INTRODUCTION TO PREVISOR

2010
BUSINESS OUTCOMES STUDY REPORT
Talent Measurement ROI:
The Proven Impact of Employment Testing
 Talent Measurement:
Organizational Response to Unprecedented Times

In 2010, the need for companies to demonstrate the business impact of their talent management programs is
critical. A recent survey1 of 230 talent management leaders from organizations around the globe revealed that 70%
felt pressure to demonstrate a return on investment from their assessment programs.

With the increased strain on leaders everywhere to find ways to do more with less, an effective talent measurement
strategy is critical to driving business outcomes across jobs and industries. Talent measurement, the assessment of
current or potential employees’ skills, abilities, knowledge, and competencies, provides companies with data to make
better talent decisions and ultimately help drive sustained business success.

To meet senior management’s increasing demand for quantifiable returns, talent measurement is becoming ever
more sophisticated. Successful organizations understand that recruiting, screening, and placement processes must
be linked to revenue and profit.

A strong talent measurement program supplies the data leaders need to make decisions about resource allocation,
process improvements, staff performance, and ultimately future company direction. With the right information
available, each and every hire and placement decision can contribute more towards the top and bottom line.

PreVisor’s fourth annual Business Outcomes Study Report provides concrete evidence directly connecting
employment assessments to business results. Highlighted studies from the 2010 report show:

• Increased collections revenue exceeding $170 million annually in the credit card division of a
financial services organization

•$
 45 Million in additional sales and a reduction in shrinkage of $8.3 million at an eyewear retailer

•G
 reater employee efficiency leading to 17 additional productive work days per year per employee
at a contact center for a leading healthcare organization

The findings in this report represent studies that PreVisor completed with client organizations both in the U.S. and
globally. These studies represent a wide range of industries, including financial and business services, healthcare,
retail, transportation, hospitality, and telecommunications. They also focus on a variety of job types including hourly,
professional, managerial, sales, and customer service. This report summarizes many key business results found, as
well as some important trends uncovered through analysis of all the studies. We are once again pleased to provide
you evidence of the value of talent measurement solutions for connecting employment decisions to business results.

1. Fallaw, S.S., & Solomonson, A.L. (2010). 2010 Global Assessment Trends Report. PreVisor.

2
INTRODUCTION TO PREVISOR
INTRODUCTION TO PREVISOR

PreVisor, the leading global provider of on-demand talent measurement solutions for employee selection,
placement, and development helps organizations connect employment decisions to business results. Following the
rigorous standards of industrial-organizational psychology, PreVisor’s assessment content accurately predicts on-
the-job performance and supports fair hiring practices. PreVisor’s solutions help streamline hiring, reduce recruiting
and training costs, and improve corporate performance for companies worldwide, including more than 100 of the
Fortune 500.

ROI metrics for one of our brands

show how an associate who scores
high on the sales component of
the assessment sells on average
$12 more per hour than someone
who scores low. Given a sales force
of 6,000 to 8,000, raising the
bar during recruiting significantly
impacts the bottom line.

Carol Spicer - Vice President Human Resources

Administration, Luxottica Retail

2010 PreVisor Inc. All rights reserved. 3

 A Note About Methodology

PreVisor conducts research studies in collaboration with its clients, evaluating the link between real-world outcomes
and a wide variety of hiring and placement decisions. These business outcome studies are designed to demonstrate
the value of online talent measurement solutions against metrics specific to the goals of each organization. PreVisor
first works closely with business leaders to identify key business outcomes. Sophisticated research strategies and
data analyses are then utilized to evaluate the link between these outcomes (e.g., sales, call time, revenue growth)
and the use of talent measurement solutions.

PreVisor adheres to rigorous scientific guidelines, ensuring reliable conclusions about the assessment
program are drawn from the results. These include:

• T est scores and performance data for a minimum of 300 people in each job are used in this research.

•E
 mployees must have been on the job long enough to provide a reliable measure of their performance in their
new role, beyond the initial onboarding or training period.

•R
 eliable performance metrics must be available, and these must be influenced by an individual’s behavior
on the job. Metrics include individual sales figures, goal attainment, revenue growth, and other standardized
productivity and efficiency measures.

•M
 ultiple measures of performance data must be available for each employee. PreVisor’s Optimization
Services Team conducts these studies using the scientific method, combined with business metrics, to
determine the true link between hiring decisions and on-the-job performance.

4 2010 PreVisor Inc. All rights reserved.

2010 BUSINESS OUTCOME STUDIES
INTRODUCTION TO PREVISOR

In 2009, 37 business outcome studies were conducted for clients across multiple industries, including financial and
business services, healthcare, retail, transportation, hospitality, and telecommunications. This data was compiled in
2010 for the Business Outcomes Study Report.

