Introduction to Skills-Based Hiring

The nature of work is changing, and that’s having a significant effect on hiring.

One of the more exciting changes is that 23% of companies are actively exploring hiring practices that emphasize skills over credentials — skills-based hiring — and another 39% are considering the shift, according to a study from Northeastern University.

Here is a look at what skills-based hiring means for businesses and why you might consider adopting it in your practice.

A Working Definition

Skills-based hiring emphasizes practical, working knowledge for employees; it prioritizes what an applicant can do, rather than the education they already have. Instead of asking an applicant to list their years of experience and degree, you look for capabilities, such as reaching an expert level in Excel.

 “Then — and this is where skill-based hiring diverges from what most employers do now — you test for that skill,” says Kara Govro, laws manager and HR adviser at Mammoth HR. “The testing generally comes before an interview, so you don’t waste time interviewing people who don’t have the skills you need.”

Adjusting to Changing Skill Needs

Changes in technology and the job market can cause companies to require skills that are too new for past graduates to have acquired during school, which undercuts the value of a degree as a substantial qualification.

“The set of ‘required skills’ changes every year, and it's tough for job seekers to keep up with whatever is hot this season,” says Piotr Sosnowski, co-founder of ResumeLab and Zety. Artificial intelligence, “automation and machine learning were not commonly sought after a few years ago but are in high demand now.”

Determine the skills needed for each new position, then split those into what is needed right away and what can be taught, Sosnowski says. “I advise looking into the professional potential of the candidates, investing in in-house training and shaping employees to fit company requirements," he says.

Improving Your Match

“In a labor market where people switch from one vertical to another and even dramatically change their career path, we need to dig into more details to fully understand a person,” says Bénédicte de Raphélis Soissan, CEO and founder of Clustree. “That is why job titles are not enough anymore.”

HR leadership can adopt this growth mindset and improve the chances of a good match by shifting from a laundry list of requirements in a job posting to a list of the types of problems that employees are expected to solve.

Starting Slow

Skills-based hiring is widespread for technology-related jobs, but it isn’t a requirement for all.

“Skills-based hiring, although a really happening trend in the HR world, might not be a good fit for all companies,” Sosnowski says. “Try to recognize what type of characteristics make a high-potential employee.”

As Govro adds, “Thankfully, skill-based hiring isn’t something where employers need to go all-in. You can give it a shot for positions where it seems like it might be useful and stick to tried-and-true methods for others.”