When you’re in hyper-growth mode at a startup, you probably don’t think twice when you see an interview pop up on your calendar.
You take it in stride, knowing that you’ve done interviews before and have spidey senses about people. It’s no biggie, you’ll pick the right person when the time comes.
But interviewing shouldn’t be a spur-of-the-moment decision. It’s high stakes. The average cost of a bad hiring decision is at least 30% of the individual’s first-year expected earnings. For startups, that’s no joke. And that’s not to mention the negative impact a bad hire could have on others’ work or client deliverables.
To avoid these detrimental outcomes, you need to hire people with the right knowledge and abilities to propel your company forward 一 the first time around. The best way to do that is to build and use a competency framework that’s specific to your organization. In this post, we’ll explain what competency-based hiring means and its benefits before diving into a few examples.
What is Competency-Based Hiring?
Traditional hiring is mostly focused on whether or not a candidate has technical skills and can wow interviewers during their conversations.
But those aren’t always predictive signals.
To make an outstanding hire, you need more tangible information. And that’s where competency-based hiring comes into play.
Competency-based hiring is a technique in which a company pinpoints several skills and qualities that are required to perform a job well before recruiting even starts. Companies that use this methodology usually have position-specific competencies and organization-specific competencies.
Position-specific competencies refer to a candidate’s skills (like problem-solving) or their personality traits (like performing under pressure). Organization-based competencies (like integrity) indicate whether a candidate can fit into the broader company culture.
Identifying competencies ahead of time sets the framework for determining what questions to ask during your interview process. This also ensures that you’re leveling the playing field 一 every candidate is evaluated on the same set of competencies for a role.
What Are the Benefits of Using Competencies in Hiring Decisions?
There are a lot of reasons to use competencies besides their ability to guide your hiring process. Here are just a few other reasons why you should consider moving towards a competency framework.
With competencies, you’re no longer hiring on gut instinct. You’re examining the candidate in a much more objective way, asking questions that will give you insight into how a candidate has tackled challenges in the past and how they might perform in the future.
Overall, this reduces the chances of a bad hire and increases the chances of a good one. Over time, you can measure how accurately each competency predicted future performance and use that information to refine your competencies even further.
A More Diverse Workforce
According to a McKinsey survey, 35% of employees say their organizations put too little effort into creating a diverse, inclusive environment. That’s not surprising when you consider that most interviewers default to looking at perceived indicators of competence.
Where candidates went to college or where they have been employed often has more to do with their demographics and socioeconomic status than their skills. Hiring in this way introduces the “cloning effect,” in which new hires end up having the same background, personality, and work style as their hiring manager.
Using competencies can help you avoid these issues by identifying talent based on their raw skillset and the behavioral qualities they display, rather than accolades or experiences that may not matter.
Higher Retention Rates
When you pick the right person for the right job at the right company, they are not only more likely to excel, they are more likely to stay. Companies that implement competency-based recruitment and hiring strategies experience a lower turnover rate.
Not only does this save you the money and time of having to rehire often, it also boosts your hiring brand awareness 一 who wouldn’t want to work for a startup where everyone likes their job?
94% of candidates want feedback if they are rejected, but only 41% of candidates actually receive it. With very few companies giving constructive criticism, use this as an opportunity to stand out.
You want to provide a memorable candidate experience, and competencies can provide straightforward, actionable feedback. Also, you never know, candidates may reapply after they’ve cultivated a few more skills and would be the perfect person for a future role.
Reduce Time to Hire and Onboard
Pre-selecting competencies before the hiring cycle drastically cuts down hiring and onboarding cycles. Using competencies in your job descriptions and as recruiter filtering criteria narrows down your applicant pool, allowing interviewers to spend less time screening and more time chatting with higher-quality candidates.
Competencies also speed up the structured interview process by giving hiring managers set criteria on which to base their questions. Once developed, question banks can be used over and over again, greatly reducing the time it takes to prepare for interviews. If a candidate can get through all these hurdles, they have already proven they have the expertise and personality to run through the onboarding process quickly and start producing valuable work right away.
How to Develop a Competency Framework
Competencies are most often broken into several categories. Below are a few competency types with corresponding examples.
These competencies assess a candidate’s attitude and work style. Behavioral needs will vary from role to role.
**Decisiveness: **The ability to make active decisions or to commit oneself by speaking one’s mind and taking a position.
Independence: The ability to perform actions and make statements that reflect an opinion or view of one’s own; not to fawn.
Perseverance: The ability to hold onto views and plans of action despite adversity.
**Sociability: **The ability to be comfortable in people’s company, to meet people easily, to mingle freely.
These competencies are more, well, technical in nature. They are used to determine whether or not someone is proficient enough in certain skills to perform well in their role. Technical competencies will also vary from role to role.
**Innovative Power: **The ability to direct an inquisitive mind toward initiating new strategies, products, services, and markets.
**Networking: **The ability to develop and maintain relations, alliances, and coalitions within and outside the organization and to use them in order to obtain information, support, and cooperation.
Presenting: The ability to present ideas and plans clearly, using available resources.
**Problem Analysis: **The ability to detect problems, recognize important information, link various data, and trace potential causes and look for relevant details.
These competencies will likely apply to all roles. Remember, these competencies ensure that candidates jibe with the company culture.
Identification With Management: The ability and willingness to understand, accept and carry out decisions and measures from managers.
**Integrity: **Adherence to the standards, values, and rules of conduct associated with one’s position and the culture in which one operates. Being incorruptible.
**Organization Sensitivity: **Showing awareness of the consequences of one’s choices, decisions, and actions for parts of or the entire organization.
**Planning and Organizing: **The ability to determine goals and priorities and to assess the actions, time, and resources needed to achieve those goals.
These competencies are intended to test for fit within a functional group of the organization such as product or sales. Oftentimes these are blended with Technical competencies.
**Adaptability: **The ability to remain fully functional by adapting to changing circumstances (environment, procedures, people).
**Negotiating: **The ability to obtain maximum results from meetings in which interests conflict both in terms of content and maintaining good relations.
**Result-Orientedness: **The ability to take direct action in order to attain or exceed objectives.
**Workmanship: **Independently carrying out one’s work in accordance with professional standards of one’s profession. Developing oneself in one’s professional field. Having a thorough knowledge of one’s field.
Management competencies are intended to measure the acumen of an individual’s ability to manage and lead groups within an organizational setting.
Coaching: Encouraging and guiding employees in order to make their performance more effective and to enhance their self-perception and problem-solving skills.
Delegating: The ability to assign responsibilities and authority to the right employees, taking their interests, ambitions, development, and competency into account. Following up on delegated tasks.
Developing Employees: The ability to review and analyze employees, strengths and weaknesses, to distinguish their talents and development needs, and to make sure they are enhanced appropriately.
Vision: The ability to step back from one’s daily routine, explore ideas for the future, look at the facts from a distance, and see them in a broader context or over the longer term.
How to Get Started With Competency Frameworks
Before developing role-specific models, teams should develop a list of 20-30 competencies to act as the guiding characteristics of future hires. A core list of competencies should identify what it means to make a great employee at your company. For each new role, select from this list the most important qualities and assign them to the hiring model.
For Chatkick users, building competency frameworks for your new openings is a breeze. Starting from a new or existing open position inside Chatkick, you can select up to fifteen competencies from our built-in library (containing >60 unique competencies).
Curious to learn more about how Chatkick can help your team start using competency frameworks? Book a personal demo today!