Overall, the analysis revealed:

• 81% of these studies had a favorable or very favorable outcome. This means that the
assessment solution had a strong and measurable impact on most or all of the firms’
performance metrics.

• None of the studies resulted in an unfavorable outcome. The remaining 19% of the business
outcomes were deemed to be neutral.

“We are once again delighted to have seen the dramatic impact that sound talent measurement programs have
had for our clients,” states Caroline Paxman, Chief Customer Officer, PreVisor. “Although the positive return from
assessment programs has been definitively proven throughout the years, the magnitude of the ROI continues to
escalate with the increase in program sophistication. PreVisor is dedicated to a partnership with our customers that
continues to push the envelope in driving the direct business results most correlated with their success.”

Aberdeen’s research revealed that on average, all organizations that currently use assessments
achieved improvements in quality of hire (17%), employee performance (18%), and productivity
(14%) over the previous year. However, clients of PreVisor have experienced higher performance
improvements than their counterparts.

PreVisor Clients Are Best-in-class among Pre-hire Assessment Users - Aberdeen Group, August 2009, p.7

2010 PreVisor Inc. All rights reserved. 5

 2010 BUSINESS OUTCOME STUDIES

FINDING 1
High-scoring collections agent workforce has potential to generate
additional $170 million in annual revenue.
Higher-scoring collections agents in the credit card division of a financial services
organization averaged over $14,000 more in monthly collections revenue. Across the
collections entire agent workforce, this increase amounts to over $170 million in additional annual
revenue collections revenue.
$170 Million/Year

FINDING 2
Healthcare organization connects 46% reduction in telenurse turnover
with almost $2 million reduction in recruitment costs alone.
At a healthcare organization, telenurses who earned high scores on a custom-developed
job fit assessment had 46% lower turnover. Over the course of a year, this translates into
Staff Turnover $1.8 million in recruitment and hiring cost savings.
46% Less Likely

FINDING 3
Customer retention team at telecommunications organization
“saves” $55 million.
High-scoring customer retention agents in a telecommunications organization retained
significantly more customers compared to lower scorers. High-scoring employees retained
Retained $65,000 more in revenue, on average, each year. Across the entire workforce, this results in
$55 Million/Year $55 million in retained revenue.

FINDING 4
Eyewear retailer focuses on $45 million higher sales and more than
$8 million reduction in shrinkage.
At an eyewear retailer, high-scoring sales associates averaged $12 more per hour in customer
sales. Across the entire workforce, this amounts to $45 million annually. In addition, stores
shrinkage that employed more high-scoring employees experienced substantially lower shrinkage
$8 Million/Year compared to stores with lower-scoring employees. Across the entire organization, the impact
would result in a savings of $8.3 million.

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 2010 BUSINESS OUTCOME STUDIES
INTRODUCTION TO PREVISOR

FINDING 5
Senior sales professionals at computer equipment organization achieve
22% higher sales plan percentages.
At a computer and office equipment organization, business-to-business sales professionals
who earned high scores on a senior-level sales assessment solution achieved on average 22%
sales higher attainment against their sales plans. In addition, when sales leaders were asked to
22% Increase evaluate the performance of these same professionals, high scorers were twice as likely to be
evaluated as a strong fit for their job, twice as likely to be evaluated as “definitely would
re-hire,” and three times as likely to be viewed as fast starters.

FINDING 6
High-scoring customer service agents add 17 more productive days per
year while scoring 34% higher on quality.
High-scoring agents at a healthcare call center made 62% fewer errors when interacting with
customers, were 34% more likely to meet their quality goals, and handled calls 25 seconds
Productive faster, on average. This greater efficiency results in over 950 more calls handled per year
Days per agent, which translates into an additional 17 days of productivity per year for each high-
17 Additional/Year scoring agent.

FINDING 7
Customer services associates at a health products retailer are more
engaged and offer 63% better sales performance.
At a health products retailer, customer service associates who earned high scores on an
assessment containing a realistic multimedia job simulation were 63% more likely to be
sales judged as having high sales effectiveness and two-and-a-half times as likely to be viewed as
effectiveness possessing traits that matched the job requirements. In addition, high-scoring associates were
63% Increase nearly three times as likely to report being highly engaged in their role.

FINDING 8
Automotive parts retailer’s high-performing sales force expected to drive
additional $120 million in sales annually.
At an automotive parts retailer, higher-scoring sales associates averaged $20 more in
sales per labor hour compared to low scorers. Translated across the entire sales associate
annual sales workforce, consistent and systematic use of the assessment would result in $120 million in
$120 Million/Year additional annual sales.

