The Coming Paradigm Shift In Competency-Based Hiring: An Interview with Innovate+Educate


|

Posted In: Workforce Insight

Apr • 12 • 2017

The Coming Shift in Competency-Based Hiring

Competency-based hiring is an approach to talent management that starts with identifying the particular skills required in a role and then prioritizing assessments or credentials that look for those skills. It promises to empower employers to align recruitment around business results, rather than around résumés. On the other hand, competency-based hiring also empowers students, workers, and schools to establish and follow clearer classroom-to-career pathways.

 

As Jamai Blivin, Founder and CEO of Innovate+Educate, tells us in this interview, the practical application of this approach is getting its first tests in the real world. A growing number of employers are embracing the emerging assessments and credentials needed to make the shift.

 

Innovate+Educate programs encourage competency-based hiring on the demand side. They work with employers, local governments, and foundations to nurture a regional ecosystem that can focus on assessing and developing skills. The nonprofit’s vision is to help workers move out of poverty through entry-level to mid-level roles — and obtain the transferable skills that let them move laterally as needed when industries change.

 

For example, Earn Dallas is an Innovate+Educate program that coordinates the local workforce development agency and 12 major retailers. Supported by Walmart Giving, the Walmart Foundation’s state giving program, Earn Dallas assesses soft skills such as communication, critical thinking, and customer service using Core Score, a new assessment tool developed by Innovate+Educate. The Earn Dallas project then maps the soft skills to the competency-based training that may be available, such as a supervisory certificate program at Dallas Community College.

 

Because College for America’s degrees are competency-based and its mission has much in common with Innovate+Educate’s, we were interested in talking with Blivin about the relationship between hiring and learning in this new paradigm. Following is a condensed and edited version of our interview.

 

Which jobs does Innovate+Educate focus on?

 

The majority of open positions in the country are service jobs in retail, hospitality, restaurants and health care. You get tremendous competencies working in those positions, but nobody’s looking at the transferability of customer service from Walmart to a bank to a call center.

 

What led to developing Core Score?

 

We kept hearing from employers that “soft skills” were the problem. If employees had them, they were much more likely to do well on the job. We worked with multiple organizations to validate that these were the core skills companies use. We kind of built it on a FICO score model.

 

The other reason we did this is because employers are not willing to pay for this right now, so we knew it needed to be free. And it had to be free for the job seeker. So this is non-proctored, delivered on the phone, in English and Spanish, and takes about 15 minutes.

 

What types of competencies are you referring to?

 

Critical thinking, communications, customer service, adaptability, and drive for results. We’re building industry models on top of those called Core Score Plus. Those are in IT, healthcare, manufacturing, and public service/public safety.

 

There are approximately 160 underlying competencies. What we are trying to do now is map competency to training, and we have several partners. So if you don’t have these competencies, we can answer how to get the training.

One theory is that machine learning, predictive analytics, and artificial intelligence will reduce the number of those service jobs and that the few remaining will require much higher-order skills. Are you tracking that?

 

Yes, we are, and it’s definitely a big concern. It is quite daunting when you look at how technology is going to rapidly change retail, for example. It’s huge. If they get displaced from retail, then where does that worker go with their skills?

 

It’s critical that they have higher-order skills. We also have an advanced assessment of leadership and how to manage teams.

 

But the most important thing we are working on is transferability so that when one sector dies, you don’t lose all employment.

 

If a company wants to get more serious about competency-based hiring, is there data about return on investment?

 

The Hunter and Hunter study from 1984 showed that if you hire based on core cognitive components, it’s five times more predictive than hiring based on education. It’s an old study, and everybody knows it. The problem is the diagnostic tool for competencies is not there.

 

We have validation studies happening now at Lowe’s and Kroger to show the efficacy of hiring based on these skills. We’re piloting the use of our assessment as a credential for entry-level jobs with a university medical center.

 

The question is, if you hire based on core competencies, will you get a talent pool you wouldn’t have seen before? Will you get better time-to-hire, cost-to-hire, and performance? We haven’t proven it yet. We feel we’re going to be able to prove it based on the research and all the years we’ve been working on this.

 

Employers will invest a lot of money if we start showing that hiring and training costs go down. They pay for their own retail training and their own supervisor training now. But it will take a few years for these types of studies to show ROI.

 

If employers are going to get better at competency-based hiring, how do education and training need to evolve?

 

In the top 500 companies that have learning officers, there is a definite void in competency-based training. College for America is a leader in addressing that. So many Americans need flexibility in their learning. They can’t have four years of seat time and four years of tuition because it’s just not doable.

 

The community college and four-year systems haven’t figured out how to do it. One of the problems, even if they did develop a competency-based pathway, is they don’t know how to market it because that’s not what colleges are traditionally known for. People know what College for America is trying to do, so they’ve carved out a place in the market. But a traditional college is still seen as a barrier to entry because of time and money.

 

What can universities do differently to prepare students for a competency-based hiring environment?

 

Competency-based education needs to grow much more. We’re working more on non-credit solutions like modularized competencies.

 

Business wants to know you have the competency, not the degree. Business does not think that once you have the degree you have the skills. Unless you’re graduating from Harvard or Yale, they aren’t valuing the proxy of the degree from any middle institution. It’s being ignored.

 

How can employers interested in competency-based hiring get started?

 

The first thing the industrial-organizational psychologists and business psychologists on our team ask for is the hardest position to fill that is entry-to-mid-skill, and that you could drop the barrier of the four-year degree for. That is where you can shift to a competency-based model. Then our IO team does a competency map. We spend time with HR managers and division leads.

 

One of the most critical things is really just starting small and piloting.

 

Who is doing this well? Which peers can a chief human resources officer learn from?

 

The City of Albuquerque initiated WorkKeys (a competency-based assessment) and dropped the GED in their hiring, and have done incredibly well.

 

Walmart is doing a lot of lifelong learning and they partner with Cengage, which is offering a competency-based high school diploma.

 

So there are some random acts of competency-based hiring and training. But it’s early days in this paradigm shift.

 

There’s an army of good people trying this, and it’s becoming an imperative because companies can’t find talent in the old way. It’s going to get more and more painful. The shift is going to happen. But proving the ROI to businesses is the most important thing right now.

 

Robert McGuire operates McGuire Editorial Content Marketing Agency, which specializes in education technology companies and nonprofit organizations working on learning, training, and talent development.