How Skills-Based Hiring Could Help Solve Your Talent Shortage

By Robert Half on November 8, 2022 at 9:30am

As quit rates remain high and employee priorities and expectations have shifted, many companies are still struggling to hire the talent they need. Candidates are in the driver’s seat, and the demand for skilled talent outpaces supply across many industries.

There’s not much you can do about the overall jobs market. But you can review and update your hiring strategies to give your company the best chance of landing your top choice for critical roles.

One new tool to add to your kit is skills-based hiring. But what is it, exactly, and how can it help you secure top talent?

What is skills-based hiring?

Skills-based hiring is a novel approach to recruiting that looks beyond traditional education and four-year degree requirements.

In most hiring models, job descriptions are created with a preferred degree or level of education at the top of the must-have list. It’s often the first criteria recruiters, HR departments or automated screening tools use to evaluate candidates. Those who don’t meet the minimum standard are eliminated from consideration long before their hiring manager prepares an applicant shortlist.

Rather than emphasizing academic measures, skills-based hiring focuses on experience earned through all avenues, like community college, on-the-job training and certificate programs. Additional weight is given to transferrable soft skills like communication, time management and collaboration.

While some roles still require four-year or advanced degrees, skills-based recruiting can uncover suitable professionals for entry or midlevel positions in industries like technology, customer service, marketing and creative, and more.

Why use skills-based hiring?

Skills-based hiring offers employers several advantages, including:

1. Access to broader and more diverse talent pools

It’s no secret that higher education costs have made obtaining a four-year degree inaccessible to many people. If this is one of the essential requirements for a role within your company, you could be excluding large pools of highly skilled candidates — including members of underrepresented groups who may have struggled to access traditional education.

Implementing a skills-based hiring approach removes these arbitrary barriers to entry. And because you’re considering candidates your rivals may reject under a traditional hiring process, it can give you a competitive edge in the talent wars.

2. Faster hiring

Extended job vacancies are a hiring manager’s nightmare. Every day a vital position stays open, productivity takes a hit, and extra pressure is loaded on team members to cover the empty role’s responsibilities.

The solution? Use skills-based hiring to speed up the process. Instead of waiting around for a candidate who ticks every box (and there’s a reason recruiters call these job seekers “unicorns”), you can get talent with the skills you need in the door and straight to work.

3. Reduced costs

Time and cost to hire are critical and closely related recruiting metrics. If you’re spending weeks evaluating and rejecting resumes from candidates who don’t meet education requirements, this will quickly eat into your recruitment budget. Reduce your time to hire with skills-based hiring, and you’ll also reduce your costs.

4. Improved staff retention

Skills-based recruiting can also help you hang on to your top talent. According to LinkedIn data, employees without a four-year degree are 34% more likely to stay with their current employer than those with such a qualification.

Hiring based on skills and promoting on-the-job learning, cross-training and professional development can help employees see a career path at your organization. People who feel like you’re investing in them are more likely to be satisfied with their jobs and stick around.

Need some more ideas for boosting employee retention? Get 14 in this post.

How to get started

If you’re ready to implement skills-based hiring, you need to take a few crucial steps. First, review and update your job descriptions. Make sure you focus not on education but on the responsibilities and competencies necessary to perform well in the role. Describe the tasks associated with the position in concrete terms and consider highlighting the types of results or key performance indicators used to measure success.

Next, consider adding skills assessments into your process. These help you determine how well a candidate can perform the required duties of a position. Skills assessments can include writing or coding tests but may also encompass cognitive abilities and personality evaluations. Not only does this allow you to better understand if a prospective employee’s actual skills match what’s presented on their resume, but it may also help identify candidates with growth potential or who may better fit other open roles in your organization.

Remember that you won’t master skills-based hiring overnight. While learning the ropes, you may struggle to assess candidates effectively. But in the medium to long term, you’ll set your company up for success in a talent market where a candidate’s potential may matter more than their credentials.

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