Skills-Based Hiring is Exploding in Popularity and It Has a Bigger Impact Than You Might Think

In the last decade, having a 4-year college degree became a standard pre-requisite in many professional settings. If candidates didn’t reach the minimum educational requirements, they were almost automatically rejected. However, according to the US Census Bureau, the percentage of adults 25 and older that hold a bachelor’s degree or higher was only 37.9% in 2021. That excludes more than 62% of career-aged candidates from opportunities with strict educational requirements.

To combat this statistic, as well as change hiring practices more broadly, employers of all sizes in a number of industries are turning to skills-based hiring. Skills-based hiring is a hiring approach that defines all the soft and hard skills required to be successful in a job and prioritizes those skills above education or work experience when looking for candidates to fill the role. The skills could be soft skills, such as communication and leadership skills, or hard skills like being advanced in a specific programming language.

When organizations are deciding whether to ditch current hiring practices for a skills-based approach, it’s important to understand the benefits that are waiting on the other side. However, even more importantly, it’s critical to consider how to successfully hire using skills-based hiring practices instead of legacy approaches.

Benefits of Skills-Based Hiring

It might not seem like adjusting hiring practices would really have that big of an impact on an organization or its employees, but it can change everything from company culture to how much is spent on the hiring process. Even if your organization is focused on one of the below benefits, all of them will come with time.

             More Diverse Teams

Black and Hispanic adults between 25 and 29 years of age that have a bachelor’s degree or higher in 2021 reached 26% and 23% respectively. That is a stark contrast to the 45% of their White counterparts, causing a significant gap in hiring equality. If most professional jobs require a bachelor’s degree, but the exclusionary cost of higher education in the US makes college disproportionately harder to reach for People of Color, then diversity and equity in the workplace are going to be just as difficult to bring to fruition. One study in the UK saw a 70% increase in women in management roles when skills-based approaches were used. Taking away the degree requirements for jobs where they really aren’t necessary leads to more diverse teams, different perspectives, and better business outcomes.

             Boosted Hiring Efficiency

Anyone in HR knows that there is never enough time in the day for teams that focus on hiring and retention. With thousands of resumes to sift through and endless interviews to conduct, time is the most prohibitive factor when it comes to hiring. But what if we’re doing it all wrong? By emphasizing skills needed to succeed, faster solutions such as tests or case studies can be implemented early on, weeding out candidates that don’t have the required skills to do the job well. Once hired, these candidates will require less training and time to get up to speed, too!

             Happier Employees

72.1% of people hired through skills-based hiring are happy in their roles. As difficult as it can be to get the right person into a specific role, it can be even harder to get them to stay. If the wrong aspects of a job are the focal point when hiring, someone may not be set up for success, making their experience one filled with frustration. Circumventing that all-to-regular dynamic, skills-based hiring helps set clear expectations around what a job will entail, creating a foundation of transparency before a new hire even starts.

             Addressing Labor Shortages or Gaps

Volatility in the labor market can hit at any time. Through the pandemic and the following labor shortage, we’ve seen how fast the market dynamic can change, sending hiring professionals and candidates for a loop. With skills-based hiring, jobs can get filled faster, people can spend less time unemployed, and market volatility can be seamlessly addressed. This benefits candidates, employers, and broader communities in immeasurable ways.

How to Hire with a Skills-Based Approach

If skills-based hiring sounds like something your organization needs to prioritize (hint: it’s something EVERY organization needs to prioritize), then you shouldn’t waste any time getting started. Overhauling how an entire organization hires new employees is no easy task, but there are a few things that can be done right now to help move the needle:

1.Update Job Descriptions

Have a long, hard think about whether any job you have posted actually requires a 4-year degree. Sure, if you’re hiring a doctor, you probably can’t relax any of your educational requirements. But for office jobs, technology jobs, or any instance in which all the training happens internally anyway, consider removing that requirement. Even the state of Maryland has started posting government roles without a 4-year degree requirement.

2.Diversify Sourcing Tactics

Going to universities and higher education institutions is where many employers focus their recruiting efforts, but by expanding those efforts to professional networks in the area, community colleges, and related conferences, you might reach incredible candidates that wouldn’t have crossed your path otherwise. You can also post jobs in different places, target new audiences with billboards, or hold training classes in the community to identify untapped talent.

3.Create Skills Assessments

Skills-based hiring tactics will require some way to assess a candidate’s skills. Programming tests are popular for technical roles, but presentations and case study reports are great ways to test skills in other types of roles. Get creative and have fun with it, and remember, focus on the skills that will help the candidate be successful once they are hired.

Skills-Based Hiring from Here on Out

It takes a bit of brain rewiring for HR professionals and leaders to admit that 4-year college degrees aren’t always necessary, and in fact, in many cases, they never were. We’ve built a culture around formal education, but we may have been focusing on the wrong thing this entire time. It’s not too late to pivot; skills-based hiring can open up doors for candidates, but it can also open up doors for your organization. Work with leaders and hiring managers in your organization to change the company practices surrounding hiring and start implementing small changes today.