Should You Hire for Potential or Experience: Pros and Cons

Should You Hire for Potential or Experience: Pros and Cons

Hiring for potential is an increasingly popular buzzword that promises a more diverse talent pool, diverse and dynamic workforces, and a range of other benefits that aren’t always fully explained.

So what does hiring for potential mean, what are its pros and cons, and should you hire for potential in your business?

What Does Hiring for Potential Mean?

Man questioning what hire for potential means

Hiring for potential means placing more emphasis on the future capabilities of candidates, instead of looking at their existing skill set or years of experience. Important attributes under this approach include adaptability, willingness to learn, problem-solving skills, and cultural fit.

The candidate’s soft skills (or power skills) are also taken into account and much can be determined through capability assessments. Hiring for potential is especially useful in fast-moving industries where skill requirements are rapidly changing.

Hire for Potential vs. Experience

Hiring for experience, in contrast to hiring for potential, includes looking at a candidate’s past experiences and existing workplace skills. Key traits in this approach include technical proficiency, industry knowledge, and specific experience in the role.

Either approach could prove a benefit depending on the hiring company’s needs. Hiring for experience is a good idea when you need immediate productivity, or you want to bring existing knowledge into the organisation.

Hiring for potential is the better option if you’re looking to grow an employee into a role. However, a combination of these methods often yield the best results.

Hiring for Potential vs. Skills-based Hiring

Skills-based hiring sets existing skills as the main focus for recruitment. This approach foregoes looking at formal qualifications or experience as defining factors for candidates.

Skills-based hiring offers:

  • Immediate Productivity: Skilled employees can become productive in a role faster, with minimal additional training.
  • Clear Requirements: Skills-based hiring offers clear requirements that potential candidates must possess, and can be easier to implement.
  • Faster Hiring Process: Candidates with proven skills are easier to identify and test, streamlining the hiring process.

Hiring for potential may incorporate aspects of skills-based hiring, but existing skills are not the main focus. Intead, a variety of assessments can be used to identify potential in a candidate.

Advantages & Disadvantages of Hiring for Potential

Six Benefits of Hiring for Potential

There are several notable benefits to hiring for potential. These include:

  1. Adaptability to Change: High-potential candidates can learn and supplement skills faster. This instils more agility into your workforce and can make your organisation more adaptable in the face of change.
  2. Cultivating Excellence: High-potential candidates have the capability to excel in various roles. This can help to breed a culture of excellence within your organisation.
  3. Increased Engagement and Loyalty: Employees who feel invested in, on average, work harder and develop a sense of loyalty and commitment. This leads to higher retention rates and better performance, but relies on other factors such as management style and company culture as well.
  4. Cost-Effective Hiring: Experienced candidates often require higher salaries. By hiring high-potential candidates, you can save on wages while still building a strong and capable workforce. This can raise training costs, however.
  5. Long-Term Sustainability: Building a core team over time can ensure best-fit skills are developed and retained within your organisation. This approach fosters internal promotion and can aid long-term sustainability.
  6. Innovation and Fresh Perspectives: High-potential candidates can bring a fresh and innovative perspective to your business. This can lead to creative solutions to existing problems and propel your organisation forward.

Three Cons of Hiring for Potential

While hiring for potential is a great long-term strategy, there are potential cons to keep in mind. Some of these include:

  1. Increase Time to Production: High potential candidates who are inexperienced in their roles may take longer to become as productive as an experienced employee. This is highly dependent on the industry and complexity of the role, however.
  2. Higher Training Costs: Depending on the nature of your business, you may have higher training costs to get an inexperienced employee to complete competency. Internal training by utilising existing skills within your company can help to offset this cost.
  3. Inherent Uncertainty: Despite rigorous recruitment processes, there remains a level of uncertainty as to a high potential employee’s true potential and capacity for performance.

Should You Hire for Potential?

Managers debate whether to hire for potential or not

There are clear pros and cons when it comes to hiring for potential for future success. Is the lack of technical skills justified by the candidate’s potential? Can you realistically tailor your hiring process to ensure best-fit potential?

The following clear guidelines will help you navigate these questions and determine whether you should hire for experience or for potential.

You Have Time to Train

Excellence does not come easily. When you hire for potential, expect to spend at least one to two years training an employee into their role. This is an investment in the future, and a long-term employee development plan will be a core part of your process.

For roles where you need immediate results or production, it may be better to invest in experience.

You Have an Existing Pool of Experience

If you have a strong existing team with necessary skills and experience, it could make sense to bring in the new generation early. Adding fresh talent to an experienced workforce can help shape new employees in the image of what has worked well before.

If you have a lack of the specific skills you’re hiring for, investing in experience could be the better path forward. The alternative would be to hire high potential employees and invest in external training.

Your Business is Expanding Rapidly

During periods of high growth, it often makes sense to hire for potential. This can help to build a strong team with bespoke skills that can propel your business to the next level.

However, times of growth can be turbulent, and creating a skills matrix and training matrix can help keep things on track.

How to Hire for Potential in 5 Steps

Hiring for potential is a viable strategy. However, successful execution requires some planning and adaptation. Here are five practical steps you can follow.

  1. Determine What Potential Means to You: Figure out what traits or characteristics equal success in your organisation or industry. Look at your current most successful employees and consider which traits they display.
  2. Revise Your Recruitment: Revisit your job descriptions, screening process, and interview questions. Instead of gauging existing skills, ensure these processes are geared for uncovering potential as dictated in step one.
  3. Practical Tests or Work Samples: Consider adding practical tests to your recruitment process. These can be a great way to gauge current skills and measure the amount of learning and training that will be required.
  4. Onboarding & Development: Tweak your onboarding processes to cater to growth and development. Internal courses and training could be a great way to get a new employee up to speed, and can be managed effectively with a Cloud-based Learning Management System (LMS).
  5. Feedback Loops & Adaptation: Conduct regular assessments and collect feedback to measure and adapt employee development. This is another function that could benefit from an LMS with automation capabilities.

Hiring for the Future

Candidates at hire for potential interviews line up

Having an agile organisation that thrives off of change becomes more important as technology continues to evolve. This presents a strong case for hiring managers to focus on potential over experience.

However, this creates the need to invest more resources into training and development. Carefully measure the pros and cons, as well as the current needs of your organisation, and the best path forward will likely reveal itself.

Deliver Your Skills Training Without Compromise

2000 1000 Gianpiero Rusconi