10 Key Leadership Competencies & How to Evaluate Them When Hiring

Finding the right leader for your company is crucial. Whether it’s for the entire organization or a specific department, you need someone who can bring vision and drive results.

But how do you ensure you find the next Steve Jobs instead of Elizabeth Holmes? 🙈

To assess leadership candidates more effectively, identify their strengths, and choose the best person to take your organization to new heights, let’s explore 10 key leadership competencies to evaluate during your hiring process.

TL;DR — Key Takeaways

• Leadership competencies encompass a combination of skills, knowledge, and behaviors that define effective leadership.
• Unlike standalone skills, competencies blend interpersonal and technical elements applied to real-life challenges.
• Evaluating candidates effectively requires a mix of interviews, behavioral questions, skills tests, and scenario-based assessments.

What are leadership competencies?

Leadership competencies refer to the skills, knowledge, and behavior needed to be an effective leader of an organization and its people. The right set of leadership competencies is essential for guiding and motivating teams and driving them forward to achieve organizational success.

Think of leadership competencies as ingredients in a recipe. Not every organization will be making the same meal. Some companies, or even industries, will need a specific mix of competencies based on their goals and priorities.

For example, an organization needing to build out a robust succession planning strategy may focus on leadership development from its junior ranks upward. On the other hand, companies focused on improving employee retention rates may require leaders with advanced mentoring competencies to progress individual careers within the organization.

For this reason, effective leadership strategies often use a competency model framework to select the core competencies they need.

Are leadership competencies different from leadership skills?

Confused about the competing terms you’ve heard? Leadership competencies are different from leadership skills, but they’re both super important.

While leadership skills point to specific abilities like public speaking or financial modeling, leadership competencies are broader. They blend skills with knowledge and behavior and then apply them to real-world challenges.

What does it mean to be a “great leader?”

A great leader in one organization might not be as effective in another company. That’s because the right leader depends on your goals, team dynamics, and industry influences. Even so, certain traits are universal in separating a great leader from the rest of the pack.

Great leaders retain their employees

Retention is an ongoing issue for companies as modern employees prefer to seek new opportunities rather than being “stuck” with a work situation they can’t stand. While a team member may choose to jump ship for many reasons, bad managers will significantly impact the employee experience. In fact, 27% of employees would happily replace their manager.

Great leaders engage their team members

Keeping seats filled isn’t the only positive outcome of effective leadership. A good leader will also know how to motivate and inspire each individual under their wing. Gallup’s research finds that 70% of a team’s engagement relates directly to the quality of their management. That can be the difference between an employee who’s constantly clock-watching and one who’s excited to show up and produce their best work.

Great leaders produce results

When employee turnover is low, and your team members are motivated and have a strong relationship with their leaders, it makes sense that they achieve results for your company. The proof? Korn Ferry Institute’s research on organizational transformation revealed that over a five-year period, a 25% difference in financial performance was attributed to trust in leadership. How’s that for a competitive advantage?

Do you need a specific type of leader for your organization?

We wish we could answer that for you! However, the best leadership style for a particular team or organization will depend on many factors, including the size and structure of the organization, the nature of the work, and the personality and preferences of the employees.

Some common leadership styles include:

Leadership Style	Description
Autocratic	Make decisions independently without much input from others
Bureaucratic	Listens to the employees’ input but may reject it if it doesn’t align with company policy or past practices
Coaching	Focuses on identifying the individual strengths of each team member and emphasizes individual employees’ success
Democratic/Participative	Involves team in decisions and seeks input and feedback, effectively building trust and engagement
Laissez-faire/Delegative	Gives team autonomy and minimal guidance (this works with skilled and motivated teams)
Authoritative/Transformational	Inspires and motivates the team with vision and goals to develop members and drive change
Transactional	Rewards or punishes based on performance (particularly effective in motivating employees to meet goals)
Servant	Prioritizes team needs and supports and develops team members
Charismatic	Inspires and motivates with personality and charm to build strong emotional connections with the team
Situational	Adapts style to situation and team needs; they effectively respond to changing circumstances
Strategic	Uses vision, competitive awareness, and adaptability to manage teams and achieve business goals
Pacesetting	Pacesetting leaders set high standards and expect employees to meet them; they may step in to ensure things are done correctly and on time

Great leaders understand the strengths and limitations of each style and can adapt their approach based on the needs of their team and organization.

An effective leader falls into one of three leadership competency categories

Let’s imagine you have a mediocre or even subpar leader in your organization. What competencies do they need to elevate themselves into the effective leadership role category? The list of possible competencies falls into three main categories.

