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The end of traditional recruiting

We know from the media and discussions with managing directors and HR managers how difficult it has become in recent years to find good specialists and managers.

How to overcome the skills shortage with potential management

An article by Michael Kühner and Manuel Schuchna for the Euroforum e-book “GmbH Management 2023

Winners and losers in the race for specialists and managers

We know from the media and discussions with managing directors and HR managers how difficult it has become in recent years to find good specialists and managers. Recruitment methods are becoming ever more creative, employer branding ever more sophisticated and incentives and benefits for new employees ever more sophisticated.

Who are the winners and losers in this competition?

In any case, the “winners” are the well-trained specialists and managers on the market, who can now largely choose their jobs and also make demands that are
This can cause many a decision-maker to break out in a sweat, as he or she must simultaneously maintain a balance in the context of the existing workforce with corresponding demands for fairness.

The “losers” are at least those companies that are currently suffering from high cost pressure (particularly as a result of the current crises) and still need staff to maintain their performance levels.
and expand it for future topics. To a certain extent, “losers” are also companies that are in a growth phase or have the potential to grow more.
products and services and deliver them to the market. Here, too, the limits to growth are the urgently needed skilled workers.

However, “losers” are often also those applicants who are willing to perform but have less highly regarded qualifications or experience.

A look at the job market is a good indication of how companies are dealing with the shortage of skilled workers. Approximately 90% of job advertisements still consist entirely of qualification and experience requirements.
requirements, apparently combined with the hope of getting a few “crumbs” from the applicant market pie.

The better alternative: recruiting potential

A few companies seem to use a different strategy to get perhaps not “ready” but “good” people. They rely on career changers, people from outside the field
disciplines or give applicants with little experience a chance.

Is this out of pure necessity or is there actually a recipe for success behind it?

We know from individual discussions with the managing directors of such companies that this approach has actually been very successful. An IT entrepreneur with almost 100 employees told us that he has not been able to find enough qualified applicants for a long time. He therefore relies on lateral entrants who are trained and qualified internally. A more arduous path, but ultimately worthwhile and profitable.

We call this approach, which these companies are already taking, potential recruiting!

It is easier to find people with potential, the salary level in the company remains stable and new employees reward good induction and training with loyalty (although studies are still lacking here).

The challenge for this approach is now how to effectively find out which applicants have potential and which do not, because training and possibly longer-term qualification naturally takes time and also costs money, making this investment all the more important.
becomes more effective the better the right high-potential employees are identified.

This leads us to take a closer look at the topic of potential recruiting and potential management. What does potential mean in contrast to competence? What is the ideal way to identify the required potential with a high success rate?

The difference between potential and competence – an animal example

When we talk about potential and competence, misunderstandings are inevitable. This is due to the fact that both in the scientific debate and in the entrepreneurial debate, the
In practice, there are very different ideas about what is meant by this. So as not to drift into a theoretical debate on this topic that is largely useless in practice,
the following statements do not claim to be objectively correct in a scientific sense, but rather represent a perspective from practitioners for practitioners.

The question of distinguishing between potential and competence is of fundamental importance for practical application. To illustrate this, we will choose an unscientific example from the animal world.

A penguin, a snail and a cheetah are invited to take part in a selection process. As is often the case in such procedures, exercises are used to find out how good each candidate is. After all, it’s about nothing less than the next step in your career, where a job as a
“Distance overcomer” is on the horizon. For cost reasons, it was decided that the procedure would consist of only one exercise: All three candidates are to cover a distance of 50 meters as quickly as possible on
on a level path. For the decision-makers, it is already clear before the exercise who will come out on top. Thanks to their many years of experience, they have a good feel for the suitability
of candidates for certain tasks. However, in order to give all candidates the same opportunities and not expose themselves to accusations of bias, they adhere to the specified
Selection process. The exercise starts and the candidates overcome the distance so well,
as it is possible for everyone. For reasons of equality of opportunity, it is of course necessary to wait until all candidates have completed the exercise, even if it is already apparent in the meantime that the
common sense makes no sense. And so the process drags on for several days until the snail is able to complete the exercise.

Both the penguin, the cheetah and even the snail demonstrated the skill of “overcoming a distance”, albeit to varying degrees, but all were able to complete the exercise. Competence is generally understood as a consciously or unconsciously retrievable ability to behave in a goal-directed manner, whereby this goal-directed behavior can be observed and evaluated on the basis of behavioral anchors. It is objectively true that all three animals – albeit at different levels – demonstrated the ability to cover a distance by land.
but this knowledge is of little help in practice. Insofar as training courses are then offered to increase competence, this sounds funny at best, rather sarcastic, in relation to the snail. When something like this takes place in lived corporate practice, it’s no longer funny. For the person in question it is a pain and for the company it is money thrown away.

This is where the term potential comes into play. While the competence in the example described was the demonstrated and perceptible overcoming of the 50-meter distance, the
potential is reflected, for example, in the gut feeling of managers who, based on their experience with tasks and employees, deduce from the recognizable prerequisites of each animal its potential to develop.
have concluded the development of competencies. Of course, nobody would send a snail on a short-distance run in real life. That is clear. But it doesn’t seem to be that clear in all companies. In the case of animals, it is still quite easy to determine their potential, i.e. the skills required for competence.
personal basic requirements, because the physique reveals this at first glance.

Even if not in the same way, talent scouts from sports clubs assess the potential of young athletes in a very similar way. A small person has less potential to become a successful basketball player, and a muscular giant on the back of a racehorse is more likely to bring the mount to its knees than to be the fastest across the finish line at a gallop.
If, on the other hand, the two athletes described become active in disciplines that match their physical potential, they are very likely to experience a steep learning and performance curve.

It is not always easy to assess the potential of applicants with the usual skills in the corporate context. Because potential is never absolute, but always relative and directed towards a specific target profile. The question “For which target profile is an applicant a high potential?” leads further. Behind this question lies the request for an analytical reflection of the applicant’s potential profile with the skills profile of the intended target profile,

The penguin from our example helps to understand this analytical process in practice. This penguin is a high potential. Not for short-distance running on land, of course, but instead for the competence of swimming (e.g. core competence of target function B).

Potential is multi-layered

Again, what seems simple in the case of animals requires well thought-out, multidimensional analyses in the context of the world of work. Different potential factors are considered depending on the task or job profiles and the competence profiles derived from them. While the potential of the penguin and the snail for the competence of short-distance running can be assessed on the basis of leg length and anatomy, potential factors from the area of character traits, values, drivers, cognitive abilities and affinities are used in the entrepreneurial context. In order to be able to make a reasonably reliable assessment of the potential, it should be analyzed from several perspectives, i.e. on the basis of
of different potential factors.

The following diagram shows how multifaceted potential is. We know very well from sport that talent alone, as they often say, is not enough. Talents are merely well-developed
Basic skills (e.g. physical constitution, basic speed, ability to react, etc.). In addition to affinities, values and motives, the ability to self-learn and reflect are just as important,
Willpower and stamina. In sport, the term “eternal talent” is used when potential is not translated into consistent performance. It is important to realize the potential of
and not just reduce it to individual factors.

Strengths-oriented employee development – from potential to competence

Potential management now begins with looking at the opportunities for skills development on the basis of potential profiles. However, potential profiles do not guarantee successful competence development, but they significantly increase its probability.

A cheetah has an exceptionally high potential for short distance sprints. But if this cheetah is locked in a cage in the zoo, it will not be able to develop its potential. In this respect, potential management can identify promising competence development prerequisites, but even the best potential management cannot forcibly open cages or conjure up changed framework conditions. Sometimes, however, potential management helps to convince a zoo director, based on facts, that the cheetah is better off in the savannah than in a cage. In such cases, zoo directors may free animals from restrictive conditions and place them where they can best develop their potential.

Potential management can therefore be understood as strength-oriented employee development and promotion. If a penguin then applies for the position of short-distance runner, they need
company not to conduct a selection procedure in order to embarrassingly display the Penguin’s job-related deficits for all to see.

Potential-oriented employers offer such a penguin applicant a potential analysis, create a potential profile and then use their potential management system to see which
target profile is best suited for the penguin and advise him from a potential perspective: Which competence(s) could this penguin develop with joy, ease and success? In which jobs can these competencies be found?

When the penguin realizes that it is about him and his potential development, then potential and competence management is not only an effective tool, but also a culture of value and competence management.
appreciation and humanity. Penguins, snails and cheetahs that are treated in this way by their employers reward this appreciation with lower staff turnover, lower sickness rates and lower costs.
rates and significantly higher productivity. If competence management is then based on such potential management, potential recruiting and development not only makes
not only makes sense, but also generates a high return on investment. These people are happier and highly motivated at work.

If you would like to find out more about potential and competence management, you will find further information in the book of the same name by the co-author of this article, Manuel Schuchna, published by
Schäffer-Poeschel Verlag: Innovative potential and competence management: With affinity profiles to better personnel decisions.

For more exciting insights, take a look at our best practice section.

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