The HUGE peer-reviewed professional literature on industrial and organizational psychology has many articles devoted to business hiring practices. There are many kinds of hiring screens, such as resume reviews for job experience, telephone interviews, in-person interviews, checks for academic credentials, and so on. There is much published study research on how job applicants perform after they are hired in a wide variety of occupations.

The overall summary of the industrial psychology research in reliable secondary sources is that two kinds of job screening procedures work reasonably well (but still below the .50 level, standing alone). One is a work-sample test, where the applicant does an actual task or group of tasks like what the applicant will do on the job if hired. Another is a general cognitive ability test (an IQ-like test, such as the Wonderlic personnel screening test). Each of these kinds of tests has about the same validity in screening applicants for jobs. Neither is perfect (both operate at about .4x level in validation studies), but both are better than anything else that has been tested in rigorous research, across a wide variety of occupations. So if you are hiring for your company, it's a good idea to think about how to build a work-sample test into all of your hiring processes.

For legal reasons in the United States (the same consideration does not apply in other countries), it is difficult to give job applicants a straight-up IQ test (as was commonplace in my parents' generation) as a routine part of a hiring process. The Griggs v. Duke Power, 401 U.S. 424 (1971) case in the United States Supreme Court

http://scholar.google.com/scholar_case?case=8655598674229196...

held that cognitive ability tests used in hiring that could have a "disparate impact" on applicants of some protected classes must "bear a demonstrable relationship to successful performance of the jobs for which it was used." In other words, a company that wants to use a test like the Wonderlic, or like the SAT, or like the current WAIS or Stanford-Binet IQ tests, in a hiring process had best conduct a specific validation study of the test related to performance on the job in question. Some companies do the validation study, and use IQ-like tests in hiring. Other companies use IQ-like tests in hiring and hope that no one sues (which is not what I would advise any company). Companies outside the United States are regulated by different laws.