Competencies for leading the organization

Competent leaders are the figureheads for the entire business, capable of driving innovation and steering the ship through organizational change when necessary. The right set of leadership-level competencies will include the ability to craft strategies and align teams with business goals.

Competencies for leading others

Besides flexing their business acumen, effective leaders must also have exceptional people-facing skills. Similar to HR professionals, leaders should be equipped with interpersonal skills that enable them to motivate their teams.

Competencies for leading the self

Exceptional leaders know their work is never complete, and they never stop trying to up their game. They regularly reflect and take self-assessments to ensure they’re continuously improving and building strong partnerships with their people.

10 key leadership competencies to hire for in 2025

While we encourage you to select competencies that match your organizational goals and current gaps, here are ten of the most important leadership competencies you might focus on this year.

1. Emotional intelligence

Emotional intelligence (EI) is a vital trait for effective leaders as it involves understanding and managing one’s own emotions, as well as the emotions of others. Leaders with high emotional intelligence can build strong relationships and relate to their employees.

2. Social intelligence

Social intelligence, also known as social quotient or SQ, is the art of reading the room. This competency involves reading social cues to behave appropriately in any given situation. While useful as a standalone competency, it’s even more powerful in combination with emotional quotient (EQ) and intelligence quotient (IQ), equipping leaders with a broader set of competencies than their counterparts.

3. AI literacy

Instead of delegating remotely anything technical to IT teams, modern leaders need to understand how to integrate AI effectively. According to Kornferry, 65.5% of global leaders are excited about AI’s impact on their work. In particular, 73% of CEOs and 80% of senior executives believe AI will elevate their value in the next three years.

4. Agility

Agile leaders thrive in fast-paced, unpredictable environments. They adapt to change quickly (did someone say pandemic?) and encourage their teams to embrace new challenges and opportunities.

Learning agility forms a key part of this competency, which the Center for Creative Leadership defines as “Knowing how to learn—knowing what to do when you don’t know what to do. It’s about learning from experience and applying it in new ways, adapting to new circumstances and opportunities.”

5. Communicative intelligence

This is more than just “being a good communicator.” It’s about adapting your message to suit different audiences and ensuring clarity in every interaction. In an HBR article about “How Great Leaders Communicate,” Carmine Gallo points to the leadership of Amazon boss Jeff Bezos as someone who uses short words to discuss complex topics, ensuring his message is never lost in translation.

6. Analytical thinking

Analytical leaders excel at breaking down complex problems, spotting trends, and developing data-driven strategies. They combine logic and creativity to navigate challenges effectively. Analytical thinking is a competency that spans multiple skill sets. For example, Springboard reports that data analysis is the most in-demand hard or technical skill.

7. Change management

Whether it’s implementing a new strategy or navigating organizational restructuring, change management skills are essential. Leaders with this competency minimize disruption while keeping teams aligned and motivated.

8. Conflict management

Conflict is inevitable in any workplace, but skilled leaders approach it as an opportunity for growth. It’s not always easy, but strong leaders mediate disputes, find common ground, and maintain harmony while addressing the root causes of conflict.

9. Innovation

Innovative leaders think outside the box and encourage their teams to do the same. They foster a culture where experimentation is encouraged, and failure is seen as a step toward success. After all, “the fastest way to succeed is to double your failure rate,” said IBM’s CEO Thomas Watson.

10. Coaching ability

A great leader’s success isn’t measured solely by their own achievements but by how well they elevate others. Leaders with strong coaching skills empower their teams and deliver feedback that helps their employees grow professionally.

10 tips on what to look for when evaluating leadership competencies in candidates

Let’s be real: finding the next Rosalind Brewer or Ray Kroc is next to impossible. These people – titans who changed the business landscape – are always self-starters and incredibly rare. However, you can find future employees who have founder-like qualities.

You’ll get an inkling of who is right because they will display strong leadership skills. Let’s run through the top tips and skills to look out for and how to best evaluate them when hiring.

1. Decide if you need a visionary or a pragmatic

When hiring for leadership positions, it’s crucial to determine whether a candidate possesses a visionary or pragmatic leadership style. Each style has its own strengths and approaches.

Visionary leaders

Visionary leaders are able to see the big picture and create a compelling vision for the future. They are often known for their creativity, innovation, and willingness to take risks. A notable example of a visionary leader is Steve Jobs, who recognized the potential of personal computers and iPhones.

