Skills-based hiring is a recruitment strategy that emphasizes the importance of job-related skills over traditional qualifications such as education and experience. This approach aims to identify the right fit for the job by matching the candidate’s skill set with the job requirements, leading to better job performance and improved overall satisfaction.
One of the top challenges associated with skills-based hiring is identifying which skills are most important for a given role. Another major challenge is rethinking how you set job requirements. This process emphasizes skills that can be demonstrated and evaluated through tests, assessments, challenges, assignments or simulations. Adopting this type of process can only be achieved by using objective methods for interviewing and assessing candidates.
First, let’s discuss how organizations identify skills needed to successfully perform in a job. One approach is to start with the information they already have on their employees. This includes performance reviews and feedback from managers related to outcomes in specific areas. Another approach is to ask employees about their expertise and evaluate their work products 1. Hard skills tests can also be conducted to assess technical skills. Soft skills such as communication, teamwork, and problem-solving can be assessed through behavioral interviews or 360 reviews.
A skills inventory is a comprehensive list of the experiences, professional skills, and educational qualifications of employees in an organization. It often lists the major skills required by the business, which employees have those skills and how competent each employee is with that skill. One way to develop a skills inventory is by requiring employees to self-assess their skills by capturing these in a platform that allows HR and Learning & Development leaders to see the skills of workers and teams. They can use the tool to match people with their needs and identify their skills gaps.
Perhaps the biggest benefit of a skills inventory is the ability to see where your employees’ skills are in relation to the skills you need to grow. For example, if your business wants to invest more in social media marketing, and all your marketing employees only have traditional marketing skills, you have now identified a gap between the skills you have and the skills you need. Knowing your skills gaps allows you to make better strategic decisions for your business, both in terms of how you can grow or who you need to hire.
The second challenge in moving to a skill-based hiring approach is rethinking how your organization determines ‘job requirements.’ The traditional approach has been to create a job description that identifies educational, and experiences needed to perform a specific job. The skill-based hiring approach requires organizations to move their thinking to what are the skills that are needed to perform a specific job.
Sticking with our ‘social media marketing’ skills example the question now becomes what specific skills are needed and what level of competency is necessary. Requiring a degree in marketing may be a misnomer because many universities may not be offering social media marketing courses. And, even if an applicant has taken social media courses this does not tell you their level of competencies. To determine this, you must assess their skill level. Thus, identifying the appropriate methodologies to use to assess competencies is a critical requirement to be able to move to skill-based hiring.
Now imagine combining your skill-based hiring approach with the emerging process of predicative analytics which is a data-driven approach that uses algorithms and machine learning to analyze large datasets and make predictions about future events.1 The combination of these two approaches can help organizations make more informed hiring decisions by not only identifying candidates who possess the skills and competencies required for the job, but also have the skills and competencies that have been identified as the ones most likely to produce successful performance. The combination of these two factors has the potential to move job performance to levels that have yet to be comprehended.
An added benefit of combining skill-based hiring and predictive analytics is that it can also help organizations reduce bias in the recruitment process by focusing on objective measures of candidate suitability rather than subjective factors such as cultural fit or educational background.2
In conclusion, the convergence of skill-based hiring and predictive analytics has the potential to revolutionize the recruitment process by enabling organizations to make more informed hiring decisions based on objective data. By leveraging these two approaches, organizations can identify candidates who possess the skills and competencies required for the job.
Skills-based hiring is on the rise. According to a recent survey by LinkedIn, 77% of talent professionals say they are using or plan to use skills-based hiring in their recruitment process. Companies such as IBM and Hilton have already adopted this approach and have seen positive results.3 This is the future of hiring.
- Larralde, Alex, Unlocking the Power of Predictive Analytics in HR: A Comprehensive Guide, https://www.betterworks.com/magazine/unlocking-the-power-of-predictive-analytics-in-hr/; April 14, 2023
- Bryan Hancock, Chris Higgins, Jonathan Law, Sarah Olson, Nikhil Patel, and Katie Van Dusen, Taking a skills-based approach to building the future workforce, https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/taking-a-skills-based-approach-to-building-the-future-workforce
- Joseph Fuller, Christina Langer, and Matt Sigelman, Skills-Based Hiring Is on the Rise, https://hbr.org/2022/02/skills-based-hiring-is-on-the-rise, February 11, 2022.