Many of have heard of it, some of us believe in it, and it is a topic circling the world of HR and recruitment- but what is it? What exactly is skills-based hiring, and how can it be used best? This blog will discuss what is meant by skills-based hiring, what it’s benefits are, alongside it’s potential drawbacks, and how it impacts the candidate experience. Let’s get started!
Skills-based hiring is defined a recruitment style that prioritises what a potential employee can do above traditional requirements such as experience or a degree. It seems to make complete sense- why shouldn’t we hire based on aptitude and attitude? After all, opportunities should be given based on how well you will be able to do your job, and not based on your educational background or work history.
The Benefits:
According to a recent study done by Test Gorilla, employers in 2024 are finding it harder to source top talent than they were in 2023. There are probably a multitude of reasons for this, but could skills-based hiring be the solution to the problem so many HR professionals face?
It seems that skills-based hiring isn’t just about giving talent a chance- it’s a method that works, backed up by statistics. A total of 81% of employers use skills-based hiring in their recruitment process, and an astounding 94% of them believe it is a process more predictive of on-the-job success than resumes. Perhaps this stems from the human instinct to either sell ourselves short, or overegg our abilities when talking about what we can do. If there is concrete and unbiased evidence about the way in which a candidate will perform in a role, this surely seems a safer and more reliable route of hiring.
As an HR professional, what are the top challenges you face? Is it improving diversity, increasing retention, or minimising time and cost to hire, along with your mis-hire rate? If these ring a bell, perhaps it is time to seriously consider skills-based hiring as an alternative. Research shows that any of those problems you might face are improved by adopting a different approach.
Another key benefit of using skills based hiring is the ability to gain access to a diverse range of talent. In removing requirements that might eliminate core groups of people, we open doors to everyone. Potential, rather than prerequisites, becomes the force for good. This view can make sure that talent are given opportunities based on what they are able to achieve, instead of what they have or have not done in the past.
The Drawbacks:
With so many benefits, it seems hard to imagine the potential drawbacks of skills-based hiring, but as with most things, nothing is entirely perfect. One potential downfall of skills-bases hiring is the notion that as an industry we may swing entirely the other way- completely disregarding and even looking down upon candidates with degrees or relevant education, when perhaps they may have the relevant knowledge and critical thinking skills for a specific role.
Another potential challenge is the age old question of “how?”. How is the best way to assess the skills of candidates? Unlike traditional certifications and degrees, skills assessments can lack quality and be subjective, as well as varying significantly from business to business. For instance, practical tests may not fully capture a candidate’s ability to apply their skills in real-world scenarios, while interviews can be influenced by the interviewer’s personal biases. As a result, organizations may struggle to ensure that their skills assessments are both fair and effective, potentially leading to the selection of candidates who do not truly possess the necessary skills for the job.
The Candidate Experience:
As recruiters, it is always important to keep the candidate in mind. As the world spins ever faster forwards, Gen Z are becoming more prevalent in the workforce. Every generation faces different challenges and struggles, and as a result, we can’t expect them all to behave the same way, in society as a whole, as well as in the workplace. In 2023, over 17 million of Gen Z entered the workforce, and this number will increase year upon year.
So, what do Gen Z think about skills-based hiring? Perhaps unsurprisingly for a generation that are changing the way we approach things, they are largely in favour of it. According to the study done by Test Gorilla, 85% of employees prefer skills based hiring, because it gives them a chance to demonstrate what they are capable of, rather than simply writing it down. Another reason it is so popular with candidates is that they feel they are able to see the kinds of skills they will be using on the job, taking a little of the guesswork out of their future career.
Perhaps one of the fundamental reasons Gen Z prefer skills-based hiring, is because a staggering 84% of them believe that it can reduce hiring bias. It seems as if young people are eager to see a world where aptitude, attitude and skills are the only prerequisites for success.
Conclusion:
Skills-based hiring is a revolutionary approach in hiring talent, prioritising what a candidate has the potential to do, instead of what they have previously done. This method solves and aids a multitude of recruitment challenges, from providing access to the best talent, to promoting diversity and inclusion, and even removing barriers to entry for individuals who may lack formal educational certificates or degrees.
However, it is essential to strike a balance and not completely disregard traditional qualifications, as they can still provide valuable insights into a candidate’s knowledge and critical thinking skills. The key lies in developing fair and effective skills assessments that accurately reflect a candidate’s capabilities in real-world scenarios.
As the workforce continues to evolve, particularly with the increasing presence of Gen Z, skills-based hiring aligns well with the preferences and values of the younger generation. By focusing on aptitude, attitude, and skills, we can create a more equitable and efficient hiring process that benefits both employers and candidates alike. Embracing this approach can lead to a more dynamic and capable workforce, ready to meet the challenges of the future.