Pragmatic leaders

On the other hand, pragmatic leaders are more focused on the business’s day-to-day operations. They excel at problem-solving and making sound decisions, ensuring the effective execution of plans. Warren Buffett serves as a famous example of a pragmatic leader who has successfully built an investment firm over many years.

2. Dissect their communication style

Influential leaders can communicate their vision and ideas clearly and concisely. They are also skilled at active listening and understanding the needs of others.

To assess a candidate’s communication skills beyond the interview, consider skills testing and homework assignments:

• Skills tests can help identify the candidate’s abilities in active listening, communication, observation, and feedback.
• Homework assignments, like asking the candidate to give a presentation on a topic of their choice, offer the chance to observe how they interact with others in a group setting.

Oprah Winfrey is a prime example of a gifted communicator who can tell stories and connect with people from all walks of life.

3. Understand how they make decisions

Effective leaders possess the skill to make well-informed decisions – quickly. They carefully consider and weigh the advantages and disadvantages of various options before selecting the optimal course of action for the organization.

Jeff Bezos is widely recognized as a successful leader for his capability to make decisive decisions swiftly.

As a senior executive, you get paid to make a small number of high-quality decisions. If I make, like, three good decisions a day, that’s enough. And they should be as high quality as I can make them.

Jeff Bezos | Source

Try using behavioral-based interview questions to gain insights into potential candidates’ thinking processes, problem-solving capabilities, and work ethic.

4. Look for high emotional intelligence

When evaluating emotional intelligence, consider the following factors:

• Self-awareness: Entails understanding one’s own emotions, recognizing strengths and weaknesses, and comprehending personal motivations and drives.
• Self-management: The ability to think before acting, keeping negative emotions in check, and ensuring that immediate reactions do not control the situation.
• Social awareness: Being aware of the feelings and actions of others, empathizing with their perspectives, and establishing trust in various situations.
• Relationship management: Going beyond social awareness, this involves taking responsibility for oneself and creating a positive work environment.

Political leaders such as Martin Luther King Jr., Abraham Lincoln, and Winston Churchill are common examples of individuals with high emotional intelligence who are sensitive to the emotions of their countries and dedicate their lives to their cause.

During interviews, you can ask candidates questions like “Who inspires you and why?” or present hypothetical scenarios to assess how they would handle negative feedback on their job performance.

5. Test how they collaborate and work in a team

Effective leaders possess the ability to bring people together and foster a sense of collaboration toward a common goal. They are skilled at building trust and rapport with their team members.

Walt Disney was known for his ability to create a sense of community and belonging among his employees. He also very successfully fostered a culture of innovation and creativity within his organization.

To this day, Disney is one of the best examples of a brand that has achieved creative collaboration.

When assessing candidates’ collaboration and team-building skills, consider the following factors:

• Teamwork skills: Can the candidate work effectively with others and contribute to a harmonious team environment?
• Communication skills: Can the candidate communicate their ideas and instructions clearly to ensure effective collaboration?
• Leadership skills: Can the candidate motivate and inspire others to work together toward a common goal?

6. Ask them about their past projects and people management skills

One key aspect of being a good people manager is the ability to motivate team members. This involves understanding their individual needs and finding ways to inspire and drive their performance. Effective communication is also crucial, as leaders must clearly convey goals and expectations, provide feedback, and actively listen to their team’s concerns and ideas.

Accountability, the practice of taking responsibility, is another fundamental quality of a strong people manager. Leaders should lead by example, demonstrating integrity and accountability in their actions.

A notable example of a leader exemplifying exceptional people management skills is Jason Fried, Basecamp co-founder and CEO of 37signal. Through his approach to leadership, he showcases effective communication, responsibility, and the ability to motivate and inspire his team.

7. Dig into their mentorship experience and style

Leaders who adopt the coaching and development style focus on nurturing and guiding their team members to reach their full potential. They provide support, feedback, and resources to help individuals develop their skills and grow professionally.

Leaders who invest in their team’s growth and development create a positive, empowering work environment that fosters continuous improvement. Great leaders start developing leadership skills early in younger members of staff.

Anthony Jay Robbins, or Tony Robbins, has created a successful career by coaching people to become their best. The best way to assess their coaching and development abilities is to test their emotional intelligence and soft skills and have one-on-one interviews.

8. How well do they persuade and influence?

A successful leader possesses the ability to effectively persuade others and influence them toward a desired outcome. They are skilled at building consensus and rallying individuals around a shared vision or goal.

