Having hundreds of candidates apply for one of your roles and choosing the best-fit candidate can be quite a daunting challenge for enterprises. Focusing on the most crucial competencies for success can already help you filter out many unsuited candidates. But how do you determine the right competencies that are the most predictive of success?
This blog explains what competency-based hiring is and provides you with a helpful exercise to determine which competencies are crucial to select candidates on for future job success in the (high-volume) roles you are hiring for.
What is competency-based hiring?
Competency-based hiring is an approach to recruiting and selecting employees based on their demonstrated skills, abilities, and behaviours relevant to the job. Instead of focusing solely on educational qualifications and work experience, this method emphasises the specific competencies and qualities essential for success in a particular role.
Why would you hire for competencies?
Competency-based hiring has demonstrated greater predictability compared to experience-based hiring methods. Both work experience and education have low predictive power for a person’s job performance. Cognition and behaviour, the two main types of competencies, have a very high predictive power for job performance. The most successful employees do not set themselves apart from the rest by their previous experience in a similar role. They are successful because of their combined competencies that allow them to work well in a team, adapt to the newly required hard skills, and their ability to thrive in a fast-changing world.
Additionally, competency-based hiring helps to overcome the current key labour market challenges. Read more about these key challenges and the interplay with competency-based hiring in our Equalture Recruitment Trends Report.
How can job clustering help in identifying competencies?
Job clustering is an important first step towards competency-based hiring. It is often not feasible for large organisations to analyse the required competencies for their hundreds or even thousands of roles.
Job clustering is “categorising jobs based on the similarity of the type of work being performed and the competencies most likely needed to do that successfully”.
In 2023, we led a couple of larger enterprise clients through the process of Job Clustering and setting up a Competency Framework. Based on those experiences, we have identified some key Job Clustering Variables – variables that can be used to define which jobs are probably relatively similar based on the nature of those jobs.
What makes someone a high-performer in the team?
Before proceeding with step 1 of the exercise, where we group employees based on performance levels, it is essential to be able to distinguish high-performers from low-performers to identify crucial competencies for future job success.
A high performer can be identified as a person who scores higher than average on the previously defined performance KPIs for a specific role or within a job cluster.
The outcome of this paragraph’s question depends on the way performance management is set up within the company. Performance management should be driven by objectivity and transparency, not by personal connections. If you think this might be the case in your company, we would advise you not to perform this exercise as it will likely result in biased outcomes and homogeneity in the team, which can be detrimental to future performance.
EXERCISE: Identifying competencies crucial for future job success in high-volume roles
We used this exercise with our clients, such as Randstad and FrieslandCampina, to help them determine their focus and develop competency profiles for their high-volume roles. Today we are sharing this with you!
Step 1: Group your employees in a similar role based on performance.
In this step, you will divide people, who are in similar roles, based on their performance level. You can do this in 3 groups: Group (1) high-performers, Group (2) neutral, Group (3) low-performers. If you find it too difficult to distinguish between the three, you can also divide them into 2 groups: Not unhappy (high-performers and medium-performers) and unhappy (low-performers).
You need at least 25 people per group to ensure a reliable analysis. In case your specific role is not performed by at least 25 people, then make use of job clusters within the company and create a group of at least 25 people that are in the same job cluster. For example, you are more likely to have 25 call-center agents compared to 25 digital marketers in your company.
Important note: You can only execute this exercise if you’re confident about the objectivity of your performance evaluations.
Step 2: Ask your employees to complete the internal benchmark assessment.
After having divided your employees into different groups based on their performance, they will need to do the internal benchmark assessment to form a team benchmark. It is important to have as many employees as possible to do the assessment so that you can spot consistent outcomes later on.
Step 3: Look into the results per competency to spot patterns.
For the competencies that you measured in the internal benchmark assessment, try to find patterns where the sub-groups, such as the high-performers and low-performers, performed consistently.
In this example, high-performers are more speed-inclined, whereas low-performers are more accuracy-inclined. You can spot that low-performers are more present in the accuracy-inclined buckets, whereas the high-performers show up more in the speed-inclined buckets.
In this example, high-performers are more flexible, whereas low-performers are more routined.
Step 4: Hire solely for competencies that show consistent variation in scores among different groups.
It is important to only base your more strict requirements on the competencies that show consistent variation in scores among different sub-groups. For the competencies that do not show consistent variation in scores between the groups, use these competencies to ensure diversity among your hires.
Example:
For the competency ‘collaboration’, both the low-performers and the high-performers are more individualistic. This shows inconsistent variation in scores among different groups. Therefore, the competency ‘collaboration’ can be used for diversity among the new hires. You can hire some that are more individualistic but also hire a few that are more collaborative.
How do you use these competencies in your hiring process moving forward?
After defining which competencies are linked to high-performers in the specific roles or job clusters, you compile these in your Competency Framework. Focus on a maximum of 5 different competencies that are the most relevant in the day-to-day duties of the role.
Now that you have completed this, you can include your competencies in the job description so that candidates know what competencies they need to have. The most accurate option to measure these competencies in a candidate is by using assessment software. Verify that the assessment is scientifically validated to measure the exact competencies that you want to measure.
The next step is selecting candidates for an interview based on how they score on the required competencies for the role. Recruiters can focus their time on the candidates that match best with the requirements for the role.
Randstad successfully identified the competencies of the high-performers for one of their customers through an internal benchmark. Read more about their case here!
Identifying competencies with Equalture’s game-based assessment
Our Equalture game-based assessments are an example of scientifically validated assessment technology that measures candidates’ competencies. They simultaneously improve your candidate experience and ensure inclusivity, providing equal opportunities for all candidates.
We assist all of our clients throughout the whole process of setting up competency-based hiring. Want to know more about what we could do for you? Get in touch with us!
