Skills-based hiring is a bit of a buzzword today, but the principles behind it are anything but new. The practice of skills-based hiring embraces the idea of hiring people based on their job-related skills and competencies. While this approach may sound simple (and obvious), it differs significantly from the traditional hiring approach, which tends to prioritize a person’s past experience and educational pedigree.
Skills-based hiring has recently grown in popularity because it addresses some of the most pressing issues facing the talent market today. Employers across a wide range of industries are facing talent shortages which make it harder to find candidates with direct past experience. Meanwhile, more organizations are reconsidering the requirement of a college degree as the cost of a college education continues to rise.
Skills-based hiring addresses many of these issues by widening and sharpening the lens through which talent is evaluated.
What is Skills-Based Hiring?
Skills-based hiring is an approach that evaluates job candidates based on their job-related skills, abilities, and competencies, not based on their education or past experience. By focusing on a candidate’s transferable skills and overall potential, skills-based hiring can widen the candidate pool while still delivering positive hiring outcomes.
So what even are “skills”? In this context, a “skill” is simply any competency related to job success. This can include both hard and soft skills, as well as learned and “innate” abilities, aptitudes, and competencies.
Skills-based hiring seeks to evaluate candidates directly based on the skills that will help them succeed on the job; not based on weak proxies for those skills, such as years of experience or a former job title.
The Benefits of Skills-Based Hiring
Skills-based hiring is gaining in popularity because there are so many benefits to this approach. Here are just a few of the biggest benefits.
1. It widens the candidate pool
When a job description requires a certain degree or minimum years of experience, it automatically screens out candidates who don’t meet those requirements. Yet a skills-based approach argues that these factors aren’t the best filters, because they don’t truly reach the core of whether or not someone has the potential to succeed on the job.
Instead of requiring a degree or past experience, a skills-based approach requires the candidate to possess a certain set of skills and competencies in order to apply. This widens the number of candidates who will choose to apply. From there, you can use validated assessments and structured interviews to evaluate if candidates have the required skills for the role.
Of course, this doesn’t apply to all roles. Many roles require advanced degrees, certifications, and necessary experience requirements. But if the requirements aren’t truly “required,” they only stand in the way of inviting in more applicants.
2. It yields a more diverse candidate pool
A person’s degree or years of experience are contingent on that person having had access to those opportunities in the past. In many cases, the most privileged in society will have access to a high-quality college education and top-tier employment opportunities, while others are not afforded those opportunities.
Skills-based hiring deprioritizes prior access, which effectually increases the diversity of your candidate pools. By letting go of unnecessarily restrictive requirements, you’ll find that candidates from more diverse backgrounds will start to apply.
3. It’s more predictive and objective.
Skills-based hiring aligns with the latest research in organizational psychology, which tells us that experience and education really don’t predict much. Instead, this approach focuses on the skills that are relevant to the job. This can include a combination of both hard and soft skills – from technical computer skills to critical thinking and emotional intelligence. These can be evaluated through assessments and work samples.
Next, you can use structured interviews to confirm that the candidates possess these skills. Structured interviews are two times more predictive than unstructured interviews, leading to more objective decision-making.
A skills-based approach involves identifying the skills that the role requires, measuring them, and confirming that the candidate possesses those skills.
4. It’s less biased.
Because skills-based hiring is rooted in objective science, it’s more objective, less biased, and it opens up your talent pool to include a more diverse set of candidates who may have been overlooked based on their resume alone. This is also good for candidates – when candidates know they are being evaluated fairly and objectively, their own experience of your hiring process improves.
5. It leads to better hiring decisions.
Because skills-based hiring is more predictive of job success, it leads to better hiring outcomes. This includes better job performance, lower turnover, faster training and ramp-up speed, and more efficient hiring overall.
Why Now?
Skills-based hiring is increasing in popularity because it solves very real hiring challenges today. Many industries today are facing a talent gap, struggling to find enough candidates that already know how to do certain roles. And as technologies advance and jobs change, recruiters and people leaders will increasingly find it difficult to find job candidates who have past experience in certain areas. After all, you can’t require 5+ years of ChatGPT experience when it was just released in 2022.
Skills-based hiring focuses on a candidate’s potential – not just today, but in the future. By measuring what your candidates can do today, as well as their potential for the future, you can begin to build a team that can adapt and grow with your organization, no matter what the future holds.