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 Demonstrated Value Across Outcomes,
Jobs, and Industries

Since 2007, PreVisor has documented over 130 business outcomes.2 With experience in most industries for most jobs, we
are able to demonstrate the impact of talent measurement across a multitude of different business outcomes identified
as most important to our customers. The table below provides a sample of the key business results they have achieved.

Year of
Category Outcome Job Industry
Report

$120 Million in additional overall sales Sales Associates Retail 2010

$170 Million in additional collections revenue Collections Agents Financial Services 2010

$55 Million retained by Save Team Customer Retention Agents Telecommunications 2010

Increasing $42 Million in additional overall sales Sales Managers Retail 2009
Revenue
$270 Thousand per salesperson in
Sales Associates Retail 2008
additional sales

Business Process
107% more likely to convert sales calls Outbound Sales Associates 2008
Outsourcing

44% increase in collecting outstanding debt Collections Agents Financial Services 2008

$1,000/Day increase in sales per agent Reservation Agents Hospitality 2007

$18 Thousand additional revenue annually

Outbound Sales Associates Telecommunications 2007
per agent

46% reduction in turnover Telenurses Healthcare 2010

$2 Million saved from reduction in repeat

Broadband Technicians Telecommunications 2009
service calls

Business Process
23% reduction in turnover Call Center Agents 2009
Reducing Outsourcing
Costs
83% reduction in turnover Reservation Agents Hospitality 2009

31% reduction in turnover Call Center Agents Insurance 2008

$78 Million in reduced shrinkage Store Employees Retail 2007

50% reduction in turnover Production Workers Retail 2007

63% reduction in turnover Call Center Agents Telecommunications 2007

driving 300% higher performance ratings Frontline Managers Transportation 2009

leadership
effectiveness 57% more likely to be promoted Branch Managers Financial Services 2009

8% higher sales and profit Territory Managers Retail 2009

Driving 59% higher employee engagement Branch Managers Financial Services 2009
Leadership
Effectiveness 30% more likely to be promoted Senior Management Healthcare 2007

2. Previous Business Outcomes Study Reports may be downloaded online at www.previsor.com/resources/reports

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 Demonstrated Value Across Outcomes,
Jobs, and Industries
INTRODUCTION TO PREVISOR

Year of
Category Outcome Job Industry
Report

34% more likely to meet quality goals Call Center Agents Healthcare 2010

$4 Million realized from improved work

Logistics Retail 2009
efficiency

18 additional days of productivity, per Business Process

At-home Agents 2009
Improving employee annually Outsourcing
Efficiency
Business Process
and 35% reduction in average handle time Call Center Agents
Outsourcing
2009
Quality
18% more effective and 29% more likely to
Claims Adjusters Insurance 2008
hire again

43% more likely to pass Series 6 Exam Insurance Agents Insurance 2008

8% more calls completed Call Center Agents Telecommunications 2008

40 second reduction in average handle time Call Center Agents Telecommunications 2007

Organizations like the ones above have consistently realized significant business outcome results through the use
of effective talent measurement programs. From increased sales and retention to improved overall efficiencies and
leadership effectiveness, most companies who use assessments and measure the outcome realize a dramatic impact to
the bottom line. And with some of the same organizations optimizing their programs over time, they have shown that even
small enhancements to an existing talent measurement program can lead to even more impressive results.

Business outcome studies are one of the best, if not the best, ways to translate
the efficiencies gained from talent management processes into actual profits for
a company. For example, our business outcome study helped us to determine the
financial impact of a new hiring process resulting from reduced turnover and increased
sales. Using the results of the business outcome study, we were able to calculate a
profit gain of roughly $24 million on an investment of just over $100,000.

Michael Blair - Manager, Strategic Staffing Leader, CenturyLink

2010 PreVisor Inc. All rights reserved. 9

 Employment Testing: The Future State

Although objective talent measurement solutions have come a long way in just the past few years, we
expect several trends to impact the mission critical activity of “finding the best candidate for the job.”

Quality of hire takes center stage

Not surprisingly, economic events in 2009 forced organizations to take a harder look at the talent management
programs and processes they had in place to uncover opportunities to cut costs and drive revenue. PreVisor’s
2010 Global Assessment Trends Report, a survey of over 230 talent leaders from around the world, revealed that
approximately 70% of companies feel pressure to show a demonstrable business impact of the assessments they use,
with quality of hire being the most common business outcome (85%) that companies seek to improve. This represented
nearly double the amount of respondents concerned with efficiency-related metrics like cost of hire and time to hire
(45%). Astute leaders want more than just ease of use and reduction of time and resources spent on hiring strategies –
they want “quality of hire” metrics and proof.

