What is Skills-Based Hiring?

Traditional hiring methods involve screening based on the education, credentials, and experience mentioned in the resume. However, recruiters today prefer a more reliable way of hiring new professionals. It is through the skills-based hiring process. What is skill-based hiring? 

The skills-based hiring process is a popular recruitment strategy in which candidates are hired based on evidence of their skills. Here, the candidates are tested on their mentioned skills, which could be work experience or education. This helps in making the right screening and hiring decisions. 

In a skills-based hiring process, the recruiter will have a clear set of skills required for a specific job. These will be tested during the recruitment process, based on which the candidate will be shortlisted for the role. This is one of the best ways to deal with resource shortages, and it focuses mainly on skills rather than educational qualifications. If a candidate is fit to carry out the role, they can acquire that position. 

Importance of Skills – Why do Skills Matter in Today’s Job Market?

To focus on the actual skills and potential of the candidates, making them more apt to the role and thrive. This is advantageous not only to the candidates but also to the companies, where they only meet candidates who will most probably be the right fit. 

Fact Stop – According to a LinkedIn study, around 45% of employers on LinkedIn in 2023 used skills data to fill open roles, which is 12% more than in 2022. Hence, skills are considered to be the measuring tool for hiring units.

This strategy or method has been changing the overall structure of the hiring process. To hire based on skills implies the candidates have to be tested on these skills. Hence, new methods for data collection and devices are needed to maintain and develop these skills. The face of recruitment has been changing with the leveraging of software technology that is specifically meant for hiring based on skills. This offers the recruiters a more detailed comprehension of the skills and abilities of the candidate pool. 

Advantages of Skill-based Hiring

Increased Candidate Competency and Decreased Onboarding Time

One of the most notable advantages of skill-based hiring is its scope to bring in new hires who are competent to meet the expectations of the role. This helps in onboarding the most fit candidate into the organization. 

Imagine a mediocre candidate being hired for the role only based on their educational background. The new hire will only have theoretical knowledge and must be put through extensive training to have hands-on experience. This is a clear example of why setting the skills and abilities of candidates as the priority in optimizing the hiring process. This makes it more meaningful and rewarding. 

Reduced Bias in the Hiring Process

Bias is always thought of as an inevitable part of recruitment and has been an issue. Hiring decisions can go berserk if recruiter bias interferes with the process. Due to recruiter bias, incompetent candidates can often be placed in positions that can affect performance efficiency, failing to identify the best fit. Skills-based hiring process is the right solution to eradicate any pitfall due to bias. 

Skill testing software can effectively ensure this issue is resolved. In the process, once the resumes are screened, a skills testing round using recruiting software can be conducted before shortlisting for the interview. This way, only the most apt and qualified candidates are more likely to be hired. 

Increased Employee Engagement and Retention

There is a significant increase in employment engagement and retention when the right hires are placed in the right roles based on skills, abilities, and learning capacity. Understanding the role and responsibilities and analyzing and implementing the right skills is essential, especially for competitive job roles.

Fun Stop – A study conducted by the Dublin Business School shows that employees who are hired based on skills show better engagement and retention.

The right appreciation can be given and the employees often feel seen in such an environment. Finally, there is a structured hiring process in place for candidates, developing a workforce that is proficient in the role that they play in the organization. 

A Widened Talent Pool

With skills-based hiring, the workforce can be a comprehensive set of multiple and varied skills. This is a notable advantage of skill-based recruitment. There is a wide spectrum of skills that make up the workforce that drives performance, and achieving the set goals and objectives. 

The hiring process not only focuses on their qualification but also their competency and expertise in the field. This is different from traditional methods that significantly limit the scope of diversity.

Decrease Cost-per-Hire and Time-to-Hire

The last notable advantage of the skill-based approach is the significant drop in the cost-per-hire and time taken to hire new resources. This approach aids financial as well as operational stability. The financial and operational metrics are often used to judge the performance of the recruiters. Hence, an assessment based on skills can land companies on the right candidate minimizing employee turnover and hiring cost and time.

Main Steps of a Skills-based Hiring Process 

Organizations must have a clear idea of how to conduct these skill-based assessments and hiring. Establishing a defined structure would allow the recruitment team to navigate multiple candidates through the process with ease. Some steps that can be taken to make skill-based hiring a success. 

Step 1 – Identify the Skills Needed for the Job

The first step is to determine and list the skills needed for the job role. The hiring team must set goals for hiring and must align these goals with the overall objectives of the organization. This aids in prioritizing the important skills and shortlisting the necessary ones for assessing the candidates. This step must also include the department manager for which the hiring is done. It is important to work with them closely. The input from them will help identify and prioritize the skills to focus on.

