Now Affordable at a Location Near You: Simulation-based Assessments

Think simulation-based assessment is too expensive for your organization? Think again. A series of technological and business developments has reduced costs by over 80 percent.

A legacy of expensive perceptions

Most selection professionals agree that simulation-based assessment is a powerful way to improve an organization's talent acquisition process. However, the technique is often perceived to be prohibitively expensive and many proposals for using simulation are dismissed before they are seriously considered.

For example, in 2011, Neil McPhie, Chairman of the United States Merit Systems Protection Board, in his cover letter to the President, accompanying the report “Job Simulations: Trying Out for a Federal Job (http://www.mspb.gov/netsearch/viewdocs.aspx?docnumber=452039&version=453207),” wrote:

"We define job simulation as an assessment that presents applicants with realistic, job-related situations and documents their behaviors or responses to help determine their qualifications for the job. … Simulations can do a better job of predicting which applicants will perform well on the job than many other commonly used assessments, and they can provide a greater degree of fairness in the process. However, their potentially high development cost is a key drawback."

More affordable today than you think

It turns out that Mr. McPhie was only half right, at least in how his statement applies to the future. Certainly in the past, simulations were expensive to develop. However, today, a perfect storm of technological developments, business dynamics, and enterprising entrepreneurs have made simulation-based assessment affordable for nearly every organization.

1. Companies like HR Avatar offer off-the-shelf simulation-based pre-employment tests at prices that are more than competitive with current offerings of their legacy testing competitors.
2. We estimate the cost of developing custom simulations is less than one fifth what it cost only ten years ago - a drop of over 80 percent!

Virtually any company can access off-the-shelf simulation-based assessments without breaking the bank. Companies that currently offer off-the-shelf simulation-based assessments include:

• HR Avatar (http://www.hravatar.com) - 200+ job-specific pre-employment simulations
• FurstPerson (http://www.furstperson.com) - Call center and related customer-contact simulations
• Employment Technologies (http://www.etc-easy.com) - Call center and related customer-contact simulations
• CEB SHL Talent Measurement (http://ceb.shl.com) - Call center and first-line management simulations

In general pricing for off-the-shelf simulation-based assessments is equal to or lower than text-based competitive products. For instance, HR Avatar's pricing for simulation begins at $19 USD a test and goes down from there (with volume).

Of course, the factors underlying the affordability of both off-the-shelf and custom assessments are the same. We'll review these next.

The drivers of cost reduction

Year	Event	Outcome
1950	Manual assessment centers appear for business use.
1985	Video and images can be presented via personal computers using proprietary hardware solutions.
1988	PC-based applications perform training and assessment using a simulation model, many still with proprietary hardware solutions.
1990	Client-server applications allow for LAN-based training and assessment simulations using software solutions.	LAN-based model allows for easier deployment to larger numbers.
2000	Proprietary browser plug-ins enable Internet-based simulations for training and assessment.	Greatly simplifies client-side implementations.
2004	Broadband Internet becomes more prevalent.	Eliminates the need for local LAN installation.
2006	Adobe Flash becomes a ubiquitous plug-in that supports both video and animation.	Eliminates the need for proprietary plug-ins
2008	Introduction of professional-quality, consumer-priced 2D and 3D animation software.	5X reduction in cost of animation production.
2009	Introduction of professional quality, consumer-priced video equipment and editing software.	5X reduction in cost of video production/editing.
2009	ClicFlic introduces online simulation-authoring software.	Eliminates the need for software programmers. 3X reduction in costs to develop simulation software.
2010	HTML5 Standards enable interactive video on mobile and desktop devices without plug-ins.	Eliminates the need for any plug-ins.
2012	Smart phone and tablets computers become the dominant Internet access platform, particularly for younger generations. Touch screens optimized for touch and media presentation rather than mouse point and click.	Due to lack of plug-in support, this change makes it impossible to test with legacy plug-in software.

Reviewing the timeline, we see that, compared to 10 years ago, today's simulation developer:

• Doesn't need ANY software programmers to build the simulation.
• Doesn't need to worry about any proprietary or specialized software installation on test-taker computers or mobile devices.
• Can create and edit animations using consumer software for less than one fifth of cost.
• Can produce and edit video using consumer equipment and software for for less than one fifth the previous cost.

Seen from a different angle, the technologies and capabilities introduced on the timeline make it possible for a small number of medium-skilled staff to do the necessary work with a set of low-cost tools, which was once the domain of highly skilled experts and their expensive equipment and tools.

Conclusion

First, off-the-shelf simulation-based assessments are available today at prices equal to or below their text-based, legacy competitors. This means virtually every company can access this technology and the benefits it brings at minimal expense.

Second, custom-made simulation-based assessment has dropped by more than 80% during the past decade, and these costs are likely to continue to decline.

Does this mean there is no incremental cost for developing custom simulations compared to a text-based, legacy test? Of course not. There is still extra cost. However, we are in an era in which candidates expect employers to make use of the latest technologies in their hiring practices. While a baby boom candidate might not object to an abstract personality inventory that doesn't seem related to the work to be done, Millennial candidates are far more likely to either object to non-job-related approaches. In light of these changing candidate expectations, the ever decreasing simulation premium is certainly worth considering.

If you think simulation-based tests might work for you, the first question is whether the off-the-shelf tests will meet your needs. If the answer is yes, that's just great. If not, we'd recommend getting an estimate of what it would cost to develop. Be sure you work with people who know what they are doing. It will probably be less than you think.