Why skills-based hiring is great, and mostly failing

Oct 03, 2023

9 mins

Why skills-based hiring is great, and mostly failing
Ginny Clarke Lab expert

Talent acquisition and future of work expert


A longstanding link between higher education and income levels cemented the notion that the foremost guarantor of a lucrative career is a university degree. But in the last few years, companies have started to rethink their hiring requirements, opening up the door to alternative credentials – like online badges and MicroMasters — while other (mostly tech) companies have cut their degree requirements altogether.

Beyond the tech industry, more companies are touting competencies over credentials, where candidates’ behaviors in previous roles - “the how’s” are more important than simply the experiences listed on their resumes. Mostly, this shift has been hailed as a move towards a more progressive and equitable hiring model.

But such a seismic shift also raises questions: If resumes alone are losing their currency, what benchmarks should replace them? If competence is paramount, do recruiters themselves have the competence to properly assess job seekers? And are the competency-based diversity initiatives sincere, or a marketing ploy?

Those are some of the questions we asked our expert in The Lab, Ginny Clarke. Ginny is the author of Career Mapping: Charting Your Course in the New World of Work, a frequent keynote speaker and host of the podcast Fifth Dimensional Leadership. Before starting her own leadership development advisory firm, Ginny was a partner at Spencer Stuart where she co-founded and led the company’s global diversity practice, and a former director of executive recruiting at Google.

Everyone’s talking about credentials losing their appeal. So do you think we’re in a real transition phase toward competency-based hiring, or is it mostly noise?

Unfortunately, I think it’s a lot of noise. I’ve spent considerable time talking to recruiters, including when I was working in-house at Google. And yes, applicants were allegedly interviewed to screen for competence but at the same time, these people had already been screened through an algorithm in the company’s applicant tracking system. So real, functioning competence-based assessment is by no means the norm. Companies need to break out of the traditional system of checking boxes and matching keywords. If they manage to do so, I believe that candidates will start to present themselves in a different way, too. After all, finding the right person for a position is a two-way street where both sides need to be honest and truly assess whether this is a match. As it stands today, we would need to overhaul the whole recruitment system to get there. I believe it needs to start with employers, specifically hiring managers, who are willing to hold themselves accountable for assessing on the basis of competencies not just in hiring but through the employee’s tenure (i.e. performance evaluations, etc.).


Are the staff shortages the main driver of company efforts to increase competence-based hiring?

Shortages play in, but I’d rather say this issue of competency-based assessment has been building for a long time and now employers are looking for ways to find talent without feeling they are “lowering the bar.” Employers and workers are at odds, if you look at the very low levels of workforce engagement. Something has gone wrong throughout the hiring and progression process. Often, people are hired into roles for which they’re ill-suited. Sometimes the workers are unaware of the mismatch and sometimes they are aware — this latter scenario is a chronic issue especially among lower-level applicants as they’re desperate to get a foot in the door in order to make ends meet or to start their careers. And often they hope to figure things out as they go.

These bad decisions often on the part of recruiters — mismatches in competence, capabilities and interests – are due to an overreliance on relevant experience or insufficient knowledge, skill or time to perform the assessment. Hiring managers are equally culpable to the extent they submit requisitions that are vague, outdated and not written in the language of competencies. They are also the ones making the final hiring decisions with recommendations from the recruiters and tend to default to backgrounds they are most familiar with versus demonstrated competencies.

So what should count as competencies in your view?

For decades, I’ve described competencies as the “deconstructed elements of how you do something.” It is not enough to have done it, as in experience, you could have done it poorly. More recently, I’ve borrowed this definition, namely skills, plus knowledge, plus ability equals competence. I like that a lot as you can have a skill — you know how to organize a spreadsheet or you know build an algorithm — but do you have sufficient knowledge of the system that it’s part of? And then follows the ability, which has to do with mental, physical, and emotional attributes. Can you actually execute? For example, we’re in the midst of a mental health crisis, and some people’s abilities could be temporarily impaired if they are going through some kind of mental health issue. I should underscore that not being comfortable with stressful environments or struggling to manage ambiguity, for example, doesn’t mean you’re not competent — it could mean you’re better suited for other roles. We should always remember that competency is a range, not an absolute.

I’ve often been confused about the utility of typical interview questions, like “Tell me about a situation where you had to manage conflict on your team.” It seems to me that this, at best, merely tests my ability to think, or lie, on my feet…

That question can be part of a competency-based set of questions. You are listening for how you think and make decisions. I suppose you could make up a story, but it seems easier to tell the truth. A good way to think about this is seeking to understand not just what applicants have done, but how they did it. For example, I remember asking one candidate about opening an office for his company in Asia as an expat. Here, I was interested in not only what he did in that role, but how he adapted to a new culture. How did he build business relationships? In this part of the assessment, I cared about how this person managed ambiguity and novelty, for example. I was trained to distinguish between functional competencies or domain/subject matter expertise and leadership competencies such as strategic thinking, team building and problem-solving.

Do you think an eventual shift to competency-based hiring will eventually create a hiring crisis for recruiters themselves? I’m thinking that assessing someone’s behaviors must be a more challenging task for a recruiter, demanding more competence, than simply looking at what schools you went to or how well your previous roles match the new one.

I’d say it requires some more skill but mostly a different mindset. Competency-based assessment doesn’t have to be that hard once you know how to ask certain questions and understand what it is you’re trying to find out, namely who someone is and how they think. When I train recruiters, I don’t just tell them what to ask but explain how the answers correspond with specific competencies the hiring manager is seeking for the role, and once you’ve understood the system, it’s not that tricky to do. Having said that, I’ve not heard of an automated system that can pull that off at scale. As far as I know, human thought is required, but guessing AI and machine learning will soon develop some level of capability in competency-based assessment.

But as I said, the mismatch issue isn’t only about recruiters not asking the right questions, but a systemic breakdown where even good recruiters find themselves sidelined by hiring managers who have their own ideas or hold onto the old model. And I find that so sad because not only does the mismatch continue, but you also make room for so much bias and then you’re likely missing out on more highly qualified diverse talent because of bias, no matter how unconscious. There really is a strong equity case for competency-based hiring — it levels the playing field – and if more companies would just understand what to look for, they’d notice that those things are often to be found in less obvious places.

From the outside, it’s difficult to gauge how much of the corporate diversity efforts are actual efforts or just marketing. What’s your experience?

Diversity was talked about already when I entered the workforce in the eighties. Overall, I’d say it’s not working. The touting, the labeling, the hiring of a Chief Diversity Officer don’t fix the problem at least related to representation and culture (also known as inclusion and belonging). Again, I’ll make the point about the impossibility of fixing an issue in a broken system. I was part of diversity programs during my time at one of the top 5 executive search firms in the world. In fact, I created their first Diversity Practice, alongside a friend of mine. Together, we increased the number of underrepresented people in the database six-fold in five years. Pretty good. But what percentage increase in people presented to clients - not even hired - do you think we saw? It was like a one-percent increase. So there we were, serving up people on a platter, but my fellow recruiters weren’t presenting them. Why? Because they instead went to the people they had ordained themselves — someone they’d already met and vetted. I think that’s a micro example of what’s happening on a macro scale.

So why were you circumvented?

Mostly, human nature. Fear. I say that in a broader context. People are afraid they will be found out. Imposter syndrome has shifted to the high-ups; legacy people are afraid that letting other people in will be a threat to them. And they might be right, people from underrepresented backgrounds are a threat in terms of competence. The old adage about Black people is that you have had to be twice as good to go half as far. Indeed, circumstances have demanded that we prove ourselves, the same can be said about women. I’m not saying I’m coming for anyone or that I’ll be vindictive… I’m saying that, if I’m more competent, how about you move out of the way? It is clear to me, we don’t have the meritocracy we purport to have.


Is there a case for increased transparency in the hiring process, so that candidates can better understand the DNA of the company and how they pick their employees?

Well, one of the issues with transparency is that it tends to clash with brand marketing. Companies put a lot of energy and money into building a brand. On the one hand, they want to be known as a “good” company in order to sell products or services, and on the other hand, they want the “best people” to apply to work there. And of course, there’s no issue with that if the company is actually honest. But truly lifting the hood is unlikely if it’s actually not a very self-aware company, where people aren’t treated with dignity and the leadership isn’t held accountable. Just consider how many times in a given year we hear of senior leaders in private companies or governments or non-profits being ousted for stealing money or inappropriate sexual conduct or whatever transgression. Such leaders don’t want people to look into the kitchen of the operation. Unfortunately, junior people seldom consider the quality of the leadership when picking a job. But shit rolls downhill.

I think people who’ve entered the job market in the last decade often find themselves sandwiched between two regimes, where the old system demands credentials and the new one competencies. The result is impossible requirements, where job listings demand you be highly educated with five similar roles under your belt; but you also need to be both independent-minded and a team player, detail-oriented yet great at delegating, outspoken yet very humble, and ideally a great singer. Do you have any advice for job seekers who find it hard to see themselves matching all these requirements?

Yes, rather than truly transforming anything, we’ve bolted new systems onto old systems that arguably benefit some people. And as you say, these job descriptions are useless, they’re bullshit. It’s just trying to fit all these square pegs into round holes and in the end no one benefits. The recruiter tells you what to be, the candidates try to contort themselves into this non-existent ideal, and the poor manager is simply trying to manage or lead against that description. So what should candidates do?

The starting point is figuring out what you want to do and why, something I covered in a book I wrote in 2011, called Career Mapping. Decide on two or three kinds of roles that you see yourself in and forget about the rest. Don’t focus on that you have a particular degree and therefore “I should do this…” — that’s all crap. I studied animal science to become a veterinarian but graduated in French and linguistics and then went to business school after being a recruiter. What? Huh? Yeah, pretty eclectic, but I know how to make sense of it. I know why my mind changed and I also know how I developed certain skills and competencies to get to where I am today. This leads us to the second thing: learn to tell your story!

Very often we don’t feel confident enough to say, “I thought I wanted that but actually I didn’t.” But being able to verbalize what led you to your present self is powerful. So build a narrative to make sure no one else is telling your story for you. Surely, if someone’s looking at your resume, they’re going to make assumptions. So figure out your through-line and demonstrate the trajectory. Remember that your resume isn’t your story — rather, you need to get good at telling it. You need to be ready to describe why you made certain moves and how you think about it. That is what is going to impress me, and if whatever recruiter can’t get with that, maybe you shouldn’t work for that company anyway. Maybe that’s the last thing I should point out. We get so upset when we’re rejected, but remember that it sometimes turns out to be a blessing.

Photo: Barb Levant for Welcome to the Jungle

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