A competency-based interview is a structured interview method that focuses on evaluating a candidate’s ability to demonstrate specific skills, behaviors, and attributes required for success in a role. Rather than asking hypothetical questions, this approach asks candidates to provide real-life examples of how they’ve handled situations in the past.
For small business owners, this style of interviewing offers a practical, consistent, and results-focused way to assess candidates fairly and effectively. Unlike casual interviews that rely on gut instinct, competency-based interviews provide clearer insight into how someone will actually perform on the job.
With Homebase, employers can easily manage every step of the hiring process, from job postings to onboarding, and bring structure to interviews by tracking notes and comparing candidates using standardized criteria.
Why use competency-based interviews?
In a small business setting where every hire can significantly impact team performance, culture, and customer experience, choosing the right person is critical. Competency-based interviews offer several key advantages:
- Improved consistency – Every candidate is asked the same core questions, making comparisons easier
- Reduced bias – By focusing on specific behaviors and results, hiring decisions are less influenced by subjective impressions
- Better prediction of job success – Past behavior is often the best indicator of future performance
- Clearer insight into soft skills – These interviews reveal how candidates handle teamwork, pressure, communication, and decision-making
- Support for compliance – A standardized interview process helps avoid legal pitfalls related to hiring discrimination
How competency-based interviews work
Competency-based interviews typically follow the STAR method, which guides candidates to structure their responses with:
- S – Situation: What was the context?
- T – Task: What were you responsible for?
- A – Action: What did you do to address the situation?
- R – Result: What was the outcome?
Common competencies to assess
The competencies you focus on should reflect the demands of the role. For small businesses, particularly in customer-facing or operations-heavy roles, these are often critical:
- Customer service – “Tell me about a time you turned a negative customer experience into a positive one.”
- Teamwork – “Give an example of a time you had to collaborate with someone you didn’t get along with.”
- Time management – “Describe a time you had multiple tasks to complete under a tight deadline.”
- Adaptability – “Share a situation where you had to learn something quickly to succeed.”
- Problem-solving – “Tell me about a time you found a creative solution to a workplace challenge.”
- Leadership – “Describe a situation where you had to take charge without formal authority.”
Preparing for a competency-based interview
Effective competency-based interviews require a bit of preparation on the employer’s end. Here’s how to do it:
- Identify the core competencies for the role
- Develop 2–3 questions per competency using the STAR framework
- Set a consistent scoring system, such as a 1–5 scale for each answer
- Train managers or interviewers on how to prompt and evaluate responses
- Record notes or scores during the interview for easy comparison afterward
Potential drawbacks and how to address them
While competency-based interviews are powerful, they’re not foolproof. Here are a few challenges and tips to overcome them:
- Candidates may struggle to recall examples – Offer prompts or give them time to think before answering
- Some applicants may be less practiced with STAR – Don’t penalize structure; focus on the substance of the response
- It can feel overly formal for small teams – Use conversational tone while still asking structured questions
- May miss potential in less experienced candidates – Balance behavioral questions with situational or values-based prompts when appropriate
How Homebase supports structured hiring
Homebase gives small business owners the tools they need to manage hiring from end to end—making it easier to adopt structured interview methods like competency-based interviews.
With Homebase, you can:
- Post jobs to multiple job boards
- Collect and organize applicant information in one dashboard
- Add custom screening questions
- Schedule and track interviews
- Standardize evaluation with notes and scorecards
- Move candidates into onboarding in just a few clicks
Explore Homebase Hiring and Onboarding to build a more structured, consistent, and effective hiring process that helps you find the best candidates faster.