It’s time to look within – assessing the employee base

Employment testing has predominantly been used as a tool for screening candidates during the pre-hire phase of the
employee life cycle. Again, due to economic events in 2009, organizations have changed their talent management
strategies by putting a greater emphasis on their existing employee base. As reported in PreVisor’s 2010 Global
Assessment Trends Report, managing the performance of the current workforce has become the number one priority
for HR, replacing external recruiting/hiring, which had been the top priority prior to the economic downturn. More
and more organizations are using assessements to make better decisions about how to effectively deploy, train,
and develop their employees. Kevin Martin, Vice President and Principal Analyst for Aberdeen’s Human Capital
Management research division, predicted the need for, and continued emergence of, post-hire assessment as an
organizational best practice two years ago. The companies that embraced his vision before the economic downturn
have a head start on the majority of organizations who are just now instituting post-hire talent measurement programs.
We expect this trend to continue over the next several years until talent measurement of the employee base becomes
the norm rather than the exception.

Whole-person assessments becoming the standard?

Last year in the 2009 Business Outcomes Study Report Future State section, we noted our observation of an increase
in use by organizations of “whole-person assessments.” Whole-person assessments employ a variety of different
assessment methods that specifically target those characteristics of the candidate (behavior, ability, skills, and traits)
that are most relevant for achieving critical business outcomes, and have been demonstrated to be more predictive
than tests that isolate a single competency. We continue to closely monitor this trend, but a particular data point
suggests it is emerging into a standard. In a study conducted in Q1 of 2010, PreVisor evaluated the tests administered
by 137 new clients who had equal access to whole-person assessments and assessments that measured a single
competency. Over 50% of the tests administered by these new clients were whole-person assessments. Considering
this type of test has only been commercially available for the past few years, this is truly an intriguing development.

10 2010 PreVisor Inc. All rights reserved.

Employment Testing: The Future State
INTRODUCTION TO PREVISOR

Increased demand for self-service from small and mid-sized organizations

Just like Fortune 500 corporations, small to mid-sized businesses struggling during the economic recovery are looking
for cost-effective ways to leverage technology for efficiency improvements. Although not yet mainstream, assessment
platforms designed to enable clients to search through a comprehensive library of assessments covering most jobs in
most industries, select and administer the desired tests, and purchase tests with a credit card as you go, are gaining
momentum. PreVisor has served over 5,000 self-service clients to date in the small to mid-sized business arena, and
we consider this to be one of the largest untapped markets for talent measurement – certainly in regard to the sheer
volume of potential clients. We believe that technologies designed to support remote testing, (see Computer Adaptive
Testing in the sidebar feature, 21st Century Assessments: Innovation through Technology, on page 11), comprehensive
off-the-shelf assessment libraries (including whole-person approach assessments), and easy-to-use assessment
platforms will continue to drive the demand for self-service assessments for small and mid-sized organizations for the
foreseeable future.

Assessments – bigger, stronger, faster

We have come a long way from the days of paper and pencil testing. Today, remote (unproctored) testing over the
internet has not only become more popular, but for many organizations it has become the norm. Furthermore, whole-
person assessments (see trend on page 9) provide a more predictive indicator of the candidate than any standalone
assessment, while computer adaptive testing (CAT) provides a more efficient and secure method for administering tests
over the internet. Combine these 21st century advancements with the realistic job preview capabilities offered through
simulation, and the assessments offered today are unrecognizable from assessments of only five years ago. It has
never been easier or more effective for organizations to leverage assessments to drive their most important business
outcomes. A more detailed account of assessment innovations can be found in the sidebar feature, 21st Century
Assessments: Innovation through Technology, located on the next page.

2010 PreVisor Inc. All rights reserved. 11

 21st Century Assessments:
Innovation through Technology

As noted in the last trend from the prior section, today’s assessments are dramatically more sophisticated
than those available just a few years ago. A variety of trends and innovations are influencing how assessments
are developed and implemented by organizations. These include innovations in multimedia and psychometric
assessment technology, more widespread development of job-specific fit assessments, easier access via online test
catalogs, and increasing sophistication in the way organizations use assessments. Most of the results you see in
this year’s report come from organizations leveraging these new technologies to ensure more efficient, secure and
predictive results.

Multimedia Simulations
One of the more prominent recent trends is the greater availability and use
of multimedia assessments meant to realistically portray the actual work
performed in a particular role. Examples include assessments simulating
interactions with customers, or in the case of managerial assessments,
interactions with employees. These simulations tend to be media-rich,
utilizing audio, video, and even animation-based scenarios designed to mimic
actual job situations and draw out characteristic responses from applicants.

