How Competency-Based Hiring Can Help HR Teams Secure Top Talent
HR professionals have always faced challenges in recruiting and retaining talent. Despite the unprecedented access to global talent pools, the labor market remains tight, and companies need help finding the right people for open positions. Conventional hiring methods (such as a reliance on work experience) have proven ill-equipped for building a modern workforce, and companies that rely on these methods must catch up.
While HR teams have access to a more significant number of candidates than ever before, this isn’t enough – they also need to be capable of pinpointing which of these candidates are best suited for their open roles. This is why hiring managers should focus on objectively assessing candidates for specific competencies directly tied to job performance. Huge talent pools will be of little use if you cannot identify whether candidates have the skills and temperaments that will make them excellent employees.
Competency-based talent assessments won’t just help you hire the right employees – these assessments will also make it easier to retain those employees by enabling more effective talent mobility within the company. At a time when employees are demanding greater flexibility and professional development opportunities, the ability to fairly assess applicants for new roles will reduce turnover and ensure that you’re fully leveraging your employees’ strengths.
Taking the Guesswork Out of Hiring
I recently participated in a webinar on how competency-based hiring can help employers cast a wider net for talent. One theme of the discussion is that the ideal candidate often has a unique mix of skills and experience that would have been difficult to identify in a cover letter or resume.
For example, I once worked on a talent acquisition team and discovered that the most successful salespeople were those with monthly (rather than quarterly or semi-annual) sales quotas. Unfortunately, this isn’t the sort of information that receives much attention on an application.
We know that characteristics such as general cognitive ability are highly predictive of job performance. Still, it’s difficult for candidates to demonstrate these traits concretely without objective assessments. The same applies to other competencies that hiring managers deem relevant to particular roles – determinations that can be made by mapping their hiring criteria to job performance. As a result, HR teams can dramatically improve the quality of their hires by developing a framework of essential competencies and assessing all candidates.
Instead of confining your talent search to candidates who went to certain schools or had a few seemingly relevant lines on their resumes, competency-based hiring will allow you to extend this search to a much wider array of industries, geographies, and so on. Moreover, there’s no reason to filter out promising candidates because they don’t meet outdated hiring standards.
Creating a Consistent Standard for Assessing Talent
Diversity is a core priority for today’s HR teams and many of the candidates they hope to attract. By establishing a competency-based hiring process, companies will be capable of identifying talent in unexpected places and appealing to more diverse candidates.
However, it can be challenging to predict which candidates will perform well in a role based on the education and experience they list on a resume. The best way to make these determinations is to measure candidates with consistent evaluative criteria.
Over three-quarters of candidates say diversity is essential when considering job offers. Competency-based assessments allow you to make data-driven hiring decisions while demonstrating your commitment to fairness.
A recent Criteria survey of almost 2,000 candidates found that 94% say assessments help them establish their potential, while another 74% regard assessments as a way to prove themselves beyond experience. Competency-based hiring is a win-win for candidates and companies, giving everyone a fair shot while showing hiring managers who can do the job most effectively.
When companies establish robust and consistent standards for hiring, they can use the same standards to facilitate talent mobility. According to Criteria, even though companies with talent mobility programs have fewer issues with turnover, just 28% have talent mobility programs in place. Competency-based assessments can ensure that all employees have access to the same opportunities and deploy human capital as productively as possible.
Why Competency-Based Hiring Is Vital for Today’s Workforces
In a tight and increasingly globalized labor market, talent competition is ferocious. In this environment, companies can’t afford to hire the wrong people – beyond the direct cost of onboarding and training employees, there’s the opportunity cost of missing out on candidates who would have been a better fit.
When HR teams focus on specific competencies, they’ll reduce the likelihood of a bad hiring decision, improve time-to-hire (almost one-third of candidates who abandon the hiring process do so because it took too long), and inspire confidence among diverse candidates.
Competency-based assessments are the only way to widen your candidate pool without increasing the risk of a bad hire. By creating competency frameworks directly relevant to individual roles, HR teams can identify the specific characteristics they’re looking for in future employees and implement objective evaluative tools to determine which candidates meet those criteria.
Competency-based assessments will also reveal the connections between different jobs within the company, opening up new opportunities for talent mobility and giving HR teams a more comprehensive understanding of your workforce.
Competency-based assessments won’t just transform how companies hire – they’ll create a more people-focused approach to human capital. A focus on competencies will facilitate diversity, provide opportunities for professional development, and build a workforce where all employees can do their best work every day.
If you’re interested in learning more about how to use the latest technology and trends to win top talent for your company, contact us today.
Ana Recio is the SVP of Global Talent at SoFi and a Criteria board member.