A good example of this is Ray Kroc, who turned McDonald’s into the most successful fast-food franchise in the world. Kroc was impressed by the original owners of McDonald’s, brothers Richard and Maurice McDonald, and how they had vastly improved other restaurants’ efficiency. He convinced the two to allow him to franchise the concept, consequently building it into a multi-billion dollar company.

To assess a candidate’s persuasion and influence capabilities, examine their:

• Communication skills: Can the candidate articulate their ideas clearly and convincingly to diverse audiences?
• Negotiation skills: Can the candidate find common ground, resolve conflicts, and reach mutually beneficial agreements?
• Ability to build relationships: Can the candidate establish rapport and trust with others, facilitating their influence over decision-making processes?

9. Assess their adaptability and flexibility

In today’s dynamic and ever-changing business landscape, leaders must be adaptable and flexible to navigate uncertainty and drive success. They need to embrace new ideas, adjust to shifting circumstances, and proactively seek growth opportunities.

Steve Jobs was renowned for his adaptability as a business leader. He navigated changing market conditions, introduced transformative products and strategies, and made bold decisions that revitalized Apple and established the company as a leader in innovation.

During interviews, ask candidates about situations where they had to adapt to change or navigate unforeseen challenges. Inquire about how they have demonstrated flexibility in their previous roles and how they stay up to date with industry trends.

Leaders who are adaptable and flexible are better equipped to guide their teams through uncertainty and drive innovation within their organizations.

10. What degree of toughness and resilience is required for the role?

Leaders who possess toughness and resilience are composed under pressure, maintain a positive attitude, and motivate their team to overcome obstacles. These leaders are adept at bouncing back from adversity, learning from failures, and using setbacks as opportunities for growth.

Nelson Mandela was the first black president of South Africa. He spent 27 years in prison for his political activism but never gave up hope for a better future for his country. After his release from prison, Mandela led the negotiations that ended apartheid and brought about democracy in South Africa.

By embodying toughness and resilience, leaders inspire confidence and foster a culture of perseverance within their teams. They lead by example, demonstrating that setbacks are temporary and can be overcome through determination, adaptability, and a growth mindset.

Toughness and resilience can be delved into by asking the candidate about their past experiences.

How to develop leadership skills

We’ve all heard the phrase “born leaders,” but the truth is that most people are born with the potential to lead. Those who succeed have had the opportunity to develop their leadership skills and competencies. Human Resource teams can provide opportunities for leadership growth by doing the following.

Skills tests

Give leaders access to skills assessments so they can obtain benchmark metrics in where they excel versus where they need to develop. These are a great way to identify gaps in leadership skills and build personalized development plans.

Leadership development programs

Leadership certification programs and degree programs such as MBAs provide structured, evidence-based learning. The training can be broad or delivered in specialized workshops, such as negotiation techniques or conflict resolution.

Programs are typically instructor-led and take place in classrooms or virtual spaces. Wondering how effective these formal growth methods are? LinkedIn reports that 70% of “mature development companies” offer this type of program, making it the most popular career progression strategy.

On-the-job experience

Succession candidates can gain a wealth of experience by shadowing current leaders in their roles. They might even sample a variety of leadership positions throughout the company, allowing them to pick up skills and experience before moving into a C-suite role.

Mentorship

There are countless examples of successful leaders who have been first been mentored by someone notable. For example, Mark Zuckerberg was mentored by Steve Jobs, Yves Saint Laurent was mentored by Christian Dior, and Barack Obama was mentored by Michelle Robinson (who would become his wife!).

Mentorship looks different in every partnership, but a commonality is the mentor passing on their experiences, guidance, and insights to the mentee.

Peer learning

Leadership roundtables or mastermind sessions provide a setting for sharing information and brainstorming challenges. This is an excellent professional development strategy where leaders learn from others’ diverse perspectives and discover the latest industry trends.

Self-directed learning

Reading books or listening to podcasts about leadership allows learners to focus on the areas where they need the most improvement. It’s also convenient and accessible — leaders might listen to their favorite podcast in the car or read a leadership book during their lunch break without detracting from their regular work.

Screen for key leadership competencies in hiring with skills testing

Your future leader needs the right skill set to match their position, which is where skill tests come in. With Toggl Hire’s test library, you can pick from hundreds of pre-made assessments from experts and add your own questions.

In addition to skills testing, you can ask candidates to provide a video intro. This is a short video where the candidate introduces themselves and discusses their leadership skills and experience. Video intros can be a great way to get to know a candidate and assess their communication skills.

Find and hire highly capable leaders with Toggl Hire!