PSYCHOLOGICAL TESTS SORT OUT APPLICANTS.

Byline: Brad A. Greenberg Staff Writer

World War II was over and millions of Americans were returning home and re-entering the work force, which gave a Los Angeles psychologist an idea for helping companies separate the wheat from the chaff.

Dr. Floyd Ruch believed employers would benefit from psychological tests that would identify an applicant's attitude and job aptitude. Sixty years later, PSI has long outlived its founder and has built a following that includes a third of Fortune 100 companies.

"They help us identify solid, qualified candidates. And they do so without creating barriers to employment," said Susan Bowman, human resources director for Tri-anim Health Services in Sylmar. "Their tests have stood the test of time."

Burbank-based PSI administers about 1.5 million tests a year in 22 states that are designed to save clients the cost of a bad hire. The Employment Policy Foundation estimates that the average cost of replacing an employee in 2004 was $14,000.

Once a hire has been made, PSI test are used for employee development.

"It kind of tells you, OK, this is the kind of training you need to lay out. This is the recipe of success for this person," said Robert Ortiz, executive managing director of U.S. operations for Cushman & Wakefield.

Ortiz took a PSI assessment test when he was hired as an associate broker in Cushman's L.A. office 30 years ago. It showed him he had strong analytical skills but needed to work on presentations, sales and marketing.

Test-takers run the gamut from hourly workers for paper mills to nonprofit fundraisers to sound engineers. PSI clients include American Express, Blue Cross/Blue Shield, Citibank and the FBI.

There are different series of tests; one focuses on work attitude, another on ability and aptitude. Most are multiple choice, which make them a good fit for the Internet. The average employer, though, still prefers pen-and-pencil testing (for one thing, it's harder to cheat). Costs range from $10 for a brief screening for hourly jobs to $1,200 for an executive assessment.

"We are focused on a very broad category: human capital," said president and CEO Doug Walner.

The Internet has widely expanded the number of companies providing pre-employment testing. But the rule is hirer beware.

"Anybody could put up a Web site and sell you a test," said Ann Marie Ryan, a psychology professor at Michigan State University who has studied employee assessments.

PSI, she said, is well-known, well-established and well-respected.

Tests are developed and refined by psychometricians, scientists trained to evaluate cognitive ability and personality with tests. No PSI test has ever been successfully challenged as unlawfully discriminating.

PSI, which stands for Psychological Services Inc., was one of the early pioneers in employment testing when Floyd Ruch founded it in 1946. A psychology professor at USC, Ruch was succeeded by his son, William. In 2002, he handed the reins to his son-in-law, Walner, the first PSI president without an expertise in psychology.

Walner, who was general manager of Stamps.com before joining PSI, brought an interest for expanding online potential and has increased annual revenue from about $4 million five years ago to more than $20 million in 2005.

In addition to employment testing, PSI has also written licensure tests in 22 states for, among other professions, cosmetologists, electricians and court reporters. California real estate agents had to pass the company's test to be licensed.

Ortiz said PSI's tests also are helpful for people still trying to figure out what they should do with their lives.

"A lot of our senior professionals and brokers have sent their children during college or after college to be assessed by PSI on where they fit and where they need to improve."

Brad A. Greenberg, [phone]

brad.greenberg(at)dailynews.com