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Top 5 ways to evaluate potential

Join CodeSignal CEO Tigran Sloyan and Co-Founder Sophia Baik in Data-Drive Recruiting Episode #41 as they discuss various ways to evaluate talent’s potential. In this episode you will learn about:

  • Why recruiters care about measuring candidate potential
  • Top 5 ways to evaluate potential – from worst to best 
  • What recruiters and candidates need to know about evaluating potential in the future

Why Potential Matters

“You’re ultimately hiring for potential because you’re aiming to have this person stay at the company and grow,” says Sloyan. “So what you’re really interested in is not only what they can do today, but what they can do two to three years from now.”  

While companies expect new hires to grow in their careers, most of the recruiting process today centers on performance and not potential. Sloyan and Baik discuss the top pitfalls recruiters make and how to avoid them in the following list from worst to best methodologies:

5. The Pedigree Approach

It’s easy to assume that if you have a household name university or company on your resume, you must have high potential. It isn’t easy to get into top tier institutions, so while that conclusion is logical, it eliminates a lot of high potential talent unnecessarily. “You end up competing with other firms for a very small percentage of talent and complain there is a small pool of talent; but really, there is a small pool of pedigree,” notes Sloyan.

4. Past Achievement Fallacy

Evaluating a candidate’s past achievements as a proxy for future potential is better than the pedigree approach but still riddled with subjective bias. In this approach, the interviewer must evaluate the candidate’s achievement but may not totally understand it based on their world view or see it the same way as another recruiter. They could also be coming from a difficult meeting, or be sleep-deprived that day, or a number of things which may impact their evaluation. This approach is also limited by the candidate’s ability to effectively explain their past performance. Some candidates simply don’t interview well, and are removed from consideration prematurely when in fact their skills and culture fit are an ideal match for the company.

3. Relying on References

References do a reasonable job of validating candidate potential, albeit in a unique situational context. Some Silicon Valley recruiters favor this method exclusively because it cuts down the hiring timeline, referrals tend to stay at companies longer, and it is a nice perk for current employees. Referral hiring is an efficient closed-loop system that works well for everyone — unless you don’t have the right resume or network to get the job. This method doesn’t help diversity, and diverse teams who collaborate tend to perform better and are happier at work.

2. Standardized Assessments – Snapshot (measuring current skill level)

Assessments that fairly and objectively measure a candidate’s ability at a given moment in time are a better method for predicting potential that eliminate interviewer and candidate bias. Why is an objective measure of current ability a strong indicator of future success? Great skill is not inborn; it comes with tremendous practice and iteration. The discipline required to acquire and hone skills over time as well as “learning how to learn” indicates that a candidate will apply this same learning agility to future challenges. 

The main shortfalls of standardized assessments are they typically come too late in the hiring process, after candidates have been weeded out from resume reviews (Pedigree Approach) or referrals (Relying on References). Moreover, measuring current skill reflects the previous opportunities someone had to practice this skill, which is really a reflection on their access to education, friends, home life and overall environment. “People who haven’t had this opportunity thus won’t showcase their great potential,” says Sloyan. “They need the chance, time and space to live up to their potential.”

For software developer roles, CodeSignal’s General Coding Assessment is a great example of standardized assessment and it’s becoming an industry standard for university recruiting.

1. Standardized Assessment – Progress (measuring improvement over time)

We are not there yet, but the gold standard in hiring is the ability to objectively measure a candidate’s progress over time like in a longitudinal study. If you can measure change in ability, then you can see how a skillset has evolved over time and assign a quantifiable skills growth percentage. Evaluating a candidate’s current skill level (Standardized Assessments) plus this growth rate is a sound future predictor of where he or she will be.

Practically, how might recruiters do this? It starts with the candidates and shifting to a model in which the candidate owns their own data and progress report over time. Take the TOEFL English proficiency exam, for example. If the candidate has their historical data from a first and second occasion of taking the exam, that delta could be an indicator of future growth potential. This approach also empowers the candidate to be the steward of their own data and development.

Alternatively, companies may measure candidate performance on the job and reassess after the candidate’s first year or other appropriate time intervals; the challenge is the difficulty in implementing such a cohort approach at scale.


The Pedigree Approach; Past Achievement Fallacy; Relying on References; and Standardized Assessments: none of these approaches in isolation can effectively evaluate candidate potential, and they exclude a large pool of qualified candidates who may have simply lacked the opportunity to showcase their skills in the past. It is time for us to rewrite the rules of talent potential assessment with a data-driven and candidate-centered approach.

Learn More

Want to learn more about how you can build a winning organization through data-driven recruiting? Visit CodeSignal to go beyond resumes in technical hiring with our state-of-the-art assessment platform and advanced coding tests.