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Set Up Your Skills Strategy

How to Develop a Skills-Based Hiring Strategy

Written By April Bohnert | September 25, 2023

Abstract, futuristic image generated by AI

The job of a recruiter is all about hiring the best talent. But sometimes the methods used for determining who the “best” candidates are let a lot of highly qualified people slip through the cracks. If traditional strategies like resume reviews aren’t the best indicators of a candidate’s potential success, then what is?

If you’ve been keeping up with recruiting trends, you’ve likely heard the buzz around skills-based hiring. According to recent McKinsey research, hiring for skills is five times more predictive of job performance than hiring for education and more than two times more predictive than hiring for work experience. 

But what exactly is skills-based hiring? And more importantly, how can it help you level up your hiring strategy?

In this article, we’ll define skills-based hiring and share how you can craft a robust hiring strategy that will turbocharge your recruitment process.

What Is Skills-Based Hiring?

In traditional hiring models, candidates are often assessed based on their degrees, past job titles, and years of experience. Yet, in a world filled with online educational resources and nontraditional opportunities to learn and hone new skills, these elements don’t always correlate with job success. 

This is where skills-based hiring strategy comes in. It’s an innovative approach focusing on a candidate’s skills and abilities rather than their pedigree or background. 

By embracing this new model, you’re not just selecting candidates who can do the job today but those who can grow with your company and adapt to future needs. In order to implement a skills-based strategy though, recruiters need to rethink everything from how they write job descriptions to how they structure interviews and assess qualifications. 

The Benefits of a Skills-Based Hiring Strategy

Before we dive into the nitty-gritty of building a skills-based hiring strategy, let’s take a step back and understand why it’s worth considering in the first place. 

Taps into a Broader Talent Pool

When companies recruit based on skills rather than a person’s resume, they significantly widen their talent pool. According to data from Handshake, companies that utilize a skills-based approach to recruiting multiply their eligible talent pool by 2.3. By focusing on what a candidate can do rather than where they’ve been, hiring teams open doors to non-traditional candidates, career switchers, or self-taught individuals. This approach can be especially valuable in industries where the demand for talent often outstrips supply, such as tech.

Fosters Diversity and Inclusion

Skills-based hiring inherently breaks down barriers and fosters diversity. The same data from Handshake shows that expanding a talent search to include skills or interests yields an even larger growth in the population of underrepresented candidates — 3 times more veterans and 3.5 times more women and black students. When we shift our focus from degrees and pedigrees to skills, we eliminate biases based on educational background, socio-economic status, or even age. The result? A more inclusive and diverse workforce that brings varied perspectives and boosts innovation.

Reduces Turnover and Boosts Employee Engagement

Hiring for skills often leads to a better job fit, as you’re matching an individual’s abilities to the tasks they’ll actually be doing. A better fit can increase job satisfaction, reduce turnover, and lead to higher productivity. Moreover, employees without a traditional four-year degree stay 34% longer than employees with such a degree.

Future-Proofs Your Workforce

In Wiley’s recent Closing the Skills Gap report, 69% of surveyed HR professionals said their organization had a skills gap, up from 55% in a similar survey in 2021. As technology evolves, so too do the skills necessary to remain competitive. A focus on skills ensures your workforce remains adaptable and ready to tackle future challenges.

Building a Skills-Based Hiring Strategy

Now that we understand the “why,” let’s shift gears and focus on the “how.” Building a skills-based hiring strategy may sound complex, but with these actionable steps, you’ll be well on your way to recruitment success.

1. Identifying Skills Requirements

The first step is to clearly define the skills required for each role. Go beyond basic job descriptions — engage with the team and the hiring manager to understand what tasks the new hire will be doing and what skills they need to excel in that role. Consider both technical skills, like coding or data analysis, and soft skills, such as communication or problem solving.

2. Assessing Skills

The next step is assessing these skills during the hiring process. Traditional interviews might not cut it here; you need methods that can objectively evaluate a candidate’s abilities. Tools like HackerRank, for instance, provide coding challenges that can effectively assess a candidate’s programming skills.

Consider a mix of assessments for a holistic view. This could include online coding interviews, task-oriented assessments, or behavioral interviews that reveal how a candidate applies their skills.

3. Building a Skills-Based Culture

Your skills-based hiring strategy should not end once a new hire comes onboard. Promote a culture of continuous learning within your organization. Encourage upskilling and reskilling. This not only boosts employee engagement but also ensures your workforce stays relevant and adaptable to evolving market demands.

Some effective methods for workforce upskilling include:

  • On-the-job training: Perhaps the most effective way to learn is by doing. Encourage your team to take on new responsibilities or projects that will stretch their current skill set. Provide them with resources and support, but allow them the autonomy to learn and grow.
  • Online courses and certifications: The internet is a treasure trove of learning resources. Companies like HackerRank, Coursera, and Udemy offer courses in a wide range of tech subjects. Additionally, these courses often come with certifications that can further validate your team’s new skills.
  • Conferences, webinars, and workshops: These events provide opportunities to learn from industry experts and keep up with the latest trends. Encourage your team to attend these events, either in person or virtually.
  • Mentoring and coaching: Pairing less experienced team members with more experienced ones can be a great way to transfer knowledge within the team. The less experienced members can learn from the successes and mistakes of their mentors, while the mentors can also learn from fresh perspectives.

Key Takeaways

Embarking on a skills-based hiring journey might seem daunting at first, but remember: the end results are worth the initial effort. It’s not a mere shift in your hiring process, but a strategic decision that can significantly impact your organization’s future.

As we continue to move toward a skills-based future, the potential for increasing access to job opportunities, promoting equity, and boosting the competitiveness of the workforce is vast. However, the transition to a skills-first approach isn’t without challenges. It necessitates changes in job descriptions, recruitment strategies, and training programs. But with strategic planning and investment, these challenges can be transformed into opportunities, benefiting employers and employees alike.

This article was written with the help of AI. Can you tell which parts?

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