There has been a significant shift among hiring managers towards skills-based hiring to secure top talent and stay ahead of new tech innovations. Skills-based hiring emphasizes the specific abilities of candidates rather than exclusively relying on certain educational requirements or previous titles. It is a much more tangible thought process to hiring (think of it as “don’t emphasize how long you have been doing something; show me what you can do” when it comes to knowledge and application for a specific role.)
Of course, a blended approach can help, especially when experience correlates with business acumen and proven results. However, in today’s landscape of new skills outpacing traditional training, tech companies can employ a skills-based hiring model to react quickly to innovation, expand their talent pool, and improve retention.
Why Use Skills-Based Hiring?
Skills-based hiring is not just a trend – it is a strategic approach that can keep your organization ahead of the game. NACE research reported that nearly two-thirds (64.8%) of surveyed employers use skills-based hiring when taking on new entry-level candidates. This demonstrates that employers are turning to skills-based hiring for a few reasons:
- Broadened talent pool – by prioritizing skills, the talent pool widens to individuals with non-traditional backgrounds, specifically those who are self-taught or those who have gained experience through unconventional career paths. This also leads to a more inclusive and diverse team of employees.
- Improved retention & employee satisfaction – by effectively hiring candidates with the right skills, organizations are more likely to experience higher employee engagement and retention, essentially improving overall workplace culture and long-term performance.
- Increased innovation – skills-based hiring drives innovation because the accurate alignment of employee skills and business needs can address relevant skill gaps, ultimately boosting innovation and competitiveness in an industry that thrives off dynamic evolution.
- Optimized hiring process – when organizations fully understand the skills that they need to drive favorable results, hiring managers can take on candidates faster and with more precision, which reduces time-to-hire and streamlines the overall hiring process.
How to Effectively Make the Shift to Skills-Based Hiring?
Making the move to skills-based hiring requires a shift in mindset on how we equate a candidate’s knowledge for a role. However, for tech companies, the benefits of skills-based hiring are essential for staying successful, as 94% find that skills-based hires outperform those hired based on degrees, certifications, or years of experience, according to ADP. Below are some areas to get started on to adopt skills-based hiring into recruitment efforts:
- Clearly define the necessary skills by conducting a meaningful job analysis for each role and maintaining the findings in a comprehensive skills inventory.
- Revise the approach to job descriptions by emphasizing required skills with inclusive language that encourages diverse talent to apply.
- Work with experts who can accurately assess skills through the recruitment and interview process.
- Use technology and analytics to help measure success by evaluating the outcomes of skills-based hires.
Understanding the Challenges of Skills-based Hiring
As with any new hiring approach, there can be bumps in the road. However, understanding what they are and how to get around them helps make the overall transition easier. Typical challenges organizations encounter when using skills-based hiring are limited skills data, a lack of proper technology, and an unreliable skills assessment.
Failing to maintain an accurate inventory of the necessary skills for each role can cause organizations to struggle with skills-based hiring, ultimately leading to mismatched candidates and poor results. Unfortunately, if your organization lacks the proper HR technology to manage, store, and assess the skills, the problem worsens. Investing in effective skill-matching and HR technology can help hiring managers categorize skills and potential candidates efficiently, often improving the accuracy of a hire.
Working with a talent provider that offers a robust tech stack as part of their talent solution is an efficient way to gain the benefits of the technology, minus the budget investment in purchasing, implementing, and maintaining specialized talent platforms.
This same idea applies to skills assessment tools. An unreliable skills assessment tool can be detrimental to the skills-based hiring approach, as it can evaluate each candidate differently, skewing data and potentially causing inaccurate and unobjective hiring decisions. Talent providers have developed well-practiced processes to standardize assessments, which keep the evaluation of candidates fair, objective, and consistent.
With the rapid evolution of in-demand emerging tech skills, skills-based hiring can help organizations identify what a potential candidate can do in the near term. As technology evolves, traditional, longer-term training is hard-pressed to keep pace with demand that hands-on, tangible skill application can fulfill. To help navigate a new skills-based hiring approach, reach out to expert talent providers, like SSi People, to get started.