Why Skills-Based Hiring Is the Secret to Better Recruitment

Anton Platt

by Anton Platt

5 min read
Why Skills-Based Hiring Is the Secret to Better Recruitment
Managing Teams Tools Guides Future of Work Careers

If you make hiring decisions for your company, skills-based hiring is a great way to improve your recruitment game and gain a competitive advantage by bringing in overlooked talent. Since skills-based hiring is still far from standard practice, the chance to get a leg up on the competition is significant.

A growing trend, skills-based hiring checks all the boxes for recruiting capable talent for those hard-to-fill remote jobs critical to your company’s operations.

Remote work means you can hire from a worldwide talent pool and gives companies the chance to shift from more traditional hiring practices to skills-based hiring.

What is skills-based hiring? Whereas conventional recruitment strategies place great emphasis on college degrees and other credentials, skills-based hiring is all about what a candidate can do.

Degree inflation has become a major problem in recent years. College degrees are being required for jobs that simply don’t need them. This has increased the salaries of college administrators, but essentially saddled graduates with debt while earning them a ticket into a job they could have done without the degree.

But degree inflation isn’t just a problem for employees. A study by Harvard Business School demonstrates that degree inflation costs businesses money. The majority of employers pay between 11 and 30 percent more for college graduates, according to the study.

Skills-Based Hiring Is on the Rise

Over the past decade, some prominent business leaders have become major proponents of skills-based hiring. One is IBM executive chair Ginni Rometty. When IBM broadened its hiring pool, opening up 43 percent of available positions to candidates without a four-year degree, the effects were positive. According to Rometty, “It didn’t dumb down our workforce. What we found is their ability to perform, their curiosity, matched everyone’s.” Opening up hiring to nontraditional candidates has value for society as a whole too, as “economic opportunity is the way to social equality.” It can help to bring “all the underserved communities into our economy,” Rometty adds.

Virginia-Rometty IBM President and CEO Virginia Rometty delivers a speech at a 2019 technology conference in Paris, France. Chesnot | Getty Images

Famed entrepreneur and Tesla CEO Elon Musk is another believer. The issue with prioritizing candidates with degrees, claims Musk, is that college is not all it’s cracked up to be. “College is basically for fun,” Musk believes, “not for learning.” Instead of a degree, the real test for job candidates should be “evidence of exceptional ability.” That’s because “a track record of exceptional achievement” is likely to “continue into the future.”

Should Your Company Use Skills-Based Hiring?

Consider this fact: According to research by LinkedIn, the position of food server in the United States has a 71 percent skills compatibility rating to a customer service specialist. Capitalizing on this untapped economic potential is of huge potential benefit to employers and employees alike. A remote job in customer service not only gives the food service worker greater flexibility and higher wages, it also gives them access to health care and other corporate benefits.

Employee turnover numbers fall among non-degreed employees, the LinkedIn survey says. Of additional benefit to employers, employees without a college degree are willing to accept lower salaries than degreed candidates. Why? Because they’ve already been working in lower-paying jobs and they aren’t burdened with student loan debt.

Switching to a Skills-over-Degree Hiring Approach

The process of removing the degree-holder requirement from your company’s hiring practices involves several steps:

  • Assess your jobs:
    Before removing the degree requirement from any job, remember that a degree is valuable for many jobs. And keep in mind that removing the degree requirement for a job never precludes college-educated candidates from applying. As a general rule, though, middle-skill and entry-level positions are best suited for skills-based hiring.

  • Rewrite your job descriptions:
    Beyond removing the degree requirement from a job description, the entire document should be oriented toward the skills required to be successful at that particular position.

  • Add a responsibilities section:
    Focus on the actual results you want from a hire when creating a job description. Include quantifiable performance indicators if possible. Encourage (or, perhaps, even require) candidates to submit a skills-based résumé. According to LinkedIn, job postings that make this simple change get 14 percent more applications per view.

  • Test first, interview later:
    Conduct hands-on tests of potential job candidates before you narrow down employees based on their résumés. The recruiting process often places technical assessments last in the hiring process, after the field of candidates has been filtered. But if you’re hiring in software engineering or another job category for which hands-on testing is practical, checking a candidate’s technical skills before going through the interview process makes common sense.

  • Check your mindset:
    Attitudes don’t change overnight. We’ve all grown up believing it takes a degree to get anywhere in life. You likely worked hard for a college degree and believe in its value. Negative stereotypes of people without degrees are common. Make sure your inherent bias doesn’t keep you from hiring the most skilled person for a job.

  • Make a commitment:
    Make a firm decision to assess candidates based on their skills, both hard and soft, instead of their degree status. Remember that degrees often have limited practical value. There is strong evidence that college involves very little actual learning.

Tools and Resources for Hiring Skilled Employees

In your quest to find skilled employees, there are certain tools, resources, and services that might help.

HackerRank and DevSkiller

HackerRank and DevSkiller provide technical testing and challenges for employers hiring in technical fields. Their platforms assign job candidates tests specifically related to the jobs they would be doing in such areas as software engineering, web development, QA and testing, cloud and DevOps, data science and machine learning, and cybersecurity. HackerRank has challenges in 35 different programming languages.

Skillful

Skillful is a nonprofit initiative dedicated to assisting people without college degrees to get hired. It offers resources to help hiring managers adopt skills-based practices, including a job posting generator that identifies the necessary skills for an open job, as well as guides to determine baseline skills for IT or advanced manufacturing positions.

Pymetrics

It might seem like hiring tools could only be good for measuring hard skills, but the AI-based recruiting platform Pymetrics disproves that theory. The platform employs behavioral assessments to provide an objective evaluation of a candidate’s soft skills.

Cappfinity

Cappfinity measures a candidate’s core strengths and competencies using evidence-based assessment tools. This testing platform promotes its ability to help clients hire employees whose strengths align with company values, while also being committed to improved diversity, equity, and inclusion hiring principles.

It’s also worth considering if it’s possible for your company to design its own internal tests to assess candidates.

Skills-Based Hiring Is the Future

The rise of remote work has demonstrated how much the business world can change the way it does business. Skills-based hiring is a major component in addressing labor shortages, high turnover, and the impacts of the Great Resignation. Of course, many jobs do require degrees or other formal certifications. The beauty of skills-based hiring is you broaden the hiring pool without losing quality.

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