90% of employers using skills based hiring in their recruitment process reported seeing an increase in diversity, according to a report done by Test Gorilla.[1] With margins as high as these, it seems like skills based hiring is the perfect solution to increasing diversity within the workforce.
At the moment, there is an over-reliance on traditional requirements such as degrees, experience and background, which leads to candidates being hired based on their perceived competency, rather than the skills they actually have. Bias, both unconscious and conscious, often clouds the minds of recruiters when they are making decisions without any indication of their aptitude.
Skills based hiring is a modern, effective solution to the limitations of traditional hiring methods. Gone are the days of selecting people for roles based only on their education or background, and the future is here. A future where people are given opportunities based on what they can bring to role, rather than factors outside of their control.
What is skills based hiring?
You may be asking yourself, what is skills based hiring? Why is it so important? Well, skills based hiring focuses on validating the skills of candidates, verifying they have the required talents for a specific role, rather than assuming that their previous life experience and upbringing has anything to do with how well they would fit into a business. In focusing on skills based hiring, businesses can uncover talent from places they may not have thought of.
In short, skills based hiring can create a diverse, adaptable workforce that bring a multitude of experiences, expertise and enterprise to their roles. Next, we will be showing you the top ten things you should know about skills based hiring, and why you should implement it into your business.
10 things you should know about skills based hiring
1. Skills based hiring promotes diversity
In hiring a workforce that is made up of people who have the skills they need for a role, an inclusive workforce should naturally be created. This is because requirements that might exclude certain groups are removed completely, opening the door to talent from anywhere. This creates more productive and creative teams, and 80% of business leaders say making decisions based on skills rather than job history or network would improve fairness in the hiring process and remove bias.[2]
2. Skills based hiring enhances job performance
A skills based approach ensures employees and candidates are using skills and talents they are proven to have. Doing things you are good at breeds confidence and positivity, both of which increase performance. Don’t just take it from us- large companies such as IBM have introduced a skills based hiring approach, and have seen increased productivity.[3]
3. Skills based hiring reduces time to hire
Hand in hand with skills based hiring comes a streamlined recruitment process. With a clear criteria for successful employees for a role and an ability to filter out unsuitable candidates, skills based hiring minimises some of the time consuming elements of recruitment. In fact, 82% of companies reduced their time to hire after adopting a skills based approach, with 36% reducing it by 18% and 19% reducing it by at least 51%.[4]
4. Skills based hiring addresses skills gaps
Skills based hiring can help identify the skills gaps within an organisation. It can assess which aptitudes and expertise would be needed in order to achieve and exceed business objectives. If companies are aware of where there are gaps in skills, they can use this approach to find candidates who possess the talents needed to help teams work together and operate more efficiently.
5. Skills based hiring increases fairness and equity
Perhaps one of the biggest benefits of skills based hiring is its ability to remove a large amount of bias from the hiring process. Too often, our judgement is clouded by facts such as where someone went to university, or their background. In employing a skills based approach, companies can ensure that the only requirement is whether or not someone can do the job, meaning that bias should be removed from the process.
6. Skills based hiring adapts to changing job markets
Because of the way in which skills based hiring focuses solely on skills, rather than qualifications, it allows companies to be flexible in their recruitment processes. Simply by adopting a new skills assessment, businesses can adapt to the rapidly changing job market. A recent example of this is the increasing prevalence of AI- for which companies can now find individuals skilled at using these tools and technologies.
7. Skills based hiring reduces hiring costs
It is undeniable- recruiting talent is expensive, but skills based hiring could be a route out from this. This approach removes expensive processes like job postings and recruitment agencies. It also frees up HR to focus on candidates who have the necessary skills for a role, rather than forcing them to conduct interviews for talent who may not be capable in the position they are applying for. 74% of organisations saw a reduction in cost to hire, and 16% saw their cost to hire reduced by 51%.[5]
8. Skills based hiring supports continuous learning
As employees are hired for the skills they can bring to a business, they are likely to want to develop and enhance their knowledge in the role they are in- simply because they are both good at and interested in what they do. This culture of learning creates more opportunities for development, and allows the company to become more skilled and motivated in all departments and roles.
9. Skills based hiring increases employee retention
When a skills based approach has been used to hire talent, there is an overall positive benefit to the business. Employees are likely to feel valued and respected for what they contribute to a company. They may feel they are matched to roles that align with their skill set, breeding a sense of competence and confidence company wide. In fact, Harvard Business School found that non degreed workers hired into roles that previously required degrees have a retention rate of 10% higher than their degree holding colleagues.[6]
10. Skills based hiring challenges traditional norms
In the current working climate, things are changing all the time with the introduction of more and more Gen Z employees to the workforce. They want to reinvent the wheel when it comes to everything, and hiring is no different. As many people are beginning to see, degrees, experience and background prevent equal opportunities for all. In removing these requirements and focusing on creating skills based opportunities, the future workforce will be more innovative, creative and diverse.
Skills based hiring is a topic that deserves all the attention it gets. It has the potential and power to completely revolutionise the future of the workforce, in all industries. The only thing that should determine success should be whether you are able to operate efficiently and productively in your role. Skills based hiring is built off the back of that idea, and has numerous positive impacts on business operations and culture.
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[1] The State of Skills-Based Hiring 2024 Report – TestGorilla
[2] The State of Skills-Based Hiring 2024 Report – TestGorilla
[3] Skills-based organizations | Deloitte Insights
[4] The State of Skills-Based Hiring 2024 Report – TestGorilla
[5] The State of Skills-Based Hiring 2024 Report – TestGorilla
