Two employees, identical skills on paper—yet one becomes a team catalyst, while the other creates tension and stalls progress. What sets them apart? Analytics and experience say it’s the soft skills.
In fact, 80% of talent professionals say soft skills are more critical than ever for business success. Yet many performance reviews remain fixated on technical output, overlooking the human abilities that truly drive results.
In this article, Sereda.ai explores why that needs to change and how to build performance reviews that value the whole employee.
What Exactly Are Soft Skills? Key Traits That Drive Today’s Teams
Soft skills are often misunderstood as vague “people skills,” but they’re deeply practical competencies that determine whether teams function smoothly or grind to a halt under stress.
Consider these examples that carry real weight in business outcomes:
- Communication: Not just public speaking, but clarity in sharing ideas, tailoring messages to different audiences, and listening to nuance. A leader who explains a strategic pivot clearly avoids confusion and anxiety rippling through teams.
- Problem-Solving: Beyond technical fixes, this is about creative thinking, reframing obstacles, and looking for solutions rather than assigning blame.
- Adaptability: When priorities change overnight, adaptable employees shift gears without drama, keeping projects moving rather than stalling in frustration.
- Empathy: Understanding colleagues’ perspectives defuses conflict, builds loyalty, and shapes how people engage with customers or partners.
- Collaboration: The ability to negotiate, compromise, and build consensus across departments determines whether complex projects succeed or fall apart.
Far from soft, these skills are hardwired into the organization’s capacity to thrive amid rapid change. A LinkedIs Global Talent Trends Report of 5,164 talent professionals found that 92% view soft skills as equally or more important than hard skills.
Soft Skills vs. Hard Skills: Why Both Matter — But Soft Skills Tip the Scale
It’s tempting to treat this as either/or, however, in reality, both matter. The difference is that soft skills amplify hard skills or blunt their impact. Picture two software engineers:
- Engineer A writes pristine code but communicates poorly, struggles with feedback, and alienates teammates.
- Engineer B writes equally solid code but explains technical choices clearly, collaborates across functions, and mentors junior colleagues.
Who drives more value in the long run? Engineer B doesn’t just deliver their own work—they multiply the effectiveness of the entire team. This pattern repeats everywhere:
- A sales manager who hits targets but creates a toxic culture will eventually cost more in turnover than they generate in revenue.
- A skilled analyst who hoards knowledge becomes a bottleneck, stalling innovation.
Organizations that prioritize soft skills alongside technical expertise build resilience. They’re able to pivot faster, keep morale high, and attract top talent who care not just about paychecks but about the culture they work in.
Read: Performance Review Feedback: Adapting for a Multigenerational Workforce
Important Facts About Soft Skills You Need to Know About
While technical skills keep the wheels turning, it’s soft skills that often determine how far—and how fast—an organization can truly go. Here are five crucial facts that highlight just how impactful these human capabilities really are.
Talent leaders rank soft skills as essential
The talent shortage isn’t purely technical. A survey by the Wall Street Journal revealed that 89% of executives say they have a very or somewhat difficult time finding employees with soft skills like communication and teamwork. As automation grows, the human edge becomes even more critical—and scarcer.
Gaps in soft skills are costly
Here’s a sobering reality: when a new hire doesn’t work out, 89% of hiring managers say the problem usually traces back to a lack of soft skills, not technical know-how. And with the cost of replacing an employee reaching up to twice their annual salary, overlooking soft skills can be a very expensive mistake.
Soft skills reduce workplace conflict
Poor communication and low emotional intelligence often breed misunderstandings that escalate into costly conflicts. In fact, CPP Inc. found that workplace conflict costs U.S. businesses $359 billion annually in lost productivity. Investing in soft skills training can drastically cut these hidden costs.
Soft skills strengthen culture and retention
Culture isn’t just a buzzword—it’s a retention strategy. Study done by Salesforce Research shows employees who feel their opinions count are 4.6 times more likely to feel empowered to do their best work. Soft skills like empathy, adaptability, and trust keep employees engaged and loyal, reducing turnover and building stronger organizations.
Simply put, soft skills aren’t optional anymore. They’re measurable, teachable, and essential for sustainable business success.
Read: Employee Morale: The Complete Guide from Insight to Action
The Hidden Cost of Ignoring Soft Skills in Reviews
When soft skills don’t show up in performance reviews, the consequences often stay invisible until they suddenly explode into visible problems.
- Cultural Erosion: One high-performing individual with poor interpersonal skills can poison morale, leading others to disengage quietly or leave altogether.
- Rising Turnover Costs: Gallup estimates replacing an employee costs up to twice their annual salary. Often, people leave not because of the work itself, but because of toxic dynamics or lack of support.
- Operational Inefficiency: Siloed communication causes redundant work, missed deadlines, and costly errors.
- Innovation Roadblocks: When employees feel unsafe voicing new ideas, the organization loses fresh perspectives, and competitors gain an edge.
The irony is that traditional reviews often reward exactly the people causing these hidden costs because their technical outputs look impressive on paper. Without assessing soft skills, leaders risk perpetuating the very problems undermining their goals.
Read: Here’s How to Promote Employee Well-Being
5 Practical Ways to Assess Soft Skills in Performance Reviews
Recognizing soft skills is a start, but building them into performance processes requires deliberate action. Here’s how to make soft skills visible and measurable:
1. Integrate behavioral indicators
Don’t rely on vague adjectives like “good communicator.” Instead, define concrete, observable behaviors linked to each soft skill. For example:
- “Proactively shares project updates in cross-functional meetings.”
- “Seeks input from team members with different expertise.”
Documenting these behaviors makes evaluations clearer and reduces bias.
2. Use 360-degree feedback
Soft skills often show up differently depending on context. A manager might seem collaborative to executives but dismissive with junior staff. A 360-degree approach captures perspectives from:
- Peers;
- Direct reports;
- Cross-functional colleagues;
- Customers (where relevant).
This holistic view exposes blind spots and highlights strengths that one leader alone might miss.
3. Leverage self-assessment and reflection
Invite employees to reflect on their own soft skills with structured questions:
- “Describe a time you navigated a difficult conversation successfully.”
- “How have you adapted your approach when a project changed unexpectedly?”
Reflection surfaces insights that might never emerge in traditional manager-only reviews.
4. Tie soft skills to business outcomes
Connect soft skills to specific results. For instance:
- A marketing lead whose collaborative style shortened a product launch timeline.
- A customer service manager whose empathy improved client retention rates.
When employees see how soft skills directly impact success, they’re more motivated to develop them.
5. Embed ongoing coaching
Performance reviews shouldn’t be annual verdicts. Build soft-skill development into regular 1:1 conversations, using frameworks like:
- The SBI model (Situation-Behavior-Impact);
- Coaching questions (“What might you try differently next time?”).
This normalizes growth and takes the fear out of feedback. A tool like Sereda Review can help put these practices into action, offering structured templates, 360-feedback workflows, and coaching insights to make soft-skill assessment practical and consistent.
Conclusion
Organizations don’t win solely on technical ability anymore. They win on adaptability, innovation, and how well people work together to solve complex problems. That’s why performance reviews need a new standard: one that evaluates the whole employee.
The future of performance management belongs to those willing to look beyond the obvious metrics and measure what truly matters: the human skills that turn strategy into reality.
Curious how to bring this new standard to life? Explore a demo of Sereda Review and see how it can help you build reviews that truly value your people.