Generative AI’s ability to analyze resumes makes it possible for employers to prioritize skills at scale.

Key Takeaways

  • A key challenge in skills-first hiring is determining the true skills needed for a role and reviewing job applications for a match — but generative AI has the potential to make that possible at scale. 
  • Generative AI may give recruiters and hiring managers new tools for being proactive in the hiring process and expanding and diversifying their talent pools.  
  • Although generative AI has the potential to help employers make fairer, more efficient and more effective decisions, “human” is still, and will always be, at the heart of hiring.

“What’s exciting about skills-first hiring is that it has the potential to solve core employer challenges and open up new opportunities for job seekers who are too often screened out despite having the skills to do the job,” says Liz Voigt, Senior Manager of Social Impact at Indeed. “When you look at the challenges that employers are facing — not finding quality talent, hiring taking too long, troubles with retention, difficulty diversifying their workforce — skills-first hiring can help them address those challenges today and in the future.” 

Skills-first hiring focuses on sourcing and evaluating candidates based on skills rather than proxy requirements like degrees, prior positions and years of industry experience. The term “skills-first” also acknowledges that in some industries a formal education and certifications are required. There’s good reason to adopt a skills-first strategy: Hiring managers who practice skills-first hiring find it twice as easy to find qualified candidates than hiring managers who do not.

Learn how to stop screening out qualified candidates and screen in more skilled talent by shifting to a skills-first hiring approach.

While many employers are open to the philosophical shift to skills-first hiring, it can be challenging to execute at scale, largely because it’s difficult to identify the skills required for the job, glean applicants’ skill sets from their resumes and assess those skills. But the advancement of generative AI has the potential to change that. “AI gives us the opportunity to analyze both job descriptions and resumes to find out what key skills are needed to succeed,” says Hannah Calhoon, Vice President of Product at Indeed. 

Use AI to Uncover Skills-Based Matches 

Generative AI is able to digest, organize and formulate conclusions from large amounts of unstructured data. In the past, applicants would have to include the exact language used in a job description to be recognized as a potential match. Now, if a job seeker describes their skills well in a qualitative way, generative AI has the potential to  understand what capabilities are being described and translate them into whatever taxonomy the employer is looking for. For example, an applicant might note their background working the register at a café while an employer is looking for “retail point-of-sale” experience.

Now, if a job seeker describes their skills well in a qualitative way, generative AI has the potential to understand what capabilities are being described and translate them into whatever taxonomy the employer is looking for.

“That’s promising for job seekers without as much practice describing their work experience and skills in very particular corporate language,” Calhoon says.

Expand Your Definition of a Quality Candidate

The use of AI to enable skills-first hiring is a potential sea change for employers and job seekers alike, especially in tight labor markets. Byron Auguste, founder and CEO of Opportunity@Work, an organization that helps people without bachelor’s degrees get hired into better paying jobs based on their skills, says that between 2012 and 2019, 69% of new jobs created were in occupations that require a bachelor’s degree or higher — but only 35% of Americans meet that requirement. “That’s a huge math problem,” he says. 

Seventy million people in the U.S. — half the nation’s workforce — are what Auguste calls STARs, or “skilled through alternative routes” rather than a four-year degree, such as through military service, workforce training programs or on-the-job experience. STARs can be screened out of talent searches because they lack what employers commonly use as proxies for skills, like bachelor’s or advanced degrees, even if they have the capabilities needed to do the job. 

“What a waste it is to overlook millions of people who can do the jobs you need filled, earn more money, be committed employees, build their communities and drive success and competitiveness,” Auguste says. “If you don’t have a STARs-based talent strategy, you don’t have a talent strategy — you have half a talent strategy.”

Skills-first hiring is also a compelling tool for pursuing diversity, equity, inclusion and belonging (DEIB+) in your organization. As Auguste points out, people of color, rural workers and veterans are disproportionately STARs. Skills-first hiring can help employers “screen in” these job seekers and others who are underrepresented in the workforce but just as able to succeed if given the chance. Generative AI can help employers recognize the capabilities STARs bring to the table.

Take a Proactive Approach to Responsible AI and Mitigating Bias

AI has the potential to make the entire labor market more equitable and effective — but bias remains a risk. “Intention matters, and AI is amplified intention,” Auguste says. “If you’re trying to find the best fit based on skills, regardless of how those skills were acquired, AI will help you do that better.” 

To use AI effectively for skills-first hiring, talent professionals need to understand how models have been developed and trained, and audit and monitor those models for bias. “As folks are thinking about integrating AI tools into their hiring processes, it’s important that the technology isn’t perpetuating those same things that make it hard for job seekers in the first place,” Calhoon advises.

Use a Skills-First Approach to Reimagine Hiring and Upskilling

Models become more capable of identifying skills as they are fed more data and given more feedback about what constitutes a quality match. That in turn gives employers the opportunity to take a proactive approach to hiring. 

Rather than posting a job and waiting for applicants to respond, employers can search the millions of profiles on Indeed for a specific set of job criteria based on information collected from the job seeker. Indeed’s Smart Sourcing generative AI provides an explanation of the candidate’s potential overlapping qualifications with the employer’s job description. This helps hiring managers sift through candidate resumes more efficiently. 

A skills-first strategy doesn’t stop with hiring. It’s also important for upskilling, which is increasingly critical in a rapidly changing labor market. According to the World Economic Forum’s Future of Jobs Report, 50% of workers will need to learn new skills by 2025. Organizations with a skills-first hiring strategy will have a better view of employees’ capabilities and how they can be adapted, augmented and transferred. And they’ll have a mindset and culture that supports employees’ potential to learn and grow as the economy and the labor market change over time. 

“Skills-first hiring that’s fully implemented — from dropping degree requirements all the way through skills-based evaluation and upskilling on the job — can translate into significant cost savings,” Voigt says. “It makes sense, it’s better for business, and when it’s done right with efforts to remove other biases from the hiring process, it can be more equitable.”  

Keep Hiring Human

Nobody wants to be hired by a computer. They want to be hired by a human who is part of a company with a culture, purpose and mission. As crucial as AI will be to skills-first hiring, talent acquisition and management always start and end with humans. 

“What AI allows us to do is to help recruiters and talent professionals take a broader view of what a high-quality candidate looks like,” Calhoon says, “and to do that in a really data-driven way, so that it doesn’t feel like a risk to consider candidates they might not have considered before.”