Skills-Based Hiring: Focusing on Abilities not Degrees
To succeed at a job, an employee must have the skills necessary to perform their role and duties, this is the foundation of skills-based hiring. However, companies would often prioritize degrees and academic achievements over practical skills when looking at job applicants’ resumes, even if having a degree does not guarantee to have the required skills for the job.
This degree-based hiring has been the norm for HR managers for decades. Still, the recent global pandemic has forced companies to re-evaluate their hiring methods and accelerate their shift to skills-based hiring. Employers are increasingly looking to hire applicants with the right skills for the job instead of those with just degrees who lack the required skills.
In 2020, LinkedIn observed an increase of 21% in job postings that advertise skills and responsibilities rather than qualifications and an increase of almost 40% in the number of job positions that do not require a degree. With this change, companies are starting to place greater importance on what job applicants can do instead of focusing on their degrees and the schools they attended.
Skills-Based Hiring Explained
It is the process of evaluating and hiring job candidates based on having specific and predetermined skills or competencies as the main criteria for employment. These skills could be different depending on the job requirements, but they are usually technical, cognitive, physical, or soft skills in nature.
Skills-based hiring prioritizes an individual’s technical abilities and core competencies over degrees and credentials. This method requires employers to write clear job descriptions and skills requirements to inform job candidates of what to expect. This would ensure that all potential employees have precisely what it takes to perform the job requirements, regardless of their education, background, or other factors. This can be achieved by testing job applicants’ soft and hard skills to ensure they match the criteria.
The goal of skills-based hiring is to:
- Help employers identify qualified and knowledgeable candidates more efficiently and precisely.
- Give job candidates a chance to objectively highlight their skills and abilities.
Vital Skills that Companies Look for in Job Candidates:
- Communication: It is essential for almost any job or role, which is why it is one of the most sought-after skills. This skill could be used in several important ways, from coordination with teammates to interactions with clients and partners.
- Problem-solving: It is another powerful skill that can be relevant for various job positions and situations, and it is crucial for advanced roles such as technical and management positions. It is a requirement for employees to have this skill so that they can correctly make decisions, analyse data, and tackle challenges in the workplace.
- Time management: Job candidates who can effectively manage their time to complete their duties and plan their daily tasks have a competitive edge when landing jobs. This skill will allow them to handle any projects with time pressure and not allow themselves to get overwhelmed by work due to procrastination.
- Collaboration: No single employee can handle the entire workload of the company by themselves. That is why HR managers are looking for collaboration skills in potential employees. Their potential ability and willingness to function within a team make all the difference when they need to work with other employees to achieve organizational goals.
Transition to Skills-based Hiring
The Pandemic has forced businesses worldwide to learn that if they want to; survive, be competitive, and thrive in any situation and environment, they must be adaptable, flexible, and willing to change. In 2022, this change comes from updating company hiring strategies to meet current needs and deficiencies better.
Companies are encountering skills gaps in their workforce. In the manufacturing industry alone, the skills gap is risky, leaving an estimated 2.4 million positions unfilled between 2018 and 2028. If companies shift to skills-based hiring, there would be a substantial increase in the size of potential employee candidates.
Additionally, various skills essential in different industries can be learned much faster than acquiring a four-year college degree, which could help in mitigating the skills gap experienced by companies.
Many gifted people do not have a college degree for a variety of explanations. Companies should not waste their chance of gaining a good employee just because they lack a degree. This wastefulness is a massive inefficiency by excluding individuals who could have been an excellent fit for the job and company.
Hiring employees based on their skills will also allow HR managers to see if a candidate is equipped to do the job correctly. It is a win-win situation for both employers and employees. Job applicants who were previously ignored and unwanted will be able to pursue worthwhile career paths, even if they do not have college degrees. In contrast, companies will have more candidates to fill open positions.
Benefits of Skills-Based Hiring
- A Larger Pool of Potential Employees
Most company HRs continue to require an undergraduate degree for entry-level job applicants even if workers could do the job without a degree. This creates a situation where it is hard to fill up entry-level positions because degree holders would naturally be more expensive, and they would have a lower tendency to apply for low-level jobs. This is why 41% of HR managers believe entry-level positions are among the most difficult vacancies to fill.
Using skills-based hiring removes the barrier of having degrees and other credentials as a requirement for specific jobs. This would naturally widen the potential job candidate pool to include applicants who might not have college degrees but have the necessary skills to do the job.
- Getting the Right Person for the Job
Having a degree or coming from a good university does not automatically guarantee success in the workplace. This is how careers work in any profession or industry, so companies no longer view a job candidate’s college degree as essential and do not consider educational attainment as a basis for their ability to do a job. In fact, according to a LinkedIn study, 69% of professionals think job skills are more important than a formal college education.
Skills-based hiring tries to emulate the experience of working in the job role that a potential employee is being considered. For example, a graphics designer may undergo specific design assessments tailored to the company’s needs to ensure that the employee is a good fit.
- Faster Hiring Time
There is a lengthy recruitment process in degree-based hiring because HR managers would only identify and evaluate the candidates’ skills in later parts of the process. It would potentially waste a lot of time when an employer finds out that a candidate with a degree does not have the needed skills to fulfill the job.
Applying a perspective focused on the candidates’ skills can drastically reduce the length of hiring processes. Testing those skills can be quick and efficient if companies already have pre-made assessments like online skills-testing platforms.
- Reduces costs
Selecting employee candidates based on their skills and qualifications can significantly reduce the amount spent by employers on training and development. Hired candidates can also take on their duties sooner, meaning there is less wasted time and resources for any unfilled position in the company.
- Increases Employee Retention
Hiring employees based on their skills would ensure a proper fit for their job specifications and requirements, thus allowing them to be more engaged and motivated in the daily grind of their jobs. Additionally, according to LinkedIn research, job candidates that do not have four-year college degrees will stay 34% longer in companies than employees with degrees. This increase in retention would benefit companies by increasing the overall productivity and efficiency of the organization.
