What is Skills-based Hiring? + How to Get It Right

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Gem Siocon

With a degree in Psychology and more than 10 years of experience in digital marketing and HR, Gem Siocon writes HR and marketing articles packed with practical and actionable advice.

Challenges and Opportunities in Degreeless Hiring

According to HR Dive, job posts without degree requirements are growing faster in some industries than those requiring degrees. For instance, degreeless posts in financial services are growing 354% faster, followed by 282% faster in accommodation and food services and 240% faster in technology, information, and media. Certain functions are also seeing faster growth. In accounting, the number of degreeless job posts is growing 453% faster than those without, compared to 92% faster for administrative roles and 68% faster for engineering roles.

Regarding actual hires, accommodation, and food service hires without professional degrees have grown 11% faster than those with degrees, followed by 6% faster growth in financial services and 3% faster growth in technology, information, and media. Other industries, such as consumer services, entertainment, and government administration, hire more workers without degrees. Across all three of these top industries, project manager and administrative assistant roles were among the top five occupations filled by hires without degrees.

Why Skills-Based Hiring Practices are Gaining Momentum

The shift from degree-centric to skill-centric hiring practices can be attributed to employers emphasizing practical skills over formal education. This is especially true in tech roles that require coding or data analysis. For instance, Google hires software engineers without bachelor’s degrees but with equivalent practical experiences:

Skills-based hiring aims to close the skills gap in the workforce by identifying specific skills. This ensures the right fit for specialized roles and helps address the skills shortages in industries like tech and blue-collar jobs.

Hiring for skills also removes barriers for nontraditional candidates, such as those from underrepresented backgrounds or self-taught professionals. Focusing on ability rather than a bachelor’s degree encourages diverse hiring practices.

Benefits of Skills-Based Hiring

Access to a Bigger Talent Pool

Skills-based hiring allows recruiters to hire applicants using nontraditional methods or paths. For example, they can hire skilled IT professionals who have graduated from boot camp or gig workers for a specific, one-time task.

By removing educational barriers, you can access more diverse candidates who are perhaps just as talented and can do the job just like their college counterparts.

Improved Employee Performance and Retention

Hiring for skills ensures new employees meet the job’s demands from the get-go. When you know what to expect from new hires, you are more likely to reduce your turnover rate and improve job productivity and performance.

Faster Recruitment Process

When you hire people based on their skill sets, you reduce the need to filter irrelevant qualifications. Thus, you reduce the hiring time by simplifying the job-matching process and focusing on the relevant skills.

Better Alignment with Business Goals

Hiring people for their abilities ensures that their skills directly support your business objectives. Bringing in a wider range of talent and perspectives increases your company’s creativity and competitiveness.

How to Implement Skills-Based Hiring Effectively

1. Identify Key Skills for Each Role

The first step in your skills-based hiring is conducting a skills audit to identify the critical competencies needed for a job. This involves analyzing current employees’ skills, assessing job tasks, and pinpointing skills gaps.

Collaborate with department heads to refine your skills requirements because they have direct knowledge of team functions and daily tasks. For example, a hiring manager might assume all engineers need expertise in Python. However, when they consulted the department head, they learned that SQL and cloud computing skills are essential due to the team’s specific project needs.

Perform a thorough job analysis to define the core skills needed. Job analysis involves breaking down a job role into its essential tasks and responsibilities to understand the skills and knowledge required to perform these tasks effectively. This analysis often includes interviews, observation, and reviewing job performance data.

Use market research to define high-demand skills for specific roles. Market data can provide information about emerging skills that may soon become necessary, helping your organization stay innovative and competitive.

2. Restructure Job Descriptions and Job Postings for Skills-Based Hiring

Write job descriptions that prioritize skills over degrees and experience. So, list the skills needed. For example, instead of a requirement like “Bachelor’s degree in Computer Science or related field,” the job description could say, “Highly proficient in JavaScript and Python, with experience in front-end and back-end development.”

Instead of requiring “3-5 years of experience in digital marketing,” the description might state, “Strong understanding of SEO, SEM, and content marketing strategies, with proven ability to increase organic traffic.” This approach clarifies the skill set needed rather than a set number of years. So job seekers with less experience but strong abilities can be considered for the open position.

To include all qualified candidates, avoid words and phrases that could exclude certain demographics. For instance, replacing ‘native English speaker’ with ‘proficient in written and spoken English’ encourages non-native speakers who may be fluent in English to apply. To ensure you cross out exclusionary language from your job posting, check out Ongig. It will scan and flag terms that are ageist, sexist, and racist.

