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How is skills-based hiring different from traditional hiring?
What are the benefits of skills-based hiring?
Accelerated by the pandemic, skills-based hiring has become popular as many companies have dropped their college requirements. But what does shifting to a skill-based hiring strategy really look like? And how will it benefit your organization?
Skills-based hiring focuses on practical skills and performance rather than traditional qualifications. In recent years, more and more jobs that were once opened to high school graduates are now requiring four-year college degrees. This phenomenon is known as degree inflation. However, required degrees increase opportunity gaps and make upward mobility challenging. A shift towards skills-based hiring prioritizes competency over credentials.
Recruiters are often looking for candidates who check the most boxes: their academic degree, the reputation of their past employers, time in the relevant industry, and referrals. Many employers think that degrees indicate better soft skills but studies show the performance margins between those with degrees and those without are minor, outside of certain industries like finance.
Skills-based hiring is more relevant than ever. Due to COVID-19, tens of millions of workers in the U.S. lost their jobs or had to reduce their work hours to take care of children, especially women. This led many individuals to focus on upskilling and reskilling while they looked for work. So, despite having career gaps on their resume, many job seekers have more relevant skills than they did before the pandemic. Even without upskilling, many overlooked job seekers often have similar skill sets to more in-demand candidates. For example, many people in the foodservice industry have 71% of the skills needed to thrive in customer service.
Tight job requirements make it hard to hire. According to a Harvard study that surveyed 600 hiring professionals, 61% said they threw out applications from candidates without a degree. That is a lot of talent you could be missing out on! Focusing on skills rather than degrees and other credentials will widen your talent pool and increase your odds of finding the right hire. With a larger talent pool, you will also accelerate your time-to-hire and have access to a more diverse pool of candidates. Skilled workers take less time to onboard and train which will save you time and money.
Perhaps most importantly, a focus on skills will result in better retention rates. Those without 4-year degrees stay 34% longer than their degreed peers. Demonstrating to employees that you believe in them and want to invest in their careers will make them stay with your organization.
Before incorporating skill-based techniques into your hiring strategy, study your current recruitment process to find where a candidate's skills are taking the back seat. Question your requirements for each role and consider if they're necessary or if a candidate without those requirements could plausibly do the job just as well. Once you’ve gathered your data, consider the following...
Instead of leading with “requirements”, lead with the role’s “responsibilities”. Job postings that mention “responsibilities” and not “requirements” received 14% more applications per view than job posts that did the opposite. If you feel including requirements is necessary, focus on KPIs and results over a list of credentials. For instance, a marketing position may expect their new hire to increase website traffic by 10% in their first 6 months. Candidates appreciate knowing what success will look like in their role. It also highlights the impact they’ll be making on the company.
Learn how to write more inclusive job descriptions to empower underrepresented candidates to apply to your open roles
If a candidate looks like a good fit, don’t rule them out just because they don’t have every required skill on your list. Certain skills can be picked up on the job quickly.
Traditional education isn’t feasible for many people because it’s expensive. Today, the internet allows for a plethora of alternatives like coding boot camps and online certificate programs that often teach more real-life skills than colleges.
Most candidates will have proficiencies that will be useful in a variety of industries and positions. When a job seeker doesn’t have industry experience look for transferable skills like strong communication, dependability, leadership, and project management.
These assessments are designed to measure knowledge and competency in a given field. Hard skills assessments will reveal a candidate’s ability to code, type, or write creatively. Work samples are also helpful as they are designed to mirror the tasks a candidate will be responsible for should they be hired.
Shifting to skills-based hiring won’t put more strain on recruiters, with the right tools in place. For instance, Fetcher allows recruiters and hiring managers to list which skills they’d like each candidate to have. When creating a search, Fetcher even has a field to add obscure skills and experiences for our humans-in-the-loop to incorporate into the sourced batches of candidates. The benefit of having people to support Fetcher’s algorithms is that our team works behind the scenes to validate each candidate and ensure only those that are the best fit are sent to you.
People want to work where they’ll grow. Companies with additional learning opportunities will attract more candidates and improve their employee retention.
Besides its numerous benefits, skills-based hiring increases equity in the workforce. It’s essential to remove barriers to well-paying jobs for those from underrepresented backgrounds. Degrees and other expensive credentials are no substitute for ability. Get started by evaluating your job requirements and eliminating those that are outdated. Encourage your organization’s leadership by sharing all of the positives that come with shifting to a skills-based strategy. Finally, ensure your plan is sustainable by building learning and development into your work culture.
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