At Noto Group, you’ll often hear us talking about competencies and competency-based assessment. On the “How We Help” section of our website, we describe our executive recruiting process, stating we “define the key qualities and competencies of the people who will help you meet your business goals” – but what exactly does that mean, and how do we execute on that promise?
What are Competencies, and Why are they Useful?
Global organizational consulting firm Korn Ferry describes competencies as “Observable and measurable skills and behaviors that contribute to workplace effectiveness and career success.” The firm has found that 43-64% of successful future performance is directly related to competencies.
Evaluating competencies is the key to making a successful hire. Competencies are the behaviorally defined characteristics (values, attitudes, motives, commitments, personality, knowledge, skills, and attributes) which underpin effective and/or superior performance. There’s no denying that technical skills are important for any role, but they are easy to assess and don’t serve as a good predictor for long-term success in an organization. A three-year study by LeadershipIQ that tracked 20,000 new hires found that 46% failed within 18 months, yet only 11% of them failed because of lack of skill. The other 89% failed for reasons related to unevaluated competencies and traits – for example the ability to accept feedback, emotional intelligence, or temperament.
Per the US Department of Labor, the cost of hiring mistakes is high. For many employees, this means two to four times the cost of the employee’s base compensation. For more complex positions – director, CEO or VP level – that can be closer to 6-8x higher.
This is where competency-based assessment strategies become useful. Competency-based assessment considers the qualities a candidate needs to be successful beyond the job description and allows the recruiter to identify candidates that align with your company’s culture and vision. They focus on how an individual will grow and integrate into an organization, rather than just on how they can do the job in question. Evaluating competency alignment ensures that you are hiring for long-term fit, rather than short term goals, leading to reduced turnover and increased employee engagement. Given the high cost of hiring mistakes, using competency-based assessment is especially important for executive recruiting.
Additionally, when assessing for competencies, you can add to your culture while reducing opportunities for unconscious bias in your hiring process. You’ll simultaneously broaden your outreach to a more diverse candidate pool while narrowing down your filters, so you’re focused on the top performers.
How Are Competencies Applied to the Assessment Process?
The competencies used for assessment vary greatly by role, company and industry. When looking at a VP of Sales role, for example, some competencies are a given. A VP of Sales would generally need to have Customer Orientation, Relationship Building and Team Management, to name a few. But the goals of the company, the stage of the business and the industry can also impact the competencies required for the role. For a company that is going through an inflection point in their evolution, Change Mastery may be a critical competency for new executive leadership. If the VP of Sales is working in an industry that is struggling, competency in Conflict Management may be important for dealing with disgruntled customers or vendors. Perhaps, the VP of Sales role is with a pre-revenue start-up…a key competency may then by Risk-Taking.
At Notogroup, we work closely with our clients to determine the required competencies for a role, working through a facilitated exercise to select the top 8-10 competencies that are most important to assessing the ideal candidate. Whether working with one hiring manager or multiple stakeholders, we work collaboratively to determine the final eight to ten competencies that will provide the framework for us to more accurately evaluate a candidate’s ability to succeed given the context of the role, company culture, and organization needs.
These competencies are then applied throughout the executive recruiting process, first as a foundation for Notogroup’s screening of candidates, then throughout the client’s interview process and evaluation. The competencies provide a common language to discuss the role and the assessment of candidates. This structured interviewing incrementally increases accuracy in hiring and is best utilized in coordination with other inputs such as: realistic job preview projects (RJP’s), references, and leadership assessment tools such as the Hogan, which is helpful for indoctrination coaching and leadership development to ensure long term success after the hiring decision is made.
By using competencies to evaluate candidates, we create an objective, measurable system of evaluation to assess potential for sustained, long-term success at an organization. For more information about how we can help you shift to a practice of hiring for long-term fit using competency modeling, contact us online or call 503-953-8000.