Skills-Based Hiring And What It Means For Recruitment Marketing

LaKeisha FlemingBy LaKeisha Fleming
January 5th, 2024 • 5 Minutes

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Maria Villegas worked in the medical profession for years before deciding to pursue a career as an SEO specialist. Moving to such a vastly different industry proved to be a challenge. While Maria had skills that prepared her to delve into SEO work, her resume and experience told a different story. 

She had the insight needed to do the job but didn’t have a concrete way to show it—until skills-based hiring entered the picture. 

She was able to showcase her skills with a job-related assessment, despite not having job-related experience. “I didn’t have to prove myself in these complicated ways, I could just take the test. Now I have a job that I enjoy, and it allows me to travel. My quality of life has improved a lot,” she notes on TestGorilla’s blog. She was judged according to her abilities, not her CV.

“Skills-based hiring is an approach to hiring that looks at a candidate’s specific skills and abilities instead of traditional credentials like degrees, certifications, work history, etc, Skills are sometimes assessed with technical assessments, tests, demonstrations or relevant experience,” explains Kyle Samuels, CEO and Founder of Creative Talent Endeavors

The Rise of Skills-Based Hiring

The skills-based approach to hiring has been around for a while. But the practice has started to gain steam in recent years. And with good reason—employers who use a pre screening assessment to gauge information, including employees’ skills, experience a 39% lower rate of turnover among their staff.

Hiring based on skills also gives businesses the chance to broaden their horizons when reviewing candidates. It’s not just about whose resume looks the most impressive. Rather, it becomes about who can do the job right.

“Many companies are turning to skills-based hiring in an attempt to reduce unconscious bias in their recruitment and hiring processes. Skills-based hiring helps level the playing field for candidates from diverse backgrounds, who enjoy fewer advantages, by focusing on their skills rather than the name of their most recent employer or the university they attended,” notes Kyle Elliott, EdD, Founder and Career Coach at CaffeinatedKyle.com

Skills-based hiring is bringing changes to the recruitment process. We look at why skills-based hiring matters, how it impacts recruiting and what it means for your hiring practices in 2024. 

Why Skills-Based Hiring Matters

Adopting a skills-first approach when recruiting talent doesn’t necessarily mean that credentials and experience don’t matter. Rather, it says that skills also play a pivotal role in the process.

According to a LinkedIn report, employers’ talent pools grow nearly 10 times larger when they adopt a skills-first perspective. That’s a huge increase in talent, ability, insight and potential that could come from prospective employees. It’s also an increase in life experiences and viewpoints that can enrich your company’s outlook.

“Skills-based hiring can help ensure an employer gets the best candidate for a position without filtering out candidates that would typically be looked over. For example, a candidate with a degree from a community college would often be passed over just because they don’t have a four-year degree, but with skills-based hiring they get a fair shot. This helps diversify a workforce, improve productivity and encourage equity,” Samuels notes.

The approach can also help avoid wasted time. If employees have the needed skills for the job and can hit the ground running with very little training, that’s a benefit for both you and them. TestGorilla found that almost 92% of employers believe resumes don’t do the trick; they say skills-based hiring does a better job of finding the best candidates for the job. 

In another blog, TestGorilla gives insight into companies who enhanced their workforce and environment by focusing their hiring efforts on skills rather than resumes alone.

IBM

This tech company is invested in skills-based hiring. In addition to having potential workers complete assessments, IBM has developed what it calls “new collar” jobs. For these positions, having the skills to do the job matters more than your college degree.

The company also continually reviews job listings to ensure that they focus on skills.

Revolut

This financial technology company hired workers 40% faster when it put a skills-based approach into play. The company began relying heavily on technology, using programs to automate their vetting process and give language mastery tests. Streamlining the screening and hiring process brought increase to the company by saving time, talent and financial resources.

Other companies are implementing a skills-based strategy for finding top-tier talent. And as the new year approaches, the practice will continue to grow. 

The State of Skills-Based Hiring in 2024

Employers see a lot of benefits in having a diverse workforce. Skills-based hiring is a vehicle to make that happen. 

“Skills-based hiring is likely to increase in 2024 and beyond as HR and business leaders strive to make their recruitment processes more equitable. As companies promise to deliver more diverse workforces that better represent their users, skills-based hiring is an avenue for attracting, recruiting and selecting talent that may have been previously overlooked,” says Dr. Elliott.

This can include people who attended a community college, went into the military, or even chose to work while getting a degree at night. Their resume doesn’t tell the full story of their talent, and employers will take note of this even more in 2024.

AI also plays a part in the increase of skills-based hiring. Businesses can use AI to find talent whose skills match what they are looking for and use AI to filter out applicants without matching skills. 

“AI is likely to play a major role in companies embracing skills-based hiring, since it offers a scalable solution that can reduce the labor and cost associated with recruiting and hiring talent,” explains Dr. Elliott. He notes, however, that AI still requires a human element. “It’s important to keep in mind, though, that a human is training the AI, and it is not making decisions on its own,” he adds. 

What Does Skills-Based Hiring Mean for Recruitment?

Companies know exactly what they are looking for when posting a job listing. They want a specific position filled, and specific duties completed. Implementing a skills-based strategy can help make sure you find someone who can do the job.

It’s important, however, to be mindful that skills-based hiring isn’t a perfect science. It doesn’t necessarily identify a person who may not have all the skills but is very teachable and trainable. It also may discount a person who has other skills that can be just as beneficial for your business. And of course, you have to consider if a job applicant will willingly take multiple assessments without a guaranteed job.

Ultimately, adopting a holistic hiring approach that relies on applicants’ skills can make things simpler for you and them in the long run.

“When done well and with intention, skills-based hiring can speed up recruitment by making it easier to evaluate candidates with diverse experiences and backgrounds. Importantly, though, skills-based hiring is only one aspect of an effective, productive recruitment process that aligns with business goals,” states Dr. Elliott. “Companies are not hiring robots, they’re hiring people, and while skills are important to complete a job, they’re not the only factor needed for an employee to be successful and thrive,” he concludes.

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