Goldman Sachs plans to begin using a personality test as part of its hiring process in several divisions like banking, trading and finance, and some see this as one of the ultimate ways to figure out what makes prospective candidates in the industry tick.
“I kind of view it as the holy grail. Can we figure out what makes great traders great?” Doug Hirschhorn, a performance coach for financial firms and the author of “8 Ways to Great,” told CNBC on Thursday
Hirschhorn likens the personality testing process to “‘Moneyball’ for hedge funds, or ‘Moneyball’ for the financial industry,” referring to the 2003 book by Michael Lewis (and subsequent film of the same name) chronicling the efforts by Oakland Athletics general manager Billy Beane to build a winning team by using mathematical rigor to find and hire undervalued players.
In the past, the concept of how to measure the best possible man or woman for the job has been somewhat challenging given the lack of research and lack of attention “from a sample-size perspective,” Hirschhorn said. Such a “personality” test has some value to it, he said on “Trading Nation,” but offered a laundry list of the pros and cons around this type of assessment.
For example: Some top institutions search for the top talent, the cream of the crop, but have an unusual “filter process,” he said, like going to top-ranked schools and essentially ending up with the same handful of people from the same schools. Of course, this has been proven to be not only a phenomenon in finance. At this point, all Supreme Court justices, including the newly confirmed Neil Gorsuch, attended Ivy League schools.
By administering some kind of standardized assessment tool, Hirschhorn argued, companies can cast a wider net across a larger population. Plus, it may cost less than conducting on-site interviews that might be more typical.
Yet “one of the big cons is that you’re labeling people. You’re actually going to put people into a box,” he said, warning of something throughout this process he calls “faking good.” Essentially, applicants may alter their responses in these personality tests based upon what they think the company wants from them, as opposed to what their real personality may reflect. Another con with personality tests may be that test anxiety sets in and throws off applicants.
For applicants, Hirschhorn advises them to “take the test or the interview as if you’re trying to get the job. You want to make sure that you understand the job and that it fits your personality. Many, many times when I do interviewing processing for organizations, I’ll tell the people, look, they’re interviewing you, but really, you’re interviewing them. It’s your decision to join the organization and you have to decide if it’s the right fit for you based on what you know.”
Reuters reported that Goldman Sachs will begin piloting the personality test on U.S. summer intern candidates who would be starting in 2018. The bank reportedly last year also made other efforts to identify strong candidates who may not be from Ivy League schools by opting for first-round interviews via video platform instead of on college campuses.
“We’re shifting from a world where you just used to look at a GPA and resume and walk out with a feeling about an individual that you might want to hire,” Matt Jahansouz, the investment bank’s global head of recruiting, told Reuters. “We can now capture characteristics and data that might not be as obvious to make smarter hiring decisions.”
Source: Investment Cnbc
How Goldman Sachs is pursuing the ‘holy grail’ of hiring