For example, a software developer needs to be tested on technical skills in working using programming languages such as Java, C++, etc. as well as essential soft skills such as communication, ability to learn, adapt, and problem-solving skills. 

This is why the skills-based hiring process is a holistic approach that not only looks at the qualifications but also focuses on the candidates and the potential they have. This approach also allows the recruiters to have a comprehensive understanding of the skill gaps and identify the right candidates accordingly. 

Step 2 – Create Skills-based Job Descriptions

Once the skills have been identified and listed, a compelling job description has to be created that will attract the attention of potential candidates. A good skill-oriented resume is far beyond just a list of requirements. An organization targeting a group of candidates, must know the requirements and convey that in the job description with precise and clear content. The content must resonate with the right candidate. 

For example, if you are creating a job description for a marketing manager. The key highlights of the content must be on qualities such as leadership, communication, problem-solving, and risk management. Being specific about skills brings in the candidates who are most likely to fill these requirements. 

Step 3 – Evaluate candidates’ Skills

The last stage is taking the candidates through the different stages in the process. The process can be divided into various stages, starting with resume screening, followed by skills assessments, and then the interview rounds. Once the candidate pool has been shortlisted through resume screening, they can be assessed for skills. Skills can be assessed through different modern approaches such as case studies, skill-centric interviews, and practical tasks where the candidates are asked to perform a given task in a given time. 

For example, an SEO specialist can be asked to create a brief on SEO strategies or develop a content brief by doing keyword research. Similarly, in the case of a programmer, coding and other technical proficiency can be tested. 

This way, the most proficient candidates can be easily identified from the results generated. A structured hiring process helps in effective goal and objective setting and achieving. With accurate representation of candidates’ skills and potential, there is a clear choice of the positions to be filled. 

How to Adopt Skills-Based Hiring Practices?

Moving from the traditional methods of hiring to a new approach. It is important to make this transformation strategic and planned. This way, the hiring team will have a better understanding of the process and become more accustomed to it. The new approach must be initiated with enough training for the team. The ideal way to carry out the process is to implement it in phases, and then expand it to multiple teams. Let us take a look at how to adopt skills-based hiring practices.

Building a Skill-based Hiring Team

To ensure that the skill-based hiring process is carried out smoothly, you must employ a dedicated team that would effectively manage the process end-to-end. The team must consist of specialists who can give better insights to uplift the process to efficiency. They will have a deeper understanding of the skills to focus on when assessing. 

While building a skill-based hiring team, remember that the team must be interdisciplinary, consisting of HR professionals, recruiters, as well as department managers for the respective roles. Moreover, it can be beneficial to external consultants for their expertise-based insights. Having a strong team can boost the effectiveness of the hiring process. 

Training for Skills-based Hiring

The team employed for skill-based hiring must be trained to work on a skill-based approach. This can be achieved through developing comprehensive training programs that also involve the stakeholders. The training programs will help the team equip themselves with the skills required to evaluate and assess candidates using a skills-based approach. 

Specific attention must be taken to ensure that the hiring managers or the recruiters come face-to-face with the candidates. They must be given both theoretical and practical experience in managing the candidates filling multiple job roles.

Case Studies: Successful Examples of Skills-Based Hiring 

We have some real-life case studies on popular companies that have successfully transformed the hiring process to a skill-based approach. Let us take a look at them. 

Google

As one of the most popular tech giants, Google is a company that offers enormous opportunities with innovative hiring approaches. For various skill-based roles, the companies focus on these skills with skill-based assessment methods that aid them in filling the multi-functional organizational setup. So, how does Google carry out this process? 

Google indulges in an innovative amalgamation of additional as well as the latest approaches. By emphasizing on practical skills required for the role along with soft skills such as problem-solving, communication, leadership, etc. This way, Google identifies the right candidate with both theoretical and practical knowledge, who knows what to deliver and performs better. 

LinkedIn 

LinkedIn is the largest networking platform, majorly developed for bringing together job seekers and employers. The core idea of LinkedIn profiles lies in detailing one’s skills, based on which opportunities are brought to them. LinkedIn’s algorithm is based on skill-based hiring and works in a way where the right profiles are connected to the hiring companies or job roles. 

LinkedIn is a great example of how skill-based hiring is in vogue and companies have been successfully identifying the right talent. This technology also allows job seekers to confidently apply for the roles if they have