In the past, some organizations have been reluctant to adopt multimedia

assessments based on concerns around internet connectivity and bandwidth.
Yet, broadband internet has become so widespread in recent years that most
organizations have encountered few if any problems implementing high-
tech assessment solutions. For instance, a financial services organization
recently replaced an in-person role-play assessment with a video-based
online coaching skills simulation—and has reported virtually no issues with
candidates accessing or completing the assessment from remote locations. Similarly, a call center organization
recently compared candidate experiences both before and after implementation of a customer care simulation
and did not find any increase in the percentage of candidates encountering problems while taking the
assessment or having to go to a secondary location (i.e., outside of their home) to complete the assessment.

Why use multimedia simulation? Answer: The positive impact on the candidate experience. These assessments
immerse candidates in a realistic “day in the life” simulation of actual job activities. Candidates completing
these simulations are more likely to agree that the assessment measured relevant characteristics and abilities.
Candidates also tend to rate the instructions provided during multimedia assessments as easier to understand.

Computer Adaptive Testing

Computer adaptive testing (CAT) measuring cognitive ability and personality characteristics are another major
innovation in assessment. CAT differs from traditional assessments because they actually tailor themselves to
an individual candidate. As the candidate answers questions, the test engine actively “learns” from the pattern
of responses and selects subsequent questions from a large item bank. During the assessment process, the test

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21st Century Assessments:
Innovation through Technology
INTRODUCTION TO PREVISOR

administers new sets of questions to the candidate based on its continuously updated estimation of his or her
trait standing. By matching the type of questions presented to the candidate’s trait level, the assessment offers
more precise measurement and shorter completion time. Lower administration time is a primary advantage of
CAT, permitting the use of more scales without increasing overall assessment duration and without impacting
accuracy.

A second important benefit of CAT is the likelihood that assessment questions will be shared, copied, or
otherwise compromised is greatly reduced. Because the test presents different questions to individual
candidates, there is a much lower likelihood that it will be compromised, a particularly important consideration
for cognitive tests that have right-or-wrong answers.

Job Fit
Another recent trend is the increasing use of job-specific fit assessments. These scales are specially designed
to predict performance and turnover in a given job role by evaluating the specific interests, cultural factors, and
environmental features that must be held or adapted to be successful in a particular position. One example of
this is a remote work potential scale, designed to determine the likelihood that a candidate will be satisfied and
effective in a role that involves telecommuting. Higher-scorers are more likely to be independent, responsible,
and have accurate judgments about how to best configure their individual work environments to allow them to
be productive without creating conflicts between their work and home lives.

Recent Trends and Innovations in Assessment

Trend Impact
Multimedia •G
 reater realism in the assessment process, providing an accurate portrayal
assessments of job demands
•E
 nhanced acceptance from recruiters, hiring managers, and other
stakeholders
•M
 ore favorable candidate reactions

Computer •F
 aster, more precise assessment of relevant traits
adaptive testing •A
 bility to measure more characteristics without increasing assessment
duration
•R
 educed exposure of test content and lower risk of compromised
assessments

JOB- AND CULTURE- •M

 easurement of interests and compatibility with cultural expectations
SPECIFIC TESTS or environmental factors

2010 PreVisor Inc. All rights reserved. 13

 CONCLUSION

In today’s environment, demands on organizations to prove their worth are higher than at any point in decades.
With pressure on leaders everywhere to find ways to do more with less, an effective talent measurement strategy
can be the key to driving business outcomes across jobs and industries. Leading organizations will leverage the
advancements in both the predictive nature and operational efficiencies offered in today’s pre- and post-hire
assessment programs to ensure they have the right workforce in place to drive their bottom-line results.

“We have been fortunate to be able to partner with best-in-class organizations who not only understand the inherent
value of a robust talent measurement program, but who have also been able to realize significant positive impact,”
states Noel Sitzmann, PreVisor CEO. “We look forward to the continued opportunity to serve our customers and
enable their success by providing talent measurement instruments that will drive the greatest return on
their investment.”

As a global entity, Xerox draws from the talent and

skills of all our professionals. That’s why we set out
to identify a partner that could help us create an
assessment tool to find more of the exceptional talent
that makes our company what it is today. We look
forward to a follow-up business outcome study, which
will give us an opportunity to fine-tune the assessment
for even better predictive results.

Martin A. Spokony - Recruiting Manager,

Talent Acquisition, Xerox Corporation

14 2010 PreVisor Inc. All rights reserved.

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