Hiring on potential makes more effective employees, according to 1 in 2 employers

Excluding candidates who do not possess all the technical skill requirements can eliminate a large section of strong candidates. This is driving 82% of Australian employers to hire candidates who do not meet all the technical requirements for the role based on their ‘potential’, according to new independent research by specialised recruiter Robert Half .

  • 82% of surveyed Australian business leaders have hired a candidate based on their potential who did not meet all the technical requirements for the role
  • 46% said the employee exceeded the potential of one who did hold all the technical requirements
  • 43% stated they reached their full potential as fast as an employee who held all the technical requirements
  • 2% had a negative experience when hiring on potential and will not do it again

As business recovery efforts ramp up, companies cannot afford to leave a role vacant. However, Australia’s severely skills-short market is making it increasingly challenging for businesses to secure the ‘perfect’ candidate whose technical experience and resume perfectly align with the criteria of the role.

Excluding candidates who do not possess all the technical skill requirements can eliminate a large section of strong candidates. This is driving 82% of Australian employers to hire candidates who do not meet all the technical requirements for the role based on their ‘potential’, according to new independent research by specialised recruiter Robert Half .

How does an employee hired on potential compare to one with technical expertise?

When hiring on potential, businesses are actively committing to training to develop the technical aptitudes of the employee in order to enhance their skills and align their abilities with the requirements of the role. According to Robert Half research, 9 in 10 (89%) employers who hired a candidate based on their potential - rather than technical expertise - and provided the necessary training had a positive experience.

Almost half (46%) felt that the candidates exceeded the potential of an employee who did meet all the requirements for a role, while more than 4 in 10 (43%) felt the candidate reached their full potential as fast as an employee who met all the requirements.

Of those who had a negative experience, 9% felt the employee did not reach the potential of an employee with the technical expertise but would be willing to hire on potential again, and only 2% had a negative experience and would not be willing to hire on potential again.

Why do companies hire on potential?

Some of the main reasons a company would hire a candidate on their potential include: to fill a vacant role at speed with the intention to develop skills internally; to expand the available talent pool for a hard-to-find skillset by considering candidates whose skill level is underdeveloped but relevant; to secure a candidate with a strong cultural alignment and developed soft skills; and to secure a candidate with adjacent skills to grow into an emerging technical field.

“For many in-demand roles, the ‘perfect’ on-paper candidate is expensive, elusive, unavailable, or simply non-existent. The pace of digital transformation is evolving technical skills at an incredibly fast rate that is difficult for traditional qualifications to keep pace with, so evaluating candidates’ tech skills on tenure or formal accreditations alone is unsustainable. Not only that, excluding candidates who are a few years shy of the technical role requirement can eliminate a large section of strong candidates. By the same token, years of experience is not synonymous with excellence or past successes.”

“Hiring a candidate on their potential is not a Plan-B mechanism for recruiting in a talent-short market. It’s a cost and time saving hiring strategy which, in many cases, has led to a more effective employee than hiring the technically skilled candidate who could potentially command a higher salary. A candidate being hired on potential may also bring a fresh perspective to the role, and with diversity of thought often comes results,” says Nicole Gorton, Robert Half Director, in announcing Robert Half’s latest survey results.

Robert Half outlines three questions employers should ask themselves when evaluating candidates on potential:

Do their existing skills feed into what the role requires, and how quickly can they be trained on the missing skills?

Hiring on potential doesn’t override the importance of technical expertise to a role. Employers should make a distinction between the ‘must-have’ and ‘nice-to-have’ competencies, overlaid with a timeline for when these skills are required. This supports them to assess candidates on whether their existing skills align with the ‘must-have’ or ‘urgent’ skills, as well as what investment will be required from the business to develop the ‘nice-to-have’ skills.

Businesses should seek out candidates who have shown an appetite for development and possess a constant learning mindset who will embrace and apply professional training to their role at speed. Digital transformation will evolve every department and industry so an appetite for knowledge will be a valuable mechanism in ‘future-proofing’ a team.

Do they enrich and extend our team capabilities?

A strong team is a sum of its parts, not a list of shared attributes. Businesses should assess what capabilities the candidate will introduce – based on prior professional experience or soft skills - and how it will complement or evolve the team.

Soft skills such as communication and negotiation, teamwork, creative problem solving and adaptability are valuable assets, due to their role in influencing organisational stakeholders and making data-driven, strategic decisions. Experience in ‘adjacent’ technical skills provide a strong foundation to develop niche abilities while a demonstrated embrace of digital transformation to improve their efficiency, insights or results in a role suggests a ‘future-proofed’ mindset that can evolve at pace.

Do they align with the company values?

You can show someone how to use a program, but you can’t teach them to be a good cultural fit. Recruiting a technically skilled candidate who doesn’t align with the company style – for instance someone who thrives in a structured and hierarchical corporate environment for an agile and autonomous start-up role - will just lead to dissatisfied, unmotivated employees who will be open to changing roles down the line. Hiring managers could use the interview to ask questions such as why the company message resonates with the candidate or their thoughts on the values a company represents.