Skills-based hiring: An innovative approach to talent recruitment and development

Finding the right person for the right role is crucial for companies’ long-term success. Only 5% of the job skills needed today will be relevant in 3 years, creating a need to look beyond traditional hiring practices. For many companies, a skills-based method that emphasizes practical abilities rather than academic credentials might be the answer. 

By providing access to a broader talent pool and closing skill gaps that threaten productivity, this strategy can ease hiring and turnover challenges.

“A skills-based organization prioritizes the specific skills and competencies of its workforce over traditional job titles or educational qualifications. In such organizations, the focus is on identifying, developing and leveraging the particular abilities each employee brings to the table.”

– Put Skills into Strategy: A Roadmap for Building a Skills-Based Organization That Drives Growth

Skill-based hiring vs degree-based hiring: a boost in talent diversity

Companies with a traditional, degree-centric approach to recruitment risk missing out on one of the biggest benefits of skills-based hiring: greater diversity. By including people from historically underrepresented groups, and candidates who gained their skills outside of a classroom, it greatly expands talent pools.

While this is beneficial for workers, it’s also beneficial for organizations looking to hire talented, high potential individuals who can make an impact. Recruiting from a diverse group also increases the odds of finding the best and brightest candidates. In a competitive economy where the war for talent is intensifying, this is where HR leaders can make the difference. 

‍Because of labor shortages, there is a necessity to move beyond degrees. It’s crucial to ask, ‘In which parts of my organization do degrees actually matter and in which can we focus more on skills and widen our group of talent that we want to attract?’

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– Marlene de Koning, Director of HR Tech & Data at PwC

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Skills-based hiring is on the rise, but credentials still have value 

Given the benefits, skills-based hiring is growing in popularity. According to HR Magazine, 72% of hiring professionals use skills assessments to evaluate candidates, while Forbes says 92% of companies believe this style is more effective than simply focusing on CVs.

But even though skills-based recruiting is playing a bigger role in the hiring process, CVs and traditional credentials won’t become irrelevant overnight. Formal education still has value, but the way in which it’s perceived will evolve. For job seekers, that means highlighting the breadth and depth of skills obtained while studying for a degree instead of simply listing it on their CV.

Skills-based hiring isn't the death of the resume. It's its evolution. In the past, the resume was a pedigree, a lineage chart that showcased where you've been – elite schools, blue-chip internships, the works. The skills-based approach doesn't care if you honed your skills in a classroom at Harvard or a basement in Hackensack; it cares about proficiency, adaptability, and execution.

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– Brian Fink, Talent Acquisition Partner at McAfee

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How to adopt skills-based hiring practices

Making the leap into a skills-based hiring style can be challenging. Many organizations are used to prioritizing degrees and certifications, and might find this change disruptive.

Begin the process by asking 3 questions that can help determine if your organization should consider making a change:

• Do you have difficulty filling roles with traditional hiring criteria?
  Consider whether your organization struggles to fill positions because candidates don’t meet certain educational or career pathway requirements. A skills-based model can broaden your talent pool by emphasizing the specific skills needed for the job over formal qualifications and previous job titles.

• Are you experiencing rapid technological or market changes?
  Industries undergoing rapid change due to tech advancements and shifting market demands usually need people who adapt and learn quickly. If your organization updates tech platforms, tools or operations regularly, the skills-based approach can help ensure your workforce is prepared.

• Are you struggling with high turnover or low engagement?
  High turnover rates and low engagement can indicate that employees feel like their skills and career aspirations aren’t being recognized. Since a skills-based model aligns roles with people’s abilities and interests, it can boost job satisfaction, engagement and retention.

If these concerns resonate, skills-based hiring might be the best path forward. To get started on the journey, consider taking these steps to ease the process along:

• Examine current data on skills-based hiring
  When you have data to support your case, including the rising popularity of this method, getting the buy-in needed to adopt skills-based hiring practices will be easier.
• Determine your company’s challenges
  Conduct research to find out exactly where your organization is hurting and why. When you know what the problem is, determining how a skills-centric mindset can be part of the solution becomes easier.
• Discover the benefits of prioritizing skills in recruitment
  Set aside time to learn what makes this method work. Take a deep dive into skills-based hiring research and share it with your team to get everyone up to speed and excited about the impact potential.

Make lasting organizational change with skills-based hiring

Establishing a skills-based hiring model requires commitment and follow-up. New practices and standards must be actively used at every level of your organization to lead to positive change.

While at the same time, current teams also need opportunities to upskill. Training programs that align with emerging market needs should always be available to employees to keep them future-ready. When people can develop, they’ll be prepared to keep up with changes while benefiting from a skills-based culture centered on growth and adaptability.