s living in a census, the Charles and team are continuing to add, and they’re continuing to modify as as as more data comes in, and as more vendors come to market. So again, yet another great resource. The trends report is a great resource. The, the vendor, research portal is a great resource. And it’s an it’s a resource. If you’re thinking about buying any of these types of things. It’s just a great objective way to look at them, and discover what’s, what’s available to you, etc. But I would recommend that you call Charles and talk with him a little bit about before, whatever you purchase, just kind of get his take on whatever you’re going to do. And, and Charles, I just, I absolutely appreciate you carving out some time and talking about what you’ve done, because you carved out a lot of I mean, God only knows how many hours you put into the report itself. And also the portal. I mean, none of these things came about very quickly. So thanks for carving out time. And yeah, explaining everything to us.

Charles 28:54
Yeah, no, thanks for having me. You know, this, I’m, I’m just love exposing people to the fact that this thing exists. And I’m really passionate about what we do. And you know, we’ve always, you’ve always been a good friend to us, William enough. I’ve got a lot of good things like my own podcast, I’ve got you to thank for that, for making that suggestion. So, you know, we, we love working with you.

William 29:19
Well. Absolutely, everyone. Thank you for listening to the recruitingdaily podcast until next time, and thanks again, Charles.

The RecruitingDaily Podcast

William Tincup

William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.


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