Posted on June 10, 2024

Understanding the differences between skills and competencies is critical to making informed decisions that drive success in the dynamic hiring landscape. Whether you are a small startup or a large corporation, our goal is to enhance your hiring strategies by distinguishing between skills and competencies.

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In this post, we'll look at the differences between skills and competencies, explore their role in competency-based hiring, and provide insights into how hiring competencies can enhance your hiring strategy.

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What Are Skills?

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Skills are specific learned abilities that can be developed through training or experience. They are essential for completing particular tasks and are usually categorized into two types:

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Hard Skills

Hard skills are technical, quantifiable abilities that are often job-specific and can be demonstrated through qualifications or certifications. Examples of hard skills include:

Kotlin programming: This entails mastering the Kotlin programming language, which is essential for Android app development.
Intermediate Mandarin skills: This includes the ability to read, write, and speak Mandarin at a functional level, which is valuable in roles that require communication with Mandarin-speaking clients or partners.

Hard skills are critical for many technical roles, providing a clear measure of a candidate’s technical capabilities. They are often the focus during the initial screening process to ensure candidates meet the basic job requirements.

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Soft Skills

Soft skills, in contrast, are non-technical and less specific. They relate to how individuals interact with others and manage their work. These skills are often transferable across various roles and industries. Examples of soft skills include:

Time management: This involves planning and controlling how much time to allocate to different activities to maximize efficiency and productivity.
Problem-solving: This skill encompasses the ability to identify issues, think creatively, and implement effective solutions.

Soft skills are essential for fostering a positive and productive work environment. They are crucial for roles that require teamwork, leadership, and effective communication. While more challenging to quantify, they are integral to a candidate’s overall performance and adaptability.

Skills form the core elements of a candidate’s expertise, offering a tangible way to assess their potential contribution to your organization. By evaluating both hard and soft skills, employers can gain a well-rounded understanding of a candidate’s abilities.

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What Are Competencies?

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Competencies, on the other hand, are the behaviors, attitudes, and ways individuals apply their skills in various situations. They encompass how a person achieves their goals or performs their job, often integrating multiple skills and behaviors.

Examples of Competencies

Making business decisions: This competency involves evaluating information, considering potential outcomes, and making choices that align with organizational goals.
Strategic planning: This includes setting long-term objectives, developing strategies to achieve them, and efficiently allocating resources.
Improving business processes: This involves identifying areas for improvement, implementing changes, and measuring the impact to enhance efficiency and effectiveness.
International interpreting and localization: This competency combines language skills with cultural knowledge to communicate effectively and adapt products or services to different markets.
Patient care and bedside manner: This includes both the technical skills needed to provide medical care and the interpersonal skills required to interact compassionately with patients.
Entertainment, such as public performance: This competency involves not only the technical skills of performance but also the ability to engage and entertain an audience.

Competencies gained significant recognition in the 1970s, especially through David C. McClelland’s influential study, “Testing for Competence Rather Than for ‘Intelligence.’” This study highlighted that behavioral traits and characteristics were more effective predictors of job performance than traditional aptitude tests. The top performers in the study showcased superior judgment, problem-solving abilities, and goal-setting skills.

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Skills vs Competencies: The Key Difference

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To better understand the distinction between skills and competencies, it’s important to recognize that while both are essential for job performance, they serve different purposes. Skills are specific learned abilities or knowledge that can be measured and demonstrated.

They are the tangible qualifications that candidates bring to the table, which can be listed on a resume or verified through assessments. Competencies, on the other hand, encompass the behaviors, attitudes, and ways in which individuals apply their skills in various situations.

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Skills: What You Do

Skills refer to the specific abilities or knowledge an individual possesses, such as the capability to speak Mandarin or manage information.

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Competencies: How You Do It

Competencies relate to how skills are applied, incorporating behaviors and attitudes. For example:

Speaking to a Mandarin speaker:

Skill: The ability to speak Mandarin.
Competency: Confidence in speaking and knowledge of cultural norms.

Selling to a customer:

Skill: The ability to organize leads and manage information.
Competency: Reading a customer’s feelings and adapting to their reactions.

Making a speech:

Skill: The ability to speak into a microphone properly and read a teleprompter.
Competency: Using body language, feeling comfortable in front of a crowd, and having charisma.

Patient care:

Skill: The ability to read and update charts, organize visitation, and manage time.
Competency: Using bedside manner and showing empathy.

Managing employees:

Skill: The ability to delegate tasks, communicate clearly, and resolve conflicts.
Competency: Adapting to changing environments and developing different management techniques to suit various workers.

Skills provide the "what" — the specific tasks and knowledge a candidate can bring to the job. Competencies provide the "how" — the manner in which these skills are executed and the behaviors that accompany them. By considering both skills and competencies in your hiring process, you can ensure a more comprehensive evaluation of candidates, leading to better hiring decisions and ultimately, a more effective and dynamic workforce.

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Competency-Based Hiring: Why It Matters

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Competency-based hiring focuses on identifying and assessing the specific behaviors and attitudes that predict success in a role. This approach offers several advantages that go beyond traditional skills-based hiring, providing a more nuanced and effective means of selecting the best candidates for your organization.

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Better Predicts Job Performance

Unlike traditional skills-based hiring, which primarily focuses on evaluating a candidate’s technical abilities, competency-based hiring assesses how candidates apply their skills in real-world scenarios. This method looks at past behaviors and outcomes to predict future performance, providing a more holistic view of a candidate’s potential for success.

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Enhances Employee Development

Competencies are often more adaptable than skills, as they encompass both the behaviors and attitudes necessary for growth. Employees with strong competencies can be more easily trained and developed in specific technical areas, making them valuable long-term assets to your organization. This flexibility allows for the cultivation of a workforce that can evolve with the changing demands of the business, fostering a culture of continuous improvement and development.

