What is a competency assessment?

Unlike evaluating skills, assessing competencies is about examining how a candidate applies their knowledge base and specific skills and their approach to the job. Competency assessments examine skills and abilities in relation to the candidate’s duties, ensuring they can effectively perform the responsibilities required for the role.

By using a competency assessment and competency tests during an interview process, you can help narrow down your search for the right candidate. This typically involves comparing each candidate’s competencies to the job requirements and identifying those who best match the job criteria.

This helps to ensure a fair and objective selection process.

What is job competence?

Job competence is an individual’s ability to perform the tasks and responsibilities required for a specific role effectively. It includes the combination of skills, knowledge, behaviours and attitudes needed to meet or exceed job expectations.

Unlike general skills, job competence is typically role-specific. It reflects how well a person applies their abilities in real work situations to achieve the desired results and support organisational goals.

The competency framework

A competency framework is a structured system defining core competencies, skills and knowledge required for each organisational role. It helps to align the capabilities of your workforce with strategic goals, clarifies job success criteria and guides employee career development.

This competency framework also helps HR identify skills gaps, enabling targeted training programmes and informing hiring decisions to meet business needs.

For employees, understanding the expected core competencies encourages greater job satisfaction and upskilling by providing a clear advancement path. For employers, competency frameworks support workforce adaptability and success by promoting development programmes, closing skills gaps and improving employee satisfaction, all of which can boost retention.

Identifying role-specific competencies is typically the first step in creating a competency framework. You could also take inspiration from existing frameworks.

For example, the OECD (Organisation for Economic Co-operation and Development) uses competency frameworks organised into three families: executive leadership, research and administration.

Types of competency and core competencies

Competencies can be broad, so it’s up to you to decide which ones are important to assess for a particular role or during an employee performance review. Three core areas are:

• Soft skills
• Technical competencies (hard skills)
• Leadership skills

These competency areas can tell you more about how your candidate relates to their colleagues and managers. Evaluating an individual’s competencies and skills in this context provides valuable insight into their ability to collaborate and contribute to a team. This is worth noting if you’re looking to maintain a workplace where staff members get on well with each other.

When assessing for a particular role, aim to identify the role-specific competencies and required skills needed for success in that position.

Soft skills

Soft skills are increasingly important in the modern workplace. Training employees in these emotional and cognitive abilities helps them to make valuable contributions that are relevant to the current working landscape.

Communication skills in particular enable staff to share ideas clearly, provide constructive feedback and collaborate efficiently within teams.

These interpersonal and behavioural skills are particularly important in customer-facing roles, as they can affect your business’s reputation. They include:

• Communication skills
• Customer service skills
• Empathy and emotional intelligence
• Conflict management
• Coaching and mentoring abilities

Managers who have strong soft skills often help to improve low employee morale and create a supportive work environment.

Technical competencies and technical skills

Technical competencies build on skills by applying practical knowledge and initiative to achieve better results in specific situations. Assessing these competencies is key to identifying qualified talent and addressing skill gaps effectively, especially for complex or high-level roles.

Consider the following examples:

• Troubleshooting
• Project management
• Cybersecurity knowledge
• Technical writing
• Language or linguistics
• Data analysis

Focusing on technical competencies relevant to the role helps narrow down the search for the best candidate. Methods to assess these competencies include tests during interviews, practical exercises and simulations.

Leadership skills

If you’re recruiting for a managerial or executive position, assessing a candidate’s past leadership achievements can indicate how they might lead your team. Competency assessments also help identify future leaders by evaluating their potential for advancement.

To assess an individual’s competencies in the leadership area specifically, you can ask a few challenging questions on topics such as:

• What their preferred leadership style is
• How they delegate responsibilities
• How they’d collaborate with colleagues on a project
• How they work alongside different employee personalities
• How they motivate teams to create results and reach targets
• What training, coaching or mentoring approaches they’re familiar with
• How they anticipate their leadership skills contributing to succession planning and aligning with organisational goals
• Their understanding of 360-degree feedback

Competency assessments reveal if candidates can apply their knowledge to new challenges. Highly competent candidates for leadership roles are those who offer innovative solutions and have a holistic understanding of what it means to lead by example and guide others.

Benefits of conducting competency assessments

Whether assessing job candidates or doing performance evaluations of existing employees, there are a few key advantages to competency assessments. Here are some of the main benefits:

• Providing valuable insights into employee skills and behaviours
• Helping to identify skill gaps and workforce capabilities to support strategic planning (competency-based assessment results can also highlight areas for improvement, enabling you to create personalised development plans for employees)
• Facilitating informed hiring decisions by objectively evaluating candidates’ competencies required for specific roles
• Allowing supervisors to evaluate potential employees in a simulation of the actual work environment
• Informing decisions on bonuses, raises or promotions within your organisation
• Reducing costs associated with recruitment and turnover by improving the quality of recruits and employee retention
• Enabling rapid onboarding by assessing the skills of new employees during the hiring process.
• Promoting fairness and transparency in evaluations through standardised competency assessment processes
• Helping avoid manager bias or lack of clear competency definitions often associated with traditional assessments or performance reviews, creating a fairer recruitment or performance-management environment

Competency assessment tools and techniques

To effectively evaluate an employee’s core skills and competencies, organisations can use various competency assessment tools and techniques. These methods help measure an individual’s abilities, knowledge and behaviours against the competency framework standards.

Combining different approaches ensures accurate insights and supports informed decisions on training and career growth. Here are a few popular competency assessment methods:

• Self-assessments: these encourage employees to evaluate their own competencies based on perceived skills and knowledge, helping them identify strengths and areas for improvement.
• 360-degree feedback: collecting 360-degree performance feedback from managers, peers and subordinates provides a well-rounded view of skills and workplace behaviour.
• Behavioural interviews: asking candidates to share examples of how they demonstrated key competencies in past roles helps to assess suitability for specific positions.
• Skills assessments and tests: using practical exercises, work samples or portfolio reviews that mirror real job duties, including digital skills, can evaluate current capabilities.
• Observation-based assessment: this involves direct observation of employees in their work environment over time to understand role suitability and performance.
• Project-based assessments: assigning employees real-world tasks within a set timeframe measures problem-solving, teamwork and technical ability in context. Employees work to complete practical exercises that mirror their actual job duties.
• Assessment centres: these evaluate competencies through group discussions, presentations and simulations that replicate realistic job challenges. This may include multiple exercises to assess a range of skills.
• Psychometric tests: measuring cognitive ability, personality traits and behavioural tendencies offers deeper insights into potential performance.

Combining different assessment methods can provide the most objective and accurate results for competency evaluations and a complete analysis of a candidate or employee’s strengths and development areas. A multi-method approach can also reduce bias.

Regular self-assessments and workplace reviews help existing employees continually evolve their skill sets based on competency assessment data. Make sure to communicate the assessment process beforehand, as this helps to manage expectations and minimise anxiety.

Competency assessment software

Competency assessment tools and software help streamline the process by automating tasks and improving accuracy. Many competency assessment tools can even automate the initial screening process in recruitment, saving time and ensuring fair evaluations. Using technology in competency assessments reduces the time required to evaluate candidates effectively while allowing HR teams to focus on identifying the most suitable people to interview for each role.

Customisable competency assessment software allows organisations to tailor assessments for different roles and departments. These systems often include libraries of standardised questions to enhance evaluations and support consistent benchmarking across teams. Once assessments are complete, employee development plans can be generated directly from the results, helping managers identify skills gaps and create targeted training opportunities to support ongoing professional growth.

Asking competency-based interview questions

To find out whether a candidate has the right competencies for a role, you can ask competency-based interview questions. These questions prompt candidates to discuss how they handled past situations and might approach new challenges. Asking how candidates solve specific problems also reveals their soft skills.

Examples of performance in unfamiliar situations include responses to customer-service challenges or how candidates raise issues with managers. These scenarios predict real-world behaviour, offering insights beyond technical skills.

Competency-based interview questions might cover topics, such as:

• Describing complex decision-making processes
• Conflict management and resolution with colleagues
• Leadership style when leading a team
• Biggest professional or personal achievements

Try using the STAR technique (Situation, Task, Action, Result) to evaluate responses. This helps you determine if candidates have the necessary competencies and are able to communicate their abilities effectively.

Competency evaluation methods interpret assessment results and provide honest feedback to existing employees, supporting open discussions about skill gaps and development. Providing constructive feedback from interviews can also be valued by job candidates and shows your company’s commitment to conducting a fair and engaging recruitment process.

Employee competency assessments are key to identifying specific competencies and necessary skills. They also help to close any skill gaps, so employees can perform more effectively and achieve their career objectives. By using diverse competency assessment methods and tools, you can encourage continuous learning, improve employee satisfaction and support career progression.