Why Small Businesses Need a Competency-Based Hiring Strategy

Gather a group of small business owners in a room and you’ll hear this common complaint, “it’s hard to find good people.”

This phrase breaks my heart because there are plenty of skilled people dying to find a job in a company like yours. However, many small businesses miss the mark when they fail to consider competency-based hiring strategy.

Great candidates are highly selective. They want a job where the culture fits their personality and they can excel. As a small business owner, you share this goal: a high performer who fits your company culture. A competency-based hiring strategy lets you attract the right people and makes hiring easier.

Let’s start by defining competency. There are two types: (1) skills, knowledge, and technical qualifications, and (2) personality traits, behaviors, and attitudes. The first group is pretty straightforward. Most of us can easily identify the skills, knowledge, and experience needed. The second set of competencies is trickier for most of us.

Why? Because behaviors are hard to define. As humans, we tend to put difficult tasks at the bottom of our list. And we rarely get to the last items. That is a mistake when you are hiring people.

If you were buying a pricey piece of equipment, you would spend time looking at key features and how you could use them to make your processes faster, more efficient, or more productive.

Yet, when it comes to hiring people, we fail to spend time thinking about the most important behaviors of a successful employee. That can be the most expensive mistake you make. Especially when the result is often a bad hiring decision.

Defining behavioral competencies is surprisingly simple. However, it does take some careful thought.

Start by studying your high-performers. If you don’t have any, use someone from another company who you want to work for you. Think about their attitudes, behaviors, and personality traits and how those traits contribute to their success. Then create a pie chart with the top three to five attitudes and behaviors. Your chart is a snapshot of your company culture.

Now do the same for your low performing employees. This gives you a range of performance from low to high.

But you have a little more work to do. This is where things get tricky. Your task is to take these behaviors and turn them into daily work activities.

Your next step is to specifically define those attitudes and behaviors in your company. Words mean different things to different people so it is critical that everyone has a common understanding. Use clear, concise, and easily understood language. Remember you are writing for your audience, who may have a different definition than you. You want two strangers to understand these behaviors and rate them in the same way.

Is this starting to sound like a performance review? It should because defining these behaviors is at the heart of effective performance standards.

Do this for each key behavior or attitude. You might include examples of words and phrases that your employees use. Go deep here. The more specific the better.

This worthwhile exercise unlocks powerful insights you can use to attract high-performing employees. It gives you a solid foundation to craft strategic interview questions to ensure your candidates possess these competencies.

Clearly defined competencies continue to pay dividends after you hire as well because they can be used for setting goals, creating career paths, professional development opportunities, and so much more. Plus, an added bonus is reduced turnover and increased employee engagement and retention.

A competency-based hiring strategy does require time on the front end. However, you’ll find the investment is one of the best you can make for your business.

– Contributed by Rebecca Barnes-Hogg, guest blogger from our preferred partner, YOLO Insights®

Take the First Step.

If you still have some work to do, no worries. The important thing is you are ready to learn. Reach out to your Inspiring HR consultant for a free consultation and help.

You may also want to grab a copy of Rebecca’s book, The YOLO Principle: The Ultimate Hiring Guide for Small Business, available on Amazon.– A handy resource packed with tools, templates, and step-by-step instructions.

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