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Promotes Cultural Fit

Competency-based hiring also considers the alignment of candidates’ behaviors and attitudes with your company’s culture. This alignment is crucial for ensuring that new hires not only possess the necessary skills but also share the values and work ethic that define your organization. A strong cultural fit can lead to higher job satisfaction, better team cohesion, and lower turnover rates.

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Improves Team Dynamics

Hiring based on competencies can significantly enhance team dynamics. When employees are selected not just for their skills but for their ability to collaborate, communicate effectively, and demonstrate leadership, the overall synergy within teams improves. This leads to more effective problem-solving, innovation, and productivity, as team members are better equipped to work together harmoniously and leverage each other’s strengths.

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Reduces Hiring Bias

Competency-based hiring can also help reduce biases in the recruitment process It emphasizes what individuals can achieve and how they can contribute to the organization, thereby supporting diversity and inclusion efforts. This results in a more diverse and equitable hiring process, attracting a broader range of candidates who might otherwise be overlooked.

By incorporating competency assessments into your hiring process, you can ensure a more effective and strategic selection of candidates who will drive your organization’s success.

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Skills vs Competencies: Which to Prioritize?

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When it comes to hiring, the decision to prioritize skills or competencies depends on your organization’s specific needs and goals. Different roles within an organization may demand different emphasis, and understanding the unique requirements of each position is crucial for making the right hiring decision.

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When to Prioritize Skills

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Technical Roles

For positions that require specific technical expertise, such as software development or data analysis, prioritizing hard skills is essential. These roles often involve specialized tasks that cannot be performed effectively without a strong technical foundation. Ensuring that candidates possess the necessary hard skills guarantees that they can handle the job's technical demands from day one, minimizing the learning curve and maximizing productivity.

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Immediate Needs

If you need someone who can start immediately with minimal training, hiring for specific skills may be more practical. In situations where there is an urgent requirement to fill a position due to tight deadlines or critical projects, having a candidate who already possesses the required skills can make a significant difference. This approach reduces onboarding time and allows new hires to contribute effectively right from the start, ensuring that business operations continue smoothly.

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When to Prioritize Competencies

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Leadership Roles

Competencies like strategic planning, decision-making, and interpersonal skills are crucial for leadership positions. These roles require individuals who can guide teams, make informed decisions, and drive organizational success. Prioritizing competencies ensures that you select candidates who not only have the technical know-how but also possess the behavioral traits necessary for effective leadership.

Long-Term Growth

If you’re looking to develop and retain talent, focusing on competencies can help you identify candidates with the potential for growth and adaptability. Employees with strong competencies are often more flexible and capable of evolving with the changing needs of the organization. By prioritizing competencies, you can build a workforce that is resilient, innovative, and capable of taking on new challenges, which is vital for long-term organizational success.

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Integrating Skills and Competencies in Your Hiring Process

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To maximize the effectiveness of your hiring strategy, it’s beneficial to integrate both skills and competencies into your evaluation process. This comprehensive approach allows you to assess candidates holistically, ensuring that they meet both the technical and behavioral requirements of the role.

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Develop a Comprehensive Job Description

Clearly define the skills and competencies required for the role. This helps candidates understand the expectations and allows you to tailor your assessment process accordingly.

A well-defined job description not only attracts the right candidates but also sets clear benchmarks for evaluating their suitability. This clarity ensures that both the employer and the candidate have a mutual understanding of the role’s requirements.

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Use Skills Tests

Skills tests are valuable tools for evaluating technical abilities. They provide objective data on a candidate’s proficiency in specific areas. By incorporating skills tests into your hiring process, you can quantitatively measure a candidate’s technical expertise, ensuring they possess the necessary skills to perform the job effectively.

These tests can be particularly useful for roles that require specific technical knowledge or capabilities.

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Conduct Behavioral Interviews

Behavioral interviews are designed to assess competencies. Ask candidates to provide examples of how they’ve demonstrated key behaviors and attitudes in past roles. This method allows you to gain insights into how candidates handle real-world situations and challenges, providing a more comprehensive understanding of their potential fit within your organization.

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Implement Competency Assessments

Consider using competency assessments to evaluate how candidates apply their skills in practical scenarios. These assessments can include role-playing exercises, case studies, or situational judgment tests.

Competency assessments provide a dynamic way to observe candidates in action, allowing you to evaluate their practical application of skills and their behavioral responses to various situations. This approach can be particularly effective for roles that require a high degree of interaction or decision-making under pressure.

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Combine Results for a Holistic View

By combining the results of skills tests and competency assessments, you can gain a comprehensive understanding of a candidate’s capabilities and potential fit for the role. This integrated approach ensures that you are evaluating candidates on both technical and behavioral dimensions, leading to more informed and balanced hiring decisions.

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A holistic view of each candidate’s strengths and areas for development can help you select individuals who are not only technically proficient but also aligned with your organizational values and culture.

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Related: Improving Candidate Selection Quality: Strategies for Hiring Success

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Conclusion

Understanding the differences between skills and competencies is essential for effective hiring. While skills represent the specific abilities a candidate possesses, competencies reflect how they apply those skills in real-world situations. Both are valuable in their own right and should be considered when developing your hiring strategy.

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We are dedicated to helping you find the right talent for your organization. Whether you need to fill technical roles or identify future leaders, we offer hiring process optimization to streamline your recruitment efforts and enhance overall efficiency.

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If you have any questions or need assistance with your hiring process, please don’t hesitate to reach out to us at info@arnesontalent.com. We look forward to partnering with you to achieve your recruitment goals and build a stronger, more capable workforce.

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