The psychology of backing talent

Who's the real you? Banks have long used psychometric tests to get under the skin of potential recruits but now they're also turning to psychologists to help them with selection and investment decisions.

AXA Investment Management is using a psychologist secretly to sit in on investment meetings on its Talents Fund, which launched in the UK last month.

The fund will invest in projects launched by entrepreneurs who believe they can make money no matter what the vagaries of the economic cycle. According to Citywire, the psychologist will meet young entrepreneurs as part of the assessment process, which may in time even lead to the launch of a 'Young Talent' fund.

Psychologists often work with banks at quite a senior level, points out business psychologist Dr Rob Yeung, head of assessment at consultancy Talentspace.

Banks want to know what someone is like under the surface, how they may develop or react in a pressure situation, he argues.

"Whether you've been working in private equity or a bulge-bracket bank, the culture in a new organisation is going to be different," he points out.

"So it is about trying to extract from the candidate whether they can work within your organisation. It tends to be more associated with senior appointments because a mistake there can cost you millions," he adds.

While secretly using a psychologist for investment decisions is one thing, within a recruitment context there could be serious ethical questions around such an approach, warns Stephen Leach, head of HR at recruitment firm Baillie Gifford.

"I would have thought you wouldn't want to be doing something to the candidates you haven't told them about," he says.

"We don't use them, but there is a certain amount of psychometric testing. For a lot of senior roles, a candidate's behavioural skills are at least if not more important than their technical skills," he adds.