The benefits of competency-based interviews

Uncover how competency-based interviews can help reduce bias in the recruitment process and improve your quality of hire. In a competitive recruitment landscape, finding the right candidate to fill a vacancy is the among the most significant challenges employers face. Our research shows that 29% of employers see skills shortages as one of their biggest hurdles, highlighting the need for comprehensive and robust recruitment in key areas. That’s where competency-based interviewing can help. This interview format, which assesses candidates based on past behaviours and experiences, can help employers onboard talent with the skills they need and unlock a range of desirable benefits. In this article, we’ll be exploring the advantages you could leverage by incorporating a competency-based approach to your hiring process. Check out our comprehensive guide to conducting candidate interviews.

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What are competency-based interviews?

Competencies are characteristics recruiters and employers can use to determine how a candidate will perform in a role. These include a range of soft skills and personality traits that can be difficult to measure, such as:

Communication
Enthusiasm
Teamwork
Decision-making
Leadership

Competency-based interviews are a structured way of evaluating candidates by focusing on specific competencies and how they could impact their overall effectiveness in a role. A competency-based interview will therefore consist of questions directed at a particular skill or competency relevant to the role, with candidates asked to explain how they have used or demonstrated a competency or dealt with similar situations in the past. Unlike traditional approaches to interviewing, which rely heavily on hypothetical questions, competency-based interviews delve into real-world scenarios to assess a candidate’s abilities and suitability for a role.

Examples of competency-based interviews

To gauge whether an interviewee has the relevant competencies, competency-based interview questions need to be framed in a specific way. These tend to begin with a variation of “tell me about a time when…” or “give me an example of when…” This includes questions like:

Tell me about a time you had to work with a colleague or client and you disagreed on the way forward.
Give me an example of a time your communication skills improved a situation.
Have you ever had to prioritise your workload to meet a deadline?

A vital part of asking competency-based questions in this way is to ask follow-up questions to fill any gaps left in the candidate’s answer.

Why competency-based interviews are popular

Competency-based recruitment allows interviewers and hiring managers to form a comprehensive profile to measure applicants against one another. This is particularly important in an environment where employers are grappling with skills shortages, with research suggesting 82% of small businesses are struggling to recruit due to a lack of individuals with relevant skills, qualifications, and experience. As a result, it comes as no surprise that the Chartered Institute of Personnel and Development (CIPD) found competency-based interviews are the most commonly used interview format. Employers use it as a core part of their skills-based hiring process, helping them to identify candidates with the specific technical and soft skills they need to bridge gaps during the recruitment process.

The benefits of competency-based interviews for recruiters and employers

Aside from digging deeper into a candidate’s suitability for a role and providing employers and recruiters with a more well-rounded overview of their skills and experiences, implementing a competency-based approach can provide several specific advantages to employers and recruiters. Let’s take a closer look at some of the benefits of competency-based recruitment you can leverage.

1. Reduced bias in interviews

One of the top advantages of competency-based recruitment is that it can reduce bias in the interviews process by helping to avoid too much subjectivity creeping in. By asking candidates to describe real-life situations where they demonstrated a given competency, this method makes it possible for interviewers to better assess their actual abilities. This in turn focuses on specific skills and behaviours, objectively scored. Implementing standardised questions allows employers, recruiters, and HR professionals to compare candidates fairly and make hiring decisions based on objective criteria. This results in a stronger and more equitable process for all.

2. Improved candidate experience

During competency-based interviews, candidates are encouraged to engage more in the process by sharing details of their own past experiences. This approach creates a more interactive and dynamic dialogue during the interview, helping candidates feel more involved and valued throughout. When candidates can connect their experiences to the role, they are more likely to be enthusiastic and open during the interview. This increase in engagement can lead to a better rapport with interviewers, assisting in gaining a deeper understanding of a candidate’s personality and fit for the role. This can also contribute to an improved quality of hire, as top candidates may be more inclined to accept a job offer from an organisation with an engaging candidate experience.

3. Better predictability of performance

Competency-based interviewing is designed to assess a candidate’s likely performance by exploring their past behaviours in real-world scenarios, providing valuable insights into not only their technical skills, but also crucial soft skills. This can include candidate’s capabilities in areas like:

Problem-solving
Teamwork
Adaptability
Creativity

By using competency-based interviews to analyse how candidates have responded to challenges in previous roles, employers can better predict how they might perform in future. This improved predictability reduces uncertainty and increases the chances of hiring individuals who will excel.

4. Hiring consistency

Consistency is a key benefit of competency-based interviewing. By using a standardised set of questions along with a structured approach, interviewers can ensure all candidates are evaluated using the same criteria. This uniformity makes it easier to compare candidates objectively and thereby reduces the risk of bias and discrimination when it comes to making final hiring decisions. Consistency also helps maintain quality in the recruitment process, allowing employers to build a more effective and diverse workforce by focusing on the competencies that matter most.

5. Reduction of bad hires

Measuring quality of hire is vital for a successful recruitment strategy. Pinpointing where bad hires are being made can have a massive impact on recruitment success, and reducing bad hires is one of the most significant advantages that comes with a competency-based approach to interviewing candidates. This is because assessing candidates based on demonstrated competencies and past behaviours makes it possible to identify red flags early on. By minimising the risk of hiring candidates who are not a good fit for the role of the organisation’s culture, competency-based interviews can contribute to:

Reduced future recruitment needs
Increase productivity
A more harmonious workplace
Reduced training and development needs

6. Low employee turnover

By working to ensure the hiring of candidates who meet the competency requirements outlined in the job description, competency-based interviewing can help employers achieve a lower turnover rate. To put it another way, competency-based interviewing can help improve employee retention, allowing organisations to enjoy all the benefits that come with that. This is because using this format of interview, employers can better identify candidates who are more likely to be satisfied and therefore successful in the role. Some of the additional benefits to increasing employee retention rate include:

Cost savings on future hiring
Enhanced team morale
Improved organisational performance

7. Improved employer branding

Another benefit worth mentioning is that competency-based interviews can result in an improvement in your employer branding efforts. If the recruitment process is more engaging, and results in a higher quality of hire with workers less likely to be looking to leave, your brand as an employer will get a boost. This can be drive by online reviews of the recruitment process, social media mentions from new employees or candidates, and even word of mouth. Furthermore, a strong employer brand can have the added benefit of enticing more top quality candidates to apply for roles in the future.

Using competency-based interviews to make better hiring decisions

Competency-based interviews provide significant benefits for both employers and candidates. By incorporating them into your hiring strategy, you can improve the quality of your hires and reduce staff turnover. For candidates, this approach offers a chance to showcase their experiences and past successes, making the recruitment process more engaging. Ultimately, adopting competency-based interviews helps build an effective, motivated workforce, better equipped to achieve long-term organisational goals.

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