The rise and benefits of skills based hiring

Not enough qualified candidates? Your hiring approach might be the problem.

If you have an open role, you might be tempted to rattle off a long list of requirements for candidates to meet. After all, you want to make sure you find the very best person for the job.

While that sentiment is valid, it’s certainly a factor that could be hurting your candidate search. In our recent Talent Trends report, 34% of organizations across various industries said they found it difficult to hire in the last 12 months. The top challenge for 37% of those organizations? Finding candidates with the right skills.

If you’re in a similar situation, it may be worth adjusting your recruitment strategies, especially for those in industries facing severe skills gaps and labor shortages.

Skills-based hiring is gaining traction across the U.S., touted for its efficiency and record for securing top performers. Keep reading to learn more about skill-based hiring and whether you should consider adopting it for your open roles.

What is skills-based hiring?

Unlike the traditional hiring method, which evaluates an applicant’s skills, education, and experience, skills-based hiring focuses on their competence. It requires hiring managers to look beyond candidates’ education and work experience to identify their transferable skills or ability to learn.

The U.S. leads in skills-based hiring

While countries around the world are beginning to see the benefits of this approach to hiring, the U.S. is ahead of the curve. Many large companies, including Apple, IBM, and Amazon, have already adopted skills-based recruitment practices.  

Additionally, the Biden administration has dropped degree requirements for government tech jobs. As of June 2024, more than a dozen states have already shifted to more skills-focused hiring as many departments struggle to fill open roles.  

Benefits of skills-based hiring

Skills-based hiring provides a clear benefit to candidates, especially college graduates and role changers who have yet to strengthen their resumes. But what value does it give employers?

Widens your applicant pool

It can be all too easy to dismiss a resume that doesn’t check one or more of your boxes. For skills-based hiring, it’s important to be mindful of how you evaluate applications. Doing so will increase the number of qualified candidates for a single job post and could lead to a stronger shortlist.  

Ask yourself the following questions when reviewing candidates and creating job descriptions:  

• Is a master’s degree necessary for this role? What about a bachelor’s degree?
• Do they need to have specific industry experience to fulfill the role’s responsibilities?
• How have they acquired relevant skills? Do they have transferable skills they can apply to the role?  

Shorter hiring timelines

The longer a role stays open, other team members are forced to pick up the slack, paving the way for burnout. Not to mention, the hiring process demands more of your time, money, and energy as it wears on.

With skills-based hiring, you have more candidates to choose from, allowing you to find a suitable fit sooner. This hiring solution allows you to streamline the candidate’s experience and improve your time-to-hire, leading to wins across the board.

Improves retention

Candidates will appreciate a reprieve from the degree-led hiring processes and will likely be eager to learn and work harder to prove themselves. To reinforce this, skills-based hires also have a 9% longer tenure than traditional hires.

Additionally, the possibility of growth within an organization is important to employees. Our Talent Trends report revealed nearly a third of workers view career advancement as important to their job satisfaction. High-potential candidates you find through skills-based hiring are perfectly primed for professional development and promotions.  

A more diverse workforce

It can be disheartening for candidates to see only a certain kind of professional land the jobs they want. However, hiring more of the same can put your company at a disadvantage. Those with similar backgrounds will likely have similar ways of working and problem-solving, limiting innovation.  

Hiring based on competencies over credentials opens the door for people who have various perspectives and experiences. On your team, they can share unique ideas to help drive meaningful, creative solutions and enhance overall productivity.  

Need hiring support?

Skills-based hiring can be a game-changer—if you execute it correctly. If you need guidance on your way to securing the right candidate, we can help.

At Michael Page, our recruitment consultants provide end-to-end support, from the job description to onboarding. Start a conversation about your hiring needs.