Personality assessments in the workplace are often viewed as a soft investment—useful for team-building, but hard to justify when budgets are tight or CFOs are pressing for hard numbers.
But that perception is outdated.
When used strategically, personality assessments can drive measurable business results, reducing mis-hires, improving engagement, and building stronger, more aligned teams. And yes, there’s a clear, credible way to calculate their ROI.
This guide will show you how to:
- Use a simple formula to estimate ROI
- Connect behavioral insights to business performance
- Make a strong business case for assessments that scale
If you’re looking to turn a “nice-to-have” into a “must-keep,” you’re in the right place.
The Simple ROI Formula That Turns Personality Assessment Insights Into Business Wins
To work out the ROI of personality assessments, we need to know three things:
- The cost of not having insights related to personality assessments
- The investment in the personality assessment initiative
- The business and financial results associated with success from that investment
FYI: “Better communication” is not an adequate outcome to build a credible ROI calculation.
To calculate ROI in simple terms, use this formula:
ROI = (Net Benefit – Cost of Investment) / Cost of Investment
Example: Reducing Mis-Hires
Expected reduction with personality testing: 25%
If your organization hires 150 people each year at an average salary of $120,000, a typical mis-hire rate of 46% means around 69 of those hires may not be the right fit. But when you integrate personality-based insights into your hiring process, that risk goes down. Even a modest correlation of .20 between personality and performance can reduce mis-hires by about 25%—bringing the number down to closer to 52. That’s fewer mismatches, and more people set up to thrive.
When you factor in lost recruiting and training time, diminished morale, and team disruption, that figure rises.
- Current bad hires = Total hires × Mis-hire rate= 150 × 0.46 = 69 employees
- Reduction in bad hires = Current bad hires × Improvement rate= 69 × 0.25 = 17 fewer bad hires69 – 17 = 52 New bad hires employees
- Cost saving (per bad hire) = Average salary × Cost multiplier= $120,000 × 0.30 = $36,000
- Total savings = Bad hires prevented × Cost per bad hire= 17 × $36,000 = $612,000 annually
General Formula Template
The ROI of Personality Assessments for Mis-hires
By integrating personality insights into your hiring process, you could save over $612,000 annually in mis-hire costs. With an assessment investment of just $40,000, that’s a 1,430% return—proving that even small shifts in alignment can drive meaningful business outcomes.
It’s not just cost savings—it’s setting more people up to thrive from day one.
This is just one area. You can run similar calculations for:
- Reduced time-to-fill
- Improved 90-day retention
- Decreased early turnover
- Manager training efficiencies
Beyond the Numbers: The Difference Personality Assessments Make
While personality assessments are not like capital improvements or marketing initiatives, they are the first link in a measurable, causal chain, including:
- Hiring
- Engagement
- Turnover and retention
- Customer satisfaction
- Shrinkage (theft)
These measures can, in turn, be linked to concrete outcomes with clear financial impact.
We’ll explore two examples in depth next: hiring and engagement.
Hiring
That’s the high-level math. But to really understand the ROI of personality assessments in hiring, you have to think through the entire chain of consequences.
To estimate the cost of a current hiring problem, it’s helpful to start by understanding what will happen if we don’t solve the underlying issues.
The biggest cost, of course, comes from simply hiring the wrong people. Some estimates put the rate of mis-hires at 46%. Given the financial cost of mis-hires together with the lost time to productivity and negative impact on team-level performance, using a Big Five personality to help identify the truly right candidates can help right the ship.
Every Hiring Delay Adds Up
Even if you tend to hire the right people at a better rate than competing organizations, it’s important to also consider the impact of hiring delays if you don’t have the tools to identify the right candidate efficiently and effectively. Without the insights you gain from personality assessments, you might need additional interviews or more time in the evaluation. One immediate consequence is that such delays will undoubtedly lengthen your recruiting process. This increases the cost of recruiting and decreases revenue due to lost productivity in the unfilled role.
The Ripple Effect on the Team
Another cost from this chain is the signal of indecision and inefficiency that delays send to the best candidates, increasing the likelihood that you’ll ultimately need to settle for “good enough” by the time you finally make an offer. Then, you must consider the negative impact on current and future team members, who need to make up for the work not getting done by the missing colleague in the meantime.
What It Really Costs You
Thinking through the chain of events tied to hiring and turnover highlights both the direct and indirect costs of hiring problems, helping you see what hiring failures cost in real dollar terms. Estimates vary by organization and role, but many companies peg the cost as high as 100% or 200% when considering the cost of recruiting.
Engagement
Another opportunity to explore the costly chain of events is employee engagement. Decades of research from Gallup indicates that engagement is correlated with a wide range of measurable outcomes, including productivity, profitability, patient safety, and absenteeism. Engagement is also perhaps the single most powerful leading indicator of employee turnover.
Definitions of engagement vary, but in basic terms, engagement is about sustained focus, voluntary effort, and a sense of purpose and connection at work. The right personality assessment can improve engagement by helping align a person’s individual personality profile with the requirements of the role. When that happens, employees are more likely to feel energized, rather than drained, as they take on daily tasks.
Energy and Fit: A New Way to Look at Roles
To support engagement through personality insight, you must first identify the traits essential for role success. For example, does the role require high levels of sociability or extended periods of independent work? Do you need someone with high levels of creativity and ideation or someone who enjoys a strong focus on practical tasks and efficiently executing established methods?
Learn how the WorkPlace Big Five Profile ™ trait report works.
What Personality Insight Makes Possible
Once you have identified the critical traits, you can then compare the ideal candidate profile to your candidate’s personality assessment results. The comparisons will help you determine which candidates are likely to fit the role well and which are likely to face challenges. In addition to providing valuable candidate insights, such careful consideration also demonstrates that you care about the individualized fit between the candidate and the organization, down to the specific role and team. It also enhances team-level engagement because highly engaged top performers want to be surrounded by like minds.
Fit Drives Engagement and Engagement Drives Everything Else
Putting these two together draws a clear line from improved engagement to reduced costs, folding in both reduced turnover and increased productivity, as well as the cascading impact on team performance. The difference between fully engaged and poorly engaged is like the difference between your best and your worst employees multiplied by the number of people at your company.
The Indirect ROI of Personality Assessments You Shouldn’t Ignore
Not every gain shows up on a spreadsheet. But the ripple effects of personality insight run deep. When leaders understand personality patterns, they become stronger coaches and more consistent communicators.
Teams benefit from a shared language that clarifies differences, reduces friction, and strengthens collaboration. Employees who feel seen and supported are more likely to stay—and to contribute at a higher level.
And unlike traditional assessments that end with a static report, a platform like the WorkPlace Big Five Profile ™ Experience enables ongoing development that’s both personal and practical, reinforcing real-world application over time.
Set your organization up for success
Too often, results don’t align with expectations. To prevent this from happening, here are steps to ensure your personality assessment initiative drives your team and your organization forward.
Establish clear objectives
Identify the current measurable challenges, and then define the plan that will get you to new, measurable outcomes.
Build the right team
Enlist the help of in-house or outside experts, at least in the first phase. They will have the experience and insight to create a best-fit assessment strategy and define the plans of action to generate results.
Select the right tool
Though we would love for every organization to fall in love with our WorkPlace Big Five Profile™, we know there are many vendors in the industry that deliver solutions at all three different levels. Be sure the platform and partner you choose can meet or exceed your expectations.
Identify your first group
Each organization has a group of early adopters. Find that group in your organization who is feeling the pain of their existing challenges and is optimistic about seeing real results. As much as you might want to start big, we find that starting with a relatively small group gives you insight into adjustments you might make before a broader rollout. Once you demonstrate great results, getting broader buy-in will be relatively easy.
Where WorkPlace Big Five Profile ™, We, Makes It All Work
At Paradigm Personality Labs, we believe insight should be practical, personalized, and scalable.
That’s why we built the WorkPlace Big Five Profile ™ Experience, We, a platform that pairs the WorkPlace Big Five Profile™ with an interactive, self-led experience. It helps employees and managers apply personality insights directly to their work.
Employees receive their results through a dynamic, user-friendly platform that encourages exploration, reflection, and real-world application. With built-in debriefing tools and no need for external coaching or facilitation, We removes the traditional barriers that make development hard to scale—making meaningful growth accessible to everyone.
This unlocks smarter, scalable development that improves retention, builds stronger teams, and increases organizational resilience and ROI.
Let’s Talk About What ROI Could Look Like for You
When implemented with intention, personality insights drive performance, engagement, and strategic clarity across every level of the organization.
Paradigm Personality Labs combines the WorkPlace Big Five Profile™, the golden standard for personality assessments, with the WorkPlace Big Five Profile™ Experience, We platform. This is a self-led digital experience that helps people apply those insights every day.
If you want help thinking through how assessments could support your business goals and how to measure their impact, we’re here to help.