In your job post, provide a clear example of how skills will be used in the role. Candidates understand not only what skills are needed but also how they will be applied. So, this way they know what is expected of them when hired. You can write, ‘You will use your expertise in Excel and data visualization tools to create monthly financial reports highlighting key metrics and trends for stakeholders”.

3. Use Skills Assessments and Portfolios

Use skills assessments, tests, and simulations to evaluate candidates. Nick Nagatkin, founder of tech recruitment agency Digis, has firsthand experience in skill-based hiring for highly technical roles. He said, “I believe in crafting tailored skill assessments that reflect actual job tasks. We create realistic simulations or coding challenges for tech roles. And this helps identify candidates who not only claim skills but can actively demonstrate them.”

He also encourages candidates to submit work samples, portfolios, or past projects. “I recommend focusing on portfolios or GitHub contributions for tech roles, as they showcase actual projects and coding quality. This approach has helped us hire developers whose skills may not be as evident on paper but are clear in practice.”, he said.

Use pre-interview technical evaluations

“Implementing technical screenings or case studies before the interview lets us focus only on candidates who’ve already proven themselves. This ensures our interviews are deeper and more productive. I’ve found this especially useful for specialized positions where soft skills are secondary to technical know-how,” he added.

Talent sourcing acquisition and management specialist Julia Yurchak strongly favors adding peer assessment to the screening process. This is because the collaboration gives valuable insight into a candidate’s cultural fit and adaptability to a particular team environment.

She said, “We involve all relevant team members in the hiring process by building a structured rubric to evaluate candidates during a group exercise or group interview. This rubric will focus on specific skills that the team needs in order to be successful, including communication, problem-solving, and teamwork. These sessions give team members a way to see whether a candidate will fit in seamlessly, provide valuable feedback, and contribute to the team’s success.

For instance, we recently placed a Chief Marketing Officer at a high-growth tech startup. During the interview, we did a joint creative brainstorming session with the CMO’s future marketing team. They particularly valued the candidate’s listening ability, their capacity to synthesize thoughts, and their open communication – all competencies listed on the peer assessment rubric”.

4. Train Hiring Managers to Identify Skills

Train hiring managers to conduct interviews focused on behavioral and technical evaluations.

Use structured interviews to test the candidate’s problem-solving abilities. Anna Petosa, a People Operations Executive and HR expert at Swag Drop, found structured interviews more helpful in hiring. She said, “ Earlier in my career, I’d find myself sidetracked by vague questions that didn’t get to the heart of what a candidate could actually do. Sticking to predefined, skill-specific questions helps me stay focused and not deviate. I’ve seen firsthand how it helps us get honest answers about a candidate’s experience. Behavioral questions make it even better—when a candidate tells me exactly how they’ve handled similar challenges, I get a much clearer sense of what they can bring to the team.”

5. Integrate Skills-Based Data into Recruitment Platforms

Use skills-based hiring platforms to support your recruitment process:

TalentMesh – ATS that allows recruiters to create skills-based recruitment by identifying the required soft and hard skills and structuring the recruitment around them. The tool enables the embedding of customized soft and hard skills tests that yield a talent score to sum up the candidate’s fit for the position.

Braintrust – post your job in the tool, and it will show you the top talent in its network for your role and automatically invite them to apply.

Overcoming Challenges in Skills-Based Hiring

Addressing potential bias in skill assessments or tests

Biases happen when certain tests favor certain demographics, learning styles, or experiences. All candidates have an equal opportunity to demonstrate their abilities when your assessments are bias-free.

Make sure your tests are relevant to the job. Use real-world scenarios reflecting the tasks the candidate will perform once hired. Pilot tests the evaluations first with a diverse group of participants to identify any unintended biases in questions, scenarios, or scoring mechanisms. Ensure tests are accessible to candidates with disabilities. For example, provide accommodations like screen readers for visually impaired candidates or alternative test formats.

Dealing with resistance from non-traditional candidates

You may face resistance from your company when you shift from traditional recruitment that relies on educational background to skill-based hiring. This is because some employers still prioritize candidates with heavy educational qualifications.

To overcome the resistance, you must educate stakeholders, such as hiring managers and top management. Highlight employees who have little educational qualifications but excel at work. Implement small-scale skills-based hiring initiatives to demonstrate effectiveness before rolling out organization-wide changes. Highlight the benefits of skills-based hiring, such as the broader talent pool, reduced hiring time, and improved retention rates.

Example:

If hiring a software engineer, consider candidates who completed coding boot camps or are self-taught. However, they must be able to demonstrate proficiency and showcase successful hires with similar backgrounds.

Ensure alignment with long-term career development opportunities

You must strengthen your learning and development programs to support your skills-based hiring efforts. When employees see a clear connection between their skills and career growth, they’re more likely to stay motivated, engaged, and committed to the organization.

Perform skills mapping to align hiring with career development. By mapping out these skills, organizations can identify skill gaps, growth opportunities, and potential career paths for employees. Offer training programs, mentorships, and certifications. Evaluate their immediate performance, skill acquisition, and leadership potential.

Example:

For a data analyst hired based on skills in Python and Excel, offer training on advanced analytics tools (e.g., Tableau or Power BI) and support their transition into a senior data scientist role.

How to Write Job Descriptions for Skills-Based Hiring

Writing job descriptions that follow a skills-based hiring strategy is an important step toward finding the right talent for your open positions. So, unlike traditional hiring practices, this new way focuses on identifying in-demand skills rather than solely relying on experience requirements or a four-year college degree. Let’s dive into some best practices to craft job ads that highlight skills over credentials.

Focus on the Necessary Skills for the Role

Start by identifying the technical skills, transferable skills, and adjacent skills a candidate needs for the given role. Instead of listing four-year degree requirements or emphasizing past experience, outline the skills-first approach by describing what the job actually requires.

For example, if you’re hiring for a position in tech companies, specify the job training and job simulation tools candidates might use, rather than stating they need an academic degree. So, this shift helps attract skilled workers who may have followed alternative routes like certifications or apprenticeships.

Use Clear, Inclusive Language

The best way to appeal to a broad pool of qualified applicants is by using language that eliminates unconscious bias. So, avoid overly complex jargon or industry-specific terms that might alienate potential candidates. Instead, emphasize skills that level the playing field, such as communication or problem-solving, which are essential for different roles.

This approach is particularly useful in industries like the public sector, where talent shortages are common. So, by framing your job ads inclusively, you’re addressing the opportunity gap and helping more job candidates feel confident applying.

Reduce Emphasis on Traditional Qualifications

For HR teams and hr professionals, removing degree inflation from job ads is a key step toward skills-based hiring practices. So, highlight ongoing training, internal mobility, and opportunities for professional development instead of requiring a four-year degree for all open roles.

Additionally, even large corporations are rethinking their approach. A Harvard Business School report found that educational achievements like degrees are often overemphasized, closing the door to new talent. Therefore, replacing these with skills-based model criteria expands your pool of potential candidates.

Showcase Growth Opportunities

A skills-based hiring approach doesn’t end with the hiring processes. So, make it clear in your job descriptions that ongoing training, mentorship, and the onboarding process will help employees develop the future needs of your company. Also, emphasize opportunities for cross-functional growth and learning. This appeals to job candidates who are eager to grow in their careers.

For instance, tech giants using generative AI often provide job training on the job. Thus, enabling skills-based hires to succeed without relying on their past experience in a specific field.

Use Tools to Identify and Describe Skills

Tools like job description generators can help you clearly outline the necessary skills for the role. They also ensure that job descriptions remain free from bias and aligned with skills-based practices. So, consider incorporating a job simulation in the interview process, which lets potential candidates demonstrate their abilities rather than focusing on traditional qualifications.

Why It’s Time for a Change

Shifting to a skills-based hiring approach is a critical move for organizations across industries, especially as we face the next decade of hiring challenges. Therefore, with growing talent shortages and demand for in-demand skills, this new approach is helping companies discover and nurture new talent.

So, by adopting a skills-first approach, your organization can make better hiring decisions, bridge the opportunity gap, and attract a wider, more diverse pool of qualified applicants. In recent years, this strategy has already proven its value for tech companies, public sector organizations, and more.

Why I wrote this:

Skills-based hiring can help recruiters and HR find candidates with the right skills, stay competitive in tight labor market sectors, and address problems with understaffing. To expand your candidate pool, write inclusive job descriptions that attract candidates from all demographics. Contact us for more information.

Shout-outs:

Educational Requirements Are Gradually Disappearing From Job Postings – Indeed Hiring Lab

Fewer Job Posts Now Require Degrees. How Has That Changed Hiring? – LinkedIn

Fewer job posts require degrees, though hiring hasn’t caught up – HR Dive

December 26, 2024 by Gem Siocon in Hiring