Organizations face increasingly overwhelming hiring processes. Job openings receive hundreds of applications, and data shows 32% of resumes contain fabricated information. Due to this unreliability, companies are shifting their focus away from academic achievements towards real-world skills. Competency and skills assessments allow businesses to test for the soft and hard skills they need in their roles. As such, an estimated 82% of all organizations lean on assessments when hiring.

However, this reliance can backfire: Candidates must complete skills tests and assessments for every company they apply to, sometimes spending four or more hours per organization. By the time they arrive at yours, they may be too mentally fatigued to complete it well, or may give up on it entirely. You can’t ask too much or you risk losing applicants. Additionally, you have to have people and systems in place to assess the data you collect.

Narrowing down the specific information you need for a role will provide better insight as to what types of data you should collect so you can choose the right assessments to give. Skills and competency assessments are two of the most common forms of pre-hiring exams, and each meets different needs.

What Is a Skills Assessment?

Skills assessments are designed to measure a candidate’s technical ability, often through asking questions, giving a work assignment, or sometimes by asking someone else to assess the applicant’s work. Examples of skills assessments include:

  • Proficiency in a specific software
  • Skill level for a certain coding language
  • Performance of specific tasks
  • Familiarity with certain processes (e.g., Agile, Scrum)

Skill measurements can also take the form of mental ability assessments, where you test critical thinking skills, abstract reasoning, and other mental capabilities. These reveal critical insights into how someone would approach complex problems, long-term planning, or translating data for their role.

Skills assessments are a good way to identify technical skill or level, making them invaluable in roles such as coding, data analysis, planning, etc. However, they only test for technical competency; they’re not designed to identify soft skills like communication, time management, attitude, or work ethic, which might be more important than hard skills, depending on the role.

What Is a Competency Assessment?

Competency assessments check for soft skills, normally by asking questions and creating algorithmic results that showcase how a person thinks and acts. You frequently can build these tests around competencies that are shown to link to success in a particular industry or role, such as management or customer service. Many organizations choose to map competency assessments to their own values and preferences for soft skills. Common traits measured in this type of exam are:

  • Proficiencies
  • Learning patterns
  • Leadership/Managerial style
  • Personality traits
  • Time management

In some cases, soft skills may be more important to test for than hard skills, especially in industries that rely on the use of certain tools (which you can normally train for easily).

Organizations also use competency assessments to test for motivation, emotional stability, work behavior (both positive and counterproductive), and other traits. They allow you to identify strong and weak points in your candidates, better understand their interview answers, and gain deeper insight into how they might behave in a role.

When To Use Each

It’s important to test candidates in the areas most important to your organization, and in some cases, you may want to use both skills and competency assessments.

Competency assessments are great for checking broad organizational, team, and cultural fit. Meanwhile, if you have highly technical roles, skills tests let you filter and choose applicants based on demonstrated skill. They can also validate a promising candidate, even if they lack the experience or academic achievements you might want for the role.

Testing requires the involvement of team leads and managers in the hiring process as well since they know what constitutes competent work in a given role.

Competency Assessments:

  • Team and organizational fit
  • Aptitude for role
  • Cultural fit
  • Aptitude for industry
  • Leadership potential
  • Self-development potential

Skills Assessments:

  • Technical skill
  • Familiarity with programs and apps
  • Awareness of theory/rules
  • Language usage
  • Skill sets related to roles (e.g., management, supervision, customer service)

In most cases, giving competency assessments first and adding skills assessments later to check technical proficiency is a healthy approach. However, for highly technical roles, the skills assessments may be more important. So, if you want to limit how many tests you use, implementing a technical skills assessment may be more beneficial than a competency test.

Overall, it’s best to assess the role individually: Determine the information you need to match an ideal candidate to a position, then decide which test(s) would best acquire that data and showcase an applicant’s potential success in the role.


While both competency and skills assessments can significantly improve your recruitment process, you must have a system in place to map results to potential value for them to be useful. (Most companies have skill matrices associated with roles for this.) It’s important to be able to translate results from the assessments as well so you can compare them with the hard and soft skills associated with a position.

You also need to ensure the person translating that data knows how to interpret it; for example, make technical people a core component of technical hires. If you’re using skills assessments or assignments, you’ll need individuals with good insight into what quality work looks like. Additionally, if you employ competency frameworks, map competencies in a way that allows you to make logical, evidence-based hiring decisions.

Not every recruit will have all the proficiencies you want, and sometimes applicants with several soft skills may lack key hard skills. As such, you should create a prioritization framework based on how easy it is to train certain skills and if others are required or trainable.

Perfect candidates are rare. You’ll normally have to choose between traits, skills, and behaviors, which means dropping some desirable characteristics you want in a candidate. Choose assessments that fit your data-collection needs and hold individual discussions with team leads and managers to ensure you have the information necessary to make the best hiring decision for every role.