What is skills-based hiring?
Skills-based hiring focuses primarily on skill requirements rather than formal education or experience. Traditionally, a significant focus when evaluating candidates has been on education and work experience. For example, someone who didn’t meet the minimum education requirement for a posting, such as a bachelor’s degree, would automatically be removed from the candidate consideration process.
However, with skill-based hiring, employers recognize that as long as a person has the skills to do the job, their education and previous work experience may not matter. For example, people who taught themselves how to code may not have formal education in coding or a previous job in the field, but they may have the right skill set to fit the role’s requirements.
This approach looks at including the right candidates based on specific criteria versus excluding candidates based on certain unnecessary prerequisites.
It’s important to note that a skill-based hiring approach isn’t one where the employer simply takes the candidate’s word for their acquired skills. Instead, candidates are usually asked to demonstrate their expertise by completing an assignment or test. This helps the employer verify that their skill level matches what’s required for the position.
Skill-based hiring rise in popularity
Skill-first hiring has been growing in popularity among employers for the last few years. In the early 2000s, a trend known as “degree inflation” started occurring. More and more employers began adding degree requirements to roles that previously didn’t ask for formal education as a prerequisite.
Once degree inflation was identified as a harmful trend, many businesses promised to re-evaluate their hiring requirements. Now, these companies have started to deliver on that promise.
Employers have many reasons to test out skills-based hiring, as there are several benefits to this hiring approach.
The benefits of skills-based hiring
A skills-based hiring approach can bring the following benefits:
Expands the candidate pool
Many employers have found it challenging to hire for open positions over the last few years. With the introduction of remote work, candidates now have more options when seeking employment. People may not have to accept jobs within driving distance, so hiring is much more competitive.
A skills-based approach to hiring can widen your candidate pool. By being the type of employer that doesn’t require specific work experience or educational background, you allow more people to apply for your positions.
Reduction in time to hire
Minimizing the time-to-hire process is vital for an organization. Taking a long time to hire means more resources are put towards recruitment and positions are left vacant, which can disrupt business operations.
A skills-first hiring strategy typically shortens the time-to-hire process. Recruiters can send a quick skills assessment to anyone who applies to the role. This skills assessment is a quick and easy way to separate the candidates who deserve to move on to the next stages of the interview process from those who don’t. As a result, fewer resources are wasted on interviewing unsuitable candidates, and the right candidate can potentially be identified more quickly.
Improved company morale and productivity
A team functions best when everyone in the department can do their job well. As the saying goes, you’re only as strong as your weakest link. Because skills-based hiring enables companies to hire individuals with the expertise to perform well, the entire team benefits. A team of people who know they can rely on their colleagues is likely to experience improved work morale, job satisfaction and productivity.
Increased employee retention
Skill-based hiring offers you a stronger chance of finding the right candidate for the right role. When employees feel they’re a good fit, they may be more likely to stay in their position longer, increasing overall employee retention. A healthy retention figure helps an organization save costs, maintain high morale and keep operations running smoothly.
The drawbacks of skill-based hiring
So, you might be wondering if skill-based hiring has any downsides. Overall, employers seem overwhelmingly happy with this hiring strategy and have seen it help them find candidates that are a better fit. But there is no such thing as a perfect hiring strategy, so let’s take a look at some of the cons of skill-based hiring that employers should know about.
Might not be suitable for all positions
Skill-based hiring works for most positions where you can test the employee on the required skills. For example, a copywriter might be asked to submit a writing assignment, or a mortgage broker could be asked to respond to a sample mortgage application.
However, with some jobs, a skills assessment is simply not practical. Let’s say you’re hiring painters. It would not be efficient to ask painters to come in and show their painting skills.
In jobs where a skills assessment isn’t possible, the hiring strategy often defaults back to work experience, education and references.
Takes time to implement
Once your skills assessment is up and running, it’ll help you quickly sort through applicants. But a skills assessment may take some time to set up, including the time needed to create your test. When hiring on a large scale, you may have to create a unique assessment for every new role, which could entail a significant time commitment.
Is skill-based hiring right for your organization?
A skill-based hiring strategy can be an excellent choice for many organizations. To determine if it’s right for your business, ask yourself three questions:
- Can I easily assess the required skills for most of the roles I hire?
- Can skills and experience substitute for formal education? (This may not be the case for roles like lawyers and doctors)
- Am I willing to put in the time and resources to find ways to assess candidate skills?
If you answered yes to the above questions, then it’s very likely that implementing skills-based hiring will have a positive impact on your organization. There is enormous hiring potential when you open the candidate pool beyond education and work experience requirements.
Allow candidates’ performance to speak for themselves instead. If someone applies and passes your skills assessment, you can feel comfortable knowing they have what it takes to do well in the role.
