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Hazloc Heaters

Competency versus Credentials – The Talent Acquisition Shift – Wendy Ferguson

A Commentary by Wendy Ferguson – BHRLR, CPHR

My attention was captured recently when I heard that a growing number of employers are joining the ranks of Google and embracing a major shift in their hiring practices.  Leading companies that once required that candidates possess a university or college degree (such as Apple, IBM, Ernst and Young, Penguin Random House, Costco, Hilton, Starbucks, Nordstrom and Home Depot) no longer mandate academic credentials when hiring for positions that range from entry-level all the way to more senior management roles.  They are offering well-paid jobs to those with the right skill-set or experience versus the credentials.  Interestingly, I also recently heard of “no-resume hiring fairs”, where candidates are hired based on their demonstrated skills – not their resumes or credentials.  Forbes magazine indicates that “the shift from degree-based and pedigree-based hiring to competency-based hiring is accelerating”.

So what is competency-based hiring?  It’s an approach that starts with identifying the skills required for a role and then seeking candidates that have the necessary skills or knowledge to do the job successfully (with or without a degree) depending on the position.  Obviously, we wouldn’t tolerate a surgeon operating on us without the proper credentials, but even surgeons don’t perform surgeries when school lets out!  They spent 3 to 10 years in residency because the credentials simply aren’t enough…they must adapt the skills and techniques…acquire the experience.  We know we can’t hire someone to practice law when they are not a lawyer – for those of you who have watched the show “Suits”, you know the catastrophe that ensues.  However, we are able to change the requirements for many jobs.

The latest trend we are seeing is companies re-assessing their job base to determine what is really required to do each job successfully.  We should consider what is the most important factor in determining success in each job?  Is it: formal education? number of years of on-the-job experience? capability? competence? attitude?  Most likely a combination of these, but probably to varying degrees.  This could mean that a person who may not have exactly the “right” credentials, but does have the best competencies (such as communication skills, adaptability, drive for results, critical thinking skills) could be offered the job over someone with a degree.

Yes, of course academic qualifications will always be considered and remain important, but when assessing candidates, they may no longer be a barrier in some organizations.  Without a doubt, a degree or diploma certainly validates commitment and follow-through.  An individual has passed their courses and exams and they are now considered to be at a certain level of professionalism and credibility. However, Google has spent years analyzing who succeeds at their company and they claim that GPAs, transcripts and test scores do not predict a thing when it comes to job success.  In a company of 60,000, Google says 14% of its team members have never gone to college.  Yes, they require the smarts, but they don’t require a formal education to “fit” into the company.  They claim that formal education is “a worthless criteria for hiring”.  Laszlo Block, Google’s Head of People Operations says, “When you look at people who don’t go to school and make their way in the world, those are exceptional human beings. And we should do everything we can to find those people.”  Google seeks “learning ability” in their candidates by using structured behavioral interviews that predict success.  Equally, Ernst and Young view formal education as a “misleading indicator for hiring”.

Also, let’s be real…the cost of education has increased by 40% in the past decade and most students are graduating with a hefty load of debt (averaging $25,000 in Canada).  We currently have $28.3 billion of collective student debt in Canada.  Earlier this year BDO Canada indicated that 77% of Canadian graduates under the age of 40 have regrets about the money they spent in school (from a poll of 2,200 graduates across Canada).  College and university has traditionally been viewed as an investment that will lead to future benefits for individuals and society…a promise of employability.   The good news is that it is estimated that 55% of Canadians have some type of post-secondary education (higher than any other nation) and of those, 82% have jobs (OECD – Education at a Glance Report).  What type of jobs though?  There is a growing concern that graduates, especially in Alberta, find themselves under-employed or working in jobs that don’t even require a degree.  More than 12% of Canadians between the ages of 15 and 24 are unemployed and more than a quarter are under-employed.  It is certainly becoming a deterrent.  Not everyone can afford the time or investment in a formal education and some young people don’t want to spend years living in their parents’ basement, even if they have the smarts for university.

So how could changing the way we view hiring help us in Alberta?  Our federal government indicates that we currently have over 50,000 open jobs in Alberta, yet our unemployment rate still hovers around 8% (9% in Calgary).  That indicates that there is somewhat of a mismatch between available workers and current job openings. With Alberta’s growing population and high unemployment rate, perhaps now would be a good time for employers to consider shifting their way of thinking.

I encourage all employers to have a good look at each job and determine precisely what education and qualifications are really required to perform the job successfully.  Assess your recruiting tools – are your human resources information systems (HRIS)/recruiting tools filtering out excellent candidates given your strict search criteria?  Reconsider long-term training & development and mentorship programs.  Focusing on these could improve long-term employee retention.  Use behavioural interviewing techniques to discover how candidates have behaved and contributed in real-life work situations in the past to predict future work behaviour and performance.

It is frustrating to me when I continue to see job postings for positions such as administrators, sales/marketing, customer service, junior managers, assistants – many that I believe are unnecessarily requiring a bachelor’s degree with a $30,000 education price-tag. I also know countless highly-educated individuals that have been out of work for three years.  Having worked for a couple decades alongside outstanding executives, sales people, administrators, tradespeople, unskilled-labourers, both with and without degrees and varying in accumulated experience, I will attest to Google’s “school” of thought.  Learn what is working with your existing recruiting methods and change what isn’t working.  Be open and be creative!


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