Fri. Jul 19th, 2024
How Do Competency-Based Assessments Help in Making the Right Hiring Decisions?

With rapid transformations in the modern recruitment processes, assessments have become a crucial part of hiring.

Instead of believing in what you claim on paper, companies have started relying more on what skills and expertise candidates bring to the table. This means that modern recruitment involves testing competencies more than resumes.

But why is evaluating competencies in an individual so important?

In this article, we will get to know more about these competency-based assessments and their importance in hiring.

What Is a Competency-Based Assessment?

Competencies are the talents, expertise, and approaches that are required to precisely perform a part and contribute to organizational success. 

Competency-based assessments, therefore, are a mode of analyzing and evaluating each employee’s skills and capabilities based on what the job role demands. In other words, it is measuring how the employee executes the assignments they need to perform regularly. 

The use of a competency test for employment is simple.

It’s used to assess an individual’s expertise by comparing their skills and work progress with the industry norms.

4 Types of Competency-Assessment Methods

There are 4 types of competency-assessment methods that you can use for an effective hiring process – 


Tests are the most popular methods of diagnosis. With competency-based tests, you can simultaneously measure a candidate’s level of concentration, reaction speed, way to resolve conflicts, coping with stress, and so on.

There are various types of competency tests – substantive (knowledge, language, skill), competency (multiple-choice), situational (illustration of real events), psychometric (psychological interpretation), and so on.

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Interviews are supplements to the information acquired by evaluating a candidate.

There are several types of tests: personality , behavioral (behavior assessment based on previous events), situational (a real-life version of competency tests), and many more.

Skill Gap Analysis

Skill Gap Analysis is a technique using which you can identify the skills that your current workforce needs but is lacking.

This will help you in finding the common skills that are present or absent in your applicant pool and your best employees. If you find any common skills that are present, you can be sure of a potentially good hire.

360 Degree Assessment

360 Degree Assessment is mostly used to assess the efficiency and competencies of the managerial staff. 

In simple terms, you can have employees assess each other while providing their input and productive criticism to each other. This should be done anonymously to ensure complete transparency and avoid conflicts between employees.

Importance of Competency-Based Assessments

Let us discuss some reasons why you should be relying more on a competency assessment process than a resume: 

These Tests Eliminate Bias

One thing stopping managers from implementing various hiring initiatives is that introducing people who might not like each other’s opinions will deter the productivity of the organization.

This doesn’t mean that diversity always means disagreement, but conflicts do arise in an organization.

This is where competency-based assessments create a difference. 

These allow recruiters to focus on finding similar behaviors in the candidates to make them successful in the role regardless of their knowledge, skills, and demographics.

These Provide a Constant Hiring Process

A structured interview process results in better hiring than an unstructured one, that’s true.

Did you know a competency-based interview question bank can make the interviewing process easier when you are hiring for the same position again? The job roles in an organization may vary, but setting up a competency benchmark will help every time.

Once you start assessing a candidate based on their competencies compared to the benchmark, you’ll get sounder results.

These Reduce the Risk of Bad Hires

An efficient hiring process should not always rely on what a candidate can do, but also on how they respond to certain situations relevant to the job role.

Imagine you hire a sales executive with a strong resume and experience. But if he is not able to interact with the customers calmly during pressurized sales, you will be at loss.

Using a competency-based assessment while hiring can help you find people with similar skills. This will also help you in identifying the attitude and personality of the candidate.

They Predict Future Performance

Core competencies are identified for specific roles by assessing past or current employees who were/are successful in that role. 

Through performance management, real-time situations, conclusions, and actions are evaluated to find key competencies which are prevalent in the candidates to use in the recruitment and selection process.

This model can not only aid in identifying other candidates or employees with similar key competencies but also predict the future performance of the selected employees.

These Increase Cost-Effectiveness of the Hiring Process

Competency-based assessments can be one of the most efficient methods of hiring for those companies that work under a tight budget.

If you use competency testing while hiring, you will have guaranteed success in hiring without spending much.

These will help you screen out the unfit candidates while focusing only on the deserving ones. This will save you money and time.


The aim of the competency-based assessment is the accomplishing of the business objectives and achievement of measurable benefits by the organization.

While a competency test might be similar to the different talent evaluation methods, you can use all of these to maximize your chances of good recruitment. Competency-based recruitment can be valuable for the employer while employing an employee who is an organizational fit and is aware of what the new role asks, and isn’t wrongly hired for a position they’re not capable of handling.