By Michael A. Verespej The scarcity of workers has reduced by 60%, in just two years, the number of employers that conduct psychological testing on job candidates. The annual workplace testing survey conducted by the American Management Assn. (AMA) found that only 32% of companies gave psychological tests to employees last year compared with 52% in 1998. "When you have a lack of qualified applicants" -- and two-thirds of the companies AMA surveyed said the availability of skilled workers was "scarce" -- such tests are "less useful," says Eric Greenberg, director of management studies at the AMA. Even if the worker shortage eases, companies may remain skittish about to what extent they use such tests because of an increasing number of invasion of privacy lawsuits such tests have triggered. A case in point: last month Rent-A-Chair agreed to an out-of-court settlement after employees filed a class-action suit objecting to sexual and religious belief questions on the company's psychological exam.