Maximizing ROI: How Skills-Based Testing Transforms Hiring Outcomes for HR Professionals

For a company to be successful, you must employ high quality individuals. These employees need to be motivated for both the continual improvement of themselves and the company. Hiring the right talent has always been a cornerstone of organizational success.

Over the years this process has become more complicated because of the following realities:

1. Too many applicants, too few jobs – With the advent of remote working and the slowing down of the economy every job posting is flooded with applicants. This makes it difficult if not impossible to sort and sift through everyone that has applied. Often the best candidates are not even considered because they were not in the first batch to apply.

This problem has gotten worse over the years. The pace of applications outpacing hiring demand grew four times faster in 2024. This situation could become more pronounced if job growth slows down or unemployment edges up in the U.S. and globally. (Workday)

2. AI-generated resumes – According to CNBC, two thirds of job applicants are using artificial intelligence to ensure that their resumes align with the job posting. If AI is used ethically this would not be a major problem. However, job applicants often inflate their qualifications in hopes it gets them that valued interview.

3. Candidate Fraud – Some candidates desperate for a job are using AI to cheat during interviews to make it seem that they are far more qualified. In a recent article, Persona cited a Gartner report that by 2028, twenty-five percent of job applicants will be fake. Even worse, Nearly half of Americans (44%) confess to being dishonest during the hiring process, according to SSR.

Traditional hiring methods are not able to meet the challenges facing hiring managers, and the impacts on a company are severe.

The U.S. Department of Labor has reported that the cost of a bad hire can equal up to 30% of the position’s annual salary (Business.com). This expense does not even begin to cover the intangible costs that include:

• Time and resources of lengthy hiring process
• Impact on company’s culture
• Impact on co-workers’ mental health and stress
• Organization’s productivity
• Company’s reputation
• Time and opportunity loss to redo work

Companies have been struggling with ways to combat these growing trends and the negative impact that they impose upon their business.

Enter skills-based testing and assessments – This is a transformative approach that ensures candidates are objectively evaluated based on their actual abilities, not just their resumes. Skills-based tests measure job-specific skills allowing companies to avoid the direct and indirect costs of a bad hire.

This article is part one of a two-part series.

In part one, we will be addressing how skills-based testing and assessments address hiring inefficiencies, achieve better outcomes, and produce a significant return on investment (ROI).

We will also address the reality that not all skills-based testing platforms are created equal. The industry is littered with assessment platforms with limited capabilities. They have predefined tests that are generic to fit a broad range of job descriptions. They are incapable of meeting the needs of most employers.

MTestHub is the first AI-powered, full-funnel, skills-based, automated hiring platform. The platform uses AI to screen, shortlist, test and assess candidates. MTestHub uses AI to create a skills-based test for any industry, job description, or specific job skill.

Skills-based testing and assessment means you never will interview an unqualified candidate again.

In part two, we will show you the formulas that you can use to see how much your ROI would be if you adopt a skills-based testing and assessment platform.

Since MTestHub is a full-funnel hire platform we will also showcase the additional ROI that you can achieve through our AI-powered screening, shortlisting, and interviewing capabilities.

We want you to have all the information to justify the implementation of a state of the art hiring process.

The Case for Skills-Based Testing in Today’s Hiring Landscape

The traditional hiring process relies heavily on resumes, cover letters, caliber of school attended, and unstructured interviews. All of these methods are very inefficient.

In a LinkedIn article, Keystone Talent Group reported that 89% of bad hires lack the necessary hard or soft skills to succeed in their roles, despite their resumes often looking impressive at first glance.

Skills-based testing flips the script by focusing on what candidates can do, not just what they claim to have done. These assessments evaluate applicants on the core competencies required for the role, enabling HR professionals to make more informed decisions.

By cutting through the noise of embellished resumes, skills-based testing ensures that only qualified candidates move forward to the next stage of the hiring process.

While some skills-based testing platforms are designed to be used at the final stage, MTestHub is used to help screen candidates before you begin interviewing anyone. It saves countless hours interviewing candidates who are unqualified for the role.

Finding the perfect candidate is hard enough so companies should not waste time or risk hiring a person using traditional hiring methods.

Skills-based testing addresses three critical pain points: cost savings, better quality hires, and reduced time-to-hire.

1. Cost Savings: Reducing the Financial Impact of Hiring Mistakes

The High Cost of Bad Hires

The financial implications of a bad hire are well-documented. Beyond the direct costs of recruiting and onboarding, organizations also face lost productivity, decreased team morale, and potential damage to their reputation.

In 2017, CareerBuilder conducted a survey that found, 74% of employers admit they’ve hired the wrong person for a position, with each bad hire costing an average of $14,900.

By incorporating MTestHub’s skills-based testing early in the recruitment process (before the interviews), HR professionals can prevent bad hires before they happen. Our assessments provide a data-driven evaluation of candidates’ abilities. Our anti-cheat features prevent applicants from cheating on the tests.

Lower Turnover Rates

Employee turnover is an inevitable part of business, but it’s often also a significant expense. A bad hire often results in premature turnover, adding to recruitment costs.

Work Institute analyzed 120,000 exit interviews and revealed 75% of employee departures in 2025 were preventable. While that study did not address the reasons for those departures, another study by CareerBuilder reported that 68% of bad hires resulted because there was a mismatch between the skills of the person and those of the job requirements. Skills-based hiring solves this mismatch and eliminates the need to terminate those individuals.

Streamlined Resource Allocation

Recruiting can be a drain on organizational resources, particularly when HR teams spend time and money interviewing candidates who lack the required qualifications. Skills-based testing narrows the applicant pool to only the most capable candidates, allowing HR teams to focus their efforts where they’ll have the greatest impact. This translates into significant cost savings over time.

According to LinkedIn's Global Hiring Trends Report (2024), organizations using skills-based platforms save an average of 30% on recruitment costs compared to traditional methods. (SoftwareOasis)

2. Better Quality Hires: Building a Workforce That Delivers Results

Objective Evaluation Over Subjective Bias

One of the greatest challenges in hiring is overcoming unconscious bias. Traditional methods, such as resume screening, often favor candidates with prestigious education backgrounds or recognizable company names, even if these factors don’t correlate with job performance. Skills-based assessments level the playing field by focusing on objective criteria—what candidates can actually do.

Don’t be fooled, unconscious bias has a real financial cost.

• Disengagement Costs: Employees who believe their company has hiring bias are more likely to be disengaged. The Gallup State of the Global Workplace: 2024 Report stated that disengagement costs the global economy $8.9 trillion, or 9% of the global GDP.

• Retention Costs: A McKinsey report found that women who experience bias in the workplace are 2.7 times more likely to leave. Losing quality employees not only disrupts growth but leads to the cost of rehiring and training new people.

• Innovation Costs: According to a 2020 study by Coqual, employees who perceive bias are 2.6 times more likely to withhold ideas and market solutions which can kill your competitive advantage.

• Bottom Line Costs: Another McKinsey study found that companies who were in the top in the top quartile for diversity were 39% more likely to financially outperform companies in the bottom quartile. When you hire based on skills rather than unconscious bias, you have a more diverse workforce.

Tailored Assessments for Specific Roles

Skills-based testing can be customized to evaluate the exact competencies required for a role. Whether it’s coding challenges for software developers, writing tests for content creators, or situational judgment tests for customer service representatives, these assessments ensure that candidates are evaluated on the skills that matter most. This leads to higher-quality hires who are better equipped to excel in their roles.

Enhancing Team Performance

Hiring individuals with the right skills has a ripple effect on team performance. When employees are competent and confident in their roles, they contribute to a more productive and cohesive work environment. Over time, this translates into better business outcomes and higher employee satisfaction.

3. Reduced Time-to-Hire: Streamlining the Recruitment Process

Faster Screening and Shortlisting

Time-to-hire is a critical metric for HR professionals, particularly in competitive industries where top talent is snapped up quickly. Skills-based testing accelerates the early stages of recruitment by automating the screening process. Instead of manually reviewing hundreds of resumes, HR teams can rely on assessment results to quickly identify the most qualified candidates.

All too often, the number of applicants simply overwhelms the hiring team. They are forced to either stop accepting applicants or ignore those beyond a certain number. The most qualified candidates are not necessarily the first to apply. This means the most qualified candidate is never even considered for the position.

What is the economic impact of not hiring the most qualified person? The better question is - how do you remedy this?

MTestHub is unique as it is the only AI-powered full-funnel skills-based hiring automation platform that also uses AI to screen and shortlist candidates. It can screen and shortlist thousands of applicants in mere seconds. You never have to worry that the most qualified individual was left out of consideration.

The AI-powered screening and shortlisting also means that you can get through the hiring process quicker.

According to the Society for Human Resource Management (SHRM), the average cost-per-hire is $4,129, while the average time it takes to fill a given position is an astonishing 42-days.

You could quickly reduce hiring costs and the time it takes to hire by using MTestHub.

Fewer Unnecessary Interviews

Interviews are one of the most time-consuming aspects of hiring, often involving multiple rounds with various stakeholders. Skills-based testing minimizes the need for unnecessary interviews by providing a clear picture of each candidate’s capabilities upfront. This allows HR professionals to focus their time on interviewing only the most promising candidates, reducing the overall time-to-hire.

Interviews are time consuming and costly. Many companies first screen 10-15 candidates and from that list schedule 45 minute first round interviews with 5-6. From there the list is narrowed down for second or third interviews.

Besides the actual time spent conducting the interviews, the administrative time to schedule them adds up quickly.

What is even harder to take is that often unqualified candidates slip through and you waste time and talent with individuals who simply cannot do the job.

MTestHub solves this problem and ensures that you NEVER have to interview an unqualified candidate again. Our process conducts the skills-based testing before you decide who you want to interview.

Our automated interview scheduling process eliminates the administrative hours needed to schedule them.

When it may take 50 plus hours (conservatively) to review resumes, screen candidates and conduct interviews, MTestHub pays for itself in time savings alone. (RFS)

Improved Candidate Experience

A lengthy and disorganized hiring process can deter top talent from pursuing a role. Skills-based testing streamlines the recruitment journey, creating a more efficient and transparent experience for candidates. This not only enhances the employer brand but also increases the likelihood of securing high-quality hires.

MTestHub is the ONLY AI-powered full-funneled skills-based automated hiring process that covers the entire process.

Conclusion: HIRE BETTER - FASTER

HR professionals are under increasing pressure to deliver results. Skills-based testing offers a smarter, more efficient way to hire by reducing costs, improving the quality of hires, and shortening time-to-hire. Backed by compelling data and real-world success stories, this approach is not just a trend—it’s the future of recruitment.

MTestHub stands alone as the ONLY AI-powered platform that ensures your entire hiring process is optimized to reduce time and expense. It ensures that you will NEVER interview or hire another candidate who is not qualified for the position.

If you are looking to learn the ROI and benefits your company can achieve by implementing MTestHub, come back to read our next blog in this series.

Better yet, contact us and we will give you a white-glove experience that begins with analyzing your specific needs and program.