Should companies hire for potential or skills

In seeking to create an effective hiring strategy, there’s a continuum that dictates the key attributes that should be measured in applicants. Finding the right point on this continuum is the key to ensuring that hiring supports an organization’s strategic goals and objectives.

This article provides an overview of the relevance of the two end points on this continuum to organizational hiring strategies as well as some information about how assessment can be used to support these strategies.

Endpoint:Hiring for potential.

In this scenario, hiring isn’t based on what an applicant has done, or their mastery of certain skills or bodies of knowledge, but rather on the individual’s raw talents and abilities. In some situations, this type of hiring strategy makes really good sense. A few that come to mind include:

  • Tight labor market. More and more, people with the desired experience, knowledge, etc. are just not available in the labor pool during the time when hires need to be made. Such situations often require a shift in focus in which a person’s overall potential to grow into a position must be considered as a key part of the hiring process.
  • College recruiting. Most larger companies mount very focused college recruiting efforts. These represent an excellent way to find “raw material” that can then be molded to help address specific needs and feed the ability to selectively build talent pools within the organization.
  • Learning organization. Many organizations have a very strong learning culture. In these environments, the idea is often to get the sharpest, most capable candidates available and teach them to do what is needed to help ensure the organization can meet its goals and objectives.
  • Unique core values. Many organizations are extremely values-focused. Everything they do is guided by a strong set of beliefs and a very strong world view. In such situations, organizations are able to perpetuate this type of environment only by hiring individuals who “fit” into it and get it. For instance, many startup or software companies place a strong value on innovation and creativity, while more stable and mature companies may place a premium on attitudes that help maintain the status quo.

The above situations serve as a direct influence on the type of recruiting and hiring strategy that should be undertaken. Assessment is an excellent example of this. Hiring for potential will definitely require a strategy that focuses on the following types of characteristics:

  • Raw ability/aptitude. This is the big one, because assessments of this type focus squarely on what an applicant is capable of doing as opposed to what they have done. Many persons argue that the results of an intelligence test provide the absolute best information one can obtain regarding an applicant’s ability to successfully perform a job. In some situations, I agree with this idea. However, when not sufficiently motivated, even the most capable person is not going to deliver. There are a wide range of cognitive ability assessments available that make an excellent part of a “potential-based” hiring process.
  • Work values. When hiring based on potential, it is often critical to ensure that the applicant shares the same values that guide the organization. As I stated earlier, in some organizations this is more critical than in others. This, however, is a key component if one wishes to ensure that the individual remains motivated and committed to actually applying their potential. There are a variety of assessments that can help organizations clearly define their values and to assess these values in applicants to help ensure congruence.
  • Career goals and ambitions. If one is taking a longer-term focus during the hiring process and seeking to hire for potential, the company should take into account the candidate’s goals and ambitions beyond the position they are applying for. This helps ensure direction and focus related to the application of the raw material. This does not always require any specific type of assessment per se, but rather should be a key part of the dialogue between the organization and its applicants.

Endpoint:Hiring for specialized knowledge or skills.

At the other end of the spectrum is a strategy that is based on the need to hire individuals with a very specific domain of expertise, or at least a combination of skills and experience that will allow them to hit the ground running and serve as an immediate component in achieving specific business outcomes. Some situations in which this type of strategy makes the most sense include:

  • Startup (experience vacuum). Brand-new organizations often require very specific experiences and knowledge in order to do their thing. Such situations require a strong focus on skills and experience.
  • Highly technical roles. IT and biotech-type jobs come to mind here, but certainly almost every organization has roles that require mastery of a very specific skill set. It’s often not possible to provide this type of training in an inexpensive and timely manner, requiring persons with specific knowledge, skills, and experience to be sought out.
  • Expansion/new products or businesses. Even mature organizations often expand their businesses in a manner that requires them to hire persons whose experience will ensure success of new product or business ventures.
  • Time pressures. When the heat is on to quickly staff an organization or a specific function, often for the reasons stated above, it’s critical to find and hire people with certain key skills.
  • Need for mentors. Organizations often need to hire an individual who will be responsible for teaching others within the organization in order to ensure the cultivation of a legacy of knowledge that will become a long-term investment for the organization.

Of course, things such as ability and motivation will serve as important factors in any job. However, without specific knowledge, skills, and experience, all the motivation and potential in the world won’t get the job done. Thus, when the focus is more on knowledge skills, and experience, there are several different types of assessment strategies that make the most sense. These include:

  • Qualifications review. Possibly the easiest way to determine whether an applicant has the experience required for a specific job is to review his/her resume to determine their relevant experience. While this may seem like a no-brainer, it is becoming a bit more complex as folks like the OFCCP begin to force organizations to clarify minimum qualifications for specific job openings. The more rigor is demanded in terms of defining minimum qualifications, the more this process becomes viewed as an assessment and thus the more rigor must surround it.
  • Interviews. Of course, interviews will never be replaced, and they serve a valuable purpose. Structured behavioral interviewing methodology backing a strong technical interview process can provide great insight into an applicant’s experience and how they apply knowledge and skills to get the job done.

Still, it doesn’t hurt to get additional verification regarding the truth behind interview responses and resumes. This is where more structured and scientific methods of evaluation can be a great help. Such measures include:

  • Knowledge and skill assessments. These often involve knowledge tests that verify that an applicant actually does possess adequate mastery of a specific body of knowledge. Often these take the form of certification exams but in many cases also involve content-specific tests written by experts in the area of interest.
  • Work samples/role-plays. One of the best ways to determine whether an applicant is able to perform a job or specific task related to a job is to ask them to apply what they know in job-related situations. This is the best data one can use to make predictions regarding suitability for the job. These types of assessments have been used for decades in manufacturing situations.
  • Experience measures. Life history inventories are also an excellent way to determine whether an applicant has the experience required to perform a job. These types of measures can differ from qualifications reviews because they often have been validated using scientific studies that link key life events directly to job performance.

Reality Lies Somewhere in Between

The two types of hiring I have been discussing are not absolutes. The truth most often requires evaluating a wide range of things, including abilities, motivation, experience, and knowledge. My point in providing these examples is that key business drivers should determine where on the spectrum to focus one’s evaluative efforts.

In reality, determining the right blend of ability and knowledge within a selection system should be made based on both strategic and tactical factors.

Strategic factors include a longer-term vision for how talent will be managed within the organization. They include things such as:

  • Organizational knowledge. This involves an organization making a conscious decision to cultivate a knowledge base that lives on beyond the life of an individual employee.
  • Forecasting. Careful forecasting of talent needs based on an evaluation of overall business strategy is a key determinant in hiring strategy. Ensure a bench of talent that will be able to deliver. Know who will retire and who will be able to fill their shoes.
  • Company culture. The strength of a company’s culture and its importance in guiding its actions is a key factor in the development of hiring processes.
  • Maturity. The age of a company and its position in the market is often a key factor in how hiring processes develop.

Tactical factors include more of the everyday type of things that drive line function folks nuts. Tactical determinants include things such as:

  • Key job requirements. What are the things the person must be able to do in order to perform the job effectively.
  • Understanding pain points. What are the problems that the organization is experiencing relative to the job in question? Turnover is an excellent example of such a pain point.
  • Resource limitations. What resources are available for supporting the hiring process? Things like time and money end up being factors that drive decisions behind what a hiring process will look like.

Unfortunately, it’s often the tactical factors that tend to drive the adoption of assessment tools. Fire-fighting stills seems to be the most popular driver for the hiring process. This is ok, though, because the use of these tools in tactical situations often clearly demonstrates their worth as strategic tools.

One trend that has helped to speed this along is the fact that pre-employment assessment and assessment used for development are becoming linked as part of a more strategic talent management strategy that can be used to ensure consistency between how talent is hired and how it is developed post-hire.

This linking of strategic and tactical drivers is an excellent foundation for ensuring the effective use of talent to meet organizational goals and objectives. An understanding of both these drivers can help organizations to determine where on the continuum of ability versus experience their hiring practices should be.