TITLE The Economic Benefits of Personnel Selection Using Ability Tests: A State of the Art Review Including a Detailed 7.nalysis of the Dollar Benefit of U.S.

The economic impact of optimal selection using ability tests is far higher than is commonly known. For small organizations, dollar savings from higher productivity can run into millions of dollars a year. This report estimates the potential savings to the Federal Government as an employer as being 15.61 billion dollars pea- year if tests were given optimal use. If the 4 million placements,er year made by the United States Employment Service made optimal use of the General Aptitude Test Battery, the potential increase in work force productivity among the employers who hire through the service would come to 79.36 billion dollars per year. However, this would probably require an increase in Employment Service funding of about 8.75 million dollars per year. Departures from optimal use of tests can be shown to eliminate as much as 84 % of these savings. The principal problem is the use of the low-cutoff method of hiring randomly from all who pass some minimal test level. Optimal use of tests can be shown to provide benefits other than reduced labor costs, including a reduction in special administrative problems, an increase in the number of workers with promotion potential, and increases in the quality as well as the quantity of work. Five tables provide supporting figures. (Author/SLD