Why successful companies are switching to competency-based hiring

by Sirius People

Competency Based Hiring
Estimated Reading Time: minutes

It’s no surprise that Australia’s current job market has drastically changed in the last 20 years.

We’ve seen the rise of technology and automation, the creation and evolution of new and existing jobs, and new and existing markets grow exponentially.

But, traditional qualifications, such as work experience, and degrees or diplomas, cannot keep up with this rapid growth.

Many of these evolving roles are now hybrids of two or three positions; they may involve new-to-market skills that require on-the-job training; they may even require soft skills that cannot be taught in a traditional training setting.

In a recent survey by the World Economic Forum, most employers believe that more than half of all current employees will require significant reskilling or upskilling by 2022.

Despite this, businesses are still hiring for a particular skill set or qualification.

In other words, while our overarching job market is innovating, how we’re recruiting has not.

It’s not for a lack of trying! We’ve developed behavioural-based interviewing and added psychometric testing to the interview process to better identify and qualify soft skills. We’ve added technical testing to interview processes to better qualify hard skills.

But these “innovations” in the hiring space do not address the root cause of our hiring issues:

They cannot accurately identify what competencies drive high performance in specific roles within unique company cultures.

In fact, we’re already seeing this now, with job opportunities and job seekers only being aligned about half the time and the disparity in Australia being much higher than in similar countries like the United States and the United Kingdom, according to Indeed

Yet, we continue to hire based upon our subjective and biased opinion on what makes a person successful in the role we are recruiting for. 

This leaves businesses open to significant variations in performance and skill shortages in your workplace.

So, how can we recruit without relying upon traditional qualifications?

According to leading psychologists and recruitment experts, competency-based hiring may be your ticket to hiring and building high performing teams.


What is competency-based hiring?

In its essence, competency-based hiring is a technique that provides a well-rounded view of your candidate’s hard and soft skills.

Its process is twofold:

  1. Create a job profile based on the core competencies of existing employees in that role. 
  2. Evaluate the candidate through psychometric testing against the job profile to then determine your interview questions and delve into the areas where your candidate might not have been as successful.

You can then match their psychometric testing and interview answers against the job profile to determine a person’s suitability for the position.


What are competencies?

A competency is an attribute, knowledge, skill or ability that contributes to an individual’s success in a role.

It describes how an individual undertakes activities, manages their personal and professional lives, and their behaviours, as exhibited through their decision making and strategic thinking.

This could be round behaviours such as communication, how they learn, how they work in a team, how they solve problems, planning & organising, how they manage people and themselves, and self-enterprise.


How are competencies used to define success in a role?

Success in a role can be as easy as looking around the office. Who do you currently have in that particular role? Or, if it’s a new role to your business, can you look to a similar business who currently employs that particular role?

You’re able to use their core competencies to create a Job Profile — after all, if they’re not successful in their role, they wouldn’t have the role to begin with.

There are three ways you can create a Job Profile using competencies:

By using these existing competencies, it’s easier to test your candidate against how your employees are currently successful in their role. You can then build your interview around areas where they didn’t score as well to ensure you’re gathering a full picture of their individual competencies.


What are some examples of competency-based interview questions? (And how are they different from behavioural interview questions?)

When building your interview using the competency-based hiring method, it’s important to use your insights from your Job Profile to evaluate against your candidate’s test results to know what areas you need to dig into.

So, for example, if your candidate’s test is showing that they only have moderate communication skills when your Job Profile requires excellent communication skills, you may be able to ask questions, such as:

  • Describe a time when you disagreed with a team member. How did you resolve the problem?
  • Tell me about a time when you disagreed with a supervisor.

While competency-based interview questions are similar to behavioural interview questions, keep in mind that behavioural interview questions only seek to understand how you think and how you approach real-world dilemmas. 

Competency-based interview questions encompass the same goals of behavioural interview questions, but also incorporate skills, talents and abilities that the candidate has developed and finessed.


Why is competency-based hiring more effective?

With competency-based hiring, your leadership team can see what drives high performance for that particular role in your unique company culture, as they are gathering insights from compiling results from existing employees’ psychometric testing and using it to create a job profile.

This removes subjectivity and bias from the selection process to best evaluate a match between your role and a candidate.

Once you have selected candidates based on their individual evaluation and have tested it against your job profile, you are then able to dig into areas where your candidate’s evaluation was lacking during the interview process.

This allows your candidate to use anecdotes from their professional experience to demonstrate their competencies and allows you to better examine whether they will be successful in your role.

Not only that, but competency-based hiring also allows you to consider people of all ages and backgrounds, regardless of their formal experience or education. In other words, more opportunities for a diverse and innovative workplace.


So, what psychometric test should we be using?

While there are a number of competency-based tests you can use, we have recently partnered with AbilityMap to screen and qualify our Sirius Accounting & Finance, Sirius Support and Sirius Sales & Marketing teams. 

AbilityMap was created by Kevin Chandler, psychologist and founder of Chandler Macleod Group, an AUD$1B recruitment agency, and Mike Erlin, a technology executive who has reorganised and lead a team that became a fifth largest revenue producer globally within a US$2.2B market cap company.

Their Ability Imprint evaluates individuals upon completion of an online evaluation, which includes timed sections for literacy, numeracy and problem solving, and an untimed personality evaluation. This four-part test uses the founders’ 40+ years of experience in proprietary science and technology, as well as the latest psychometric, human behaviour and performance research to ensure highly accurate results when used reliably.

As Ability Imprint largely evaluates soft skills, it’s an incredibly useful tool to evaluate candidates in a time when technology is automating many roles, leaving the essential “human” roles to those with the strongest soft skills to ensure your business’ success.

Ensuring that your new hire and your company are a good match are essential to not only best represent your employer brand, but also save you time and resources in your recruitment process. After all, replacing a bad hire costs from 30 to 150 per cent of their salary!

We have worked closely with Kevin Chandler to create high performer profiles for a variety of roles to test our candidates against. We also offer this service to our clients.

To learn more about what AbilityMap can do for your business, click here.


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