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What is a competency assessment – all you need to know

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What is a competency assessment

According to LinkedIn’s Workplace Learning Report, more talent developers emphasize evaluating employees’ competency and eliminating skill and knowledge gaps. In fact, 74% use internal skill gap assessments to identify which skills are lacking.

In today’s article, we’re going to explain what a competency assessment is and what are the benefits and risks of running them. We’ll also tell you how to approach competency assessment measures and evaluation for your current and future employees.

Table of Contents

What is a competency assessment

Competency assessment, also known as competency evaluation, it’s the process of looking into the current skill levels of employees and determining the potential competencies they could acquire or enhance. If done for the entire team and against a specific standard, it reveals the skills gaps that need to be filled if a company wants to reach its strategic goals.

Source: Unsplash

Based on competency assessments, businesses can decide whether they need to recruit new team members with core competencies or are better off developing skills internally by providing employees with training.

Why are competency-based assessments important?

Competency-based assessments are an extremely powerful method used by HR to evaluate strengths and weaknesses on a per-employee and team level. Let us shed light on the benefits of running competence tests, and assess the risks associated with the lack thereof.

Benefits of running competency tests

Creating a skills inventory

Let’s assume you’re a software consultancy and your objective is to become the #1 provider of Python development services on Capterra within the next 2 years. Where do you start?

You can conduct a self assessment and skills audit to check how proficient each employee is in the technology. This way, you’ll have hard data on how far from reaching this business objective you are so you can design a complete plan to get there.

Identifying skills gaps

Competency tests will often reveal that your team lacks not just hard skills, but also soft skills like communication and a team attitude. For instance, one of your employees might have what it takes to become a team leader as far as hard skills are concerned. However, their communication skills might be below the required standard. Knowing this will keep you from filling a senior role with someone who lacks the stamina to run a team. From there, you can make a conscious decision whether you want this person to work on that skill or take another course of action.

Creating better training plans

A common mistake that companies lacking competency assessments make is sending the entire team to the same training. The problem being that not all team members need it, as they might already be knowledgeable about the subject.

With competency assessments, you can not only save your employees’ time but also direct them to a better-tailored training that fits their skillset. Another advantage of the competency model? If you conduct competence tests continuously, you’ll be able to evaluate whether the training has, in fact, enhanced your employees’ skills.

Creating better training plans

Source: Unsplash

Designing career paths

If you know what skills your employees possess, you can design career paths for them. This will boost motivation, with employees feeling a sense of purpose in the organization. With a clear understanding of your current team’s skills, you can also start planning career paths for new employees. This will help you establish an attractive employer brand.

Saving on recruitment

Last, but not least, if you can fill a skills gap with your current employees, you’ll be saving on recruitment. Bear in mind that in IT, the costs of hiring a single employee can reach an astounding $32,000!

The risks of ignoring competency tests

Giving up on the competency assessment system can have serious business consequences. We’ll now discuss some of them.

High turnover

The main aim of conducting a competency assessment is to make sure that you hire the most suitable candidates. Those who possess the technical skills to perform the job to a certain standard. If you fail to incorporate a competency assessment data-based assessment in your recruitment, you might end up with underqualified or overqualified candidates. Both of which will most probably decide to leave your organization shortly after being hired. According to the Employee Benefits News, it costs employers 33% of a worker’s salary to hire a replacement for them, so there is a lot at stake here.

Lower employee morale

Let’s return to the above-mentioned scenario. High turnover usually has a bad impact on employee morale. Not only do other team members get upset about losing their colleagues but they’re also overworked as often, they end up taking over some of their responsibilities. Additionally, as more people quit their jobs, it might lead to a snowball effect, i.e., other employees following in their footsteps.

Poor reputation

The business world is not as large as it might seem. And the topic of high employee turnover is frequently discussed. It can create a poor reputation and negatively impact candidates’ willingness to apply for work at your organization.

Lack of talent development opportunities

Your employees are the driving force behind organizational growth. If you don’t regularly conduct skills assessments to check what abilities you have and which are lacking, you prevent employees from developing new skills. This can not only lead to less employee performance and demotivation, as talented employees want to learn continuously, but you’ll also inhibit business growth.

Longer and more costly recruitment process

As mentioned in the previous section, recruitment is a time-consuming and expensive process, as you have to verify both soft and hard competency-based interviews and skills. You have to involve a lot of people like HR, developers, team leaders, etc. If you spend a lot of time conducting in-person interviews to check the culture fit without verifying candidates’ tech skills first, it’s time wasted. Start with competency assessments and only invite suitable candidates to in-person interviews.

How to approach competency assessments

Now we can move on to discussing how to conduct competency evaluation. Let’s start with your current employees.

Assessing your current employees

Skills inventory

Begin your skills gap analysis by running a skills inventory with HR – remember to evaluate both technical and soft skills. This will show you what skill gaps your team has. It’s a great starting point to see which skills can be developed inside the organization and which must be acquired externally.

Skills gap assessment/analysis

Use a solution like TalentBoost to get a bird’s eye view of your company skills – either on a team or per-employee level. Based on your findings, you can decide how to proceed. Whether to conduct training, design the right career paths for your current employees, require additional training, or decide on hiring for the skills you currently lack.

Skills gap assessment/analysis

Source: TalentBoost

Assessing candidates

Work sample coding tests

Work sample coding tests let you evaluate candidates’ IT skills in the screening stage. With DevSkiller’s TalentScore solution, you can filter out applicants who have poor skills and focus the remainder of your recruitment on the very best candidates.

For the candidates you do decide to hire, you can use the skills assessment data and the information gathered at the recruitment stage to keep track of what they bring to the organization. One way of doing so is to merge your technical screening data with your skills management solution to create data-rich profiles.

Work sample coding tests

Source: DevSkiller

Soft skills evaluation

For candidates with high work sample test results, schedule a soft skills evaluation with HR and the hiring manager. This way, you’ll be able to check if the applicant seems like a good fit for the team.

Tech interviews

Once you’ve shortlisted your candidates, schedule a tech interview. You can conduct a pair programming session, where the hiring manager and/or tech lead works with the applicant on a live task. You can use TalentScore to organize pair programming remotely.

Tech interviews

Source: DevSkiller

Discuss career objectives

Before you decide to extend a job offer, schedule a quick call or meeting to discuss your candidate’s career objectives. You need to ensure that their interests and long-term goals align with the growth opportunities at your company and see how you can tap into them to keep the candidate engaged. While you might lose highly skilled candidates at the last stage, it might be for the greater good as you’ll prevent employee attrition.

Skills-specific employee onboarding

Last, but not least, focus your employee onboarding and training programs on skills that are either most important for the job from ‘day one’ or those that you want them to eventually develop.


Competency assessments help organizations become aware of the skills and skills gaps of their employees. This information is incredibly valuable from a strategic point of view for C-level, management, and HR. Firstly, it allows them to plan how they can upskill employees to avoid recruitment costs. Secondly, if they need to hire externally, competence assessments will help them craft candidate requirements for optimal results.

Competency assessments are also beneficial when it comes to rapid onboarding and additional training. Assessing a new hire as soon as they start or using the data obtained at the recruitment stage, will help you quickly establish the areas that need development. Furthermore, you can also use competency assessments to evaluate the effectiveness of training and tailor it for each employee.

Last, but not least, aligning the goals and specific competencies of the company with those of the individual will benefit both groups and boost employee satisfaction and retention rates. If you’d like to see how competence assessments can support your talent management strategy, give TalentBoost a try!

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