Sustained growth in the number of US businesses and corporate profit, coupled with increased hiring activity, will drive service prices higher in the next three years
Los Angeles, California (PRWEB) April 24, 2015
Psychometric testing services have a buyer power score of 3.8 out of 5. This score reflects moderately high negotiating power for buyers. According to IBISworld market research analyst, Michelle Hovanetz, "Demand for psychometric testing services has been rising moderately over the three years to 2014 as companies have continued to require assistance with measuring the strengths, weaknesses and behavioral styles of prospective and existing employees." Accurate assessment of a candidate's psychological attributes and skills is important for buyers given the potential costs of faulty role assignments and high employee turnover. This ongoing demand, coupled with strengthening corporate profit levels and a growing number of US businesses has boosted service prices slightly over the past three years, and prices are expected to continue rising in the three years to 2017, negatively impacting buyers. Fortunately, low price volatility has aided buyers in budgeting for purchases with little risk of drastic spikes.
The psychometric testing market is highly fragmented due to low startup costs, little regulation and an increasing use of online assessment tools. "Nevertheless, larger consulting firms with expansive service portfolios have also started to incorporate psychometric testing services to complement their talent management services, leading to greater merger and acquisition activity," says Hovanetz. Buyers should use the competitive environment to leverage offers in their favor, particularly when purchasing online assessments that do not require on-site consultation. Furthermore, suppliers in this market maintain moderately strong profit margins for their services, presenting more opportunities for buyers to negotiate lower prices. Major vendors in the market include ManpowerGroup, Aon PLC and Mercer LLC.
Buyers face a variety of additional risks and opportunities during the purchasing process. Some market factors that work against buyers include a moderate level of specialization required for on-site consultation and test interpretation as well as potential switching costs. Nevertheless, buyer negotiation power benefits from low supply chain risk, a moderate number of substitutes and low vendor financial risk. For more information, visit IBISWorld’s Psychometric Testing Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of psychometric testing services. Psychometric tests are used to screen potential job candidates and analyze existing employees regarding their personality, specific skills and aptitudes and measure a wide range of attributes including critical thinking skills, emotional intelligence, interpersonal style or verbal reasoning ability. These tests are used to provide employers with objective data to help better understand their workforce. Besides selling their tests, suppliers typically have consultants to help buyers administer, score and interpret assessments. This report does not include staff recruitment, background check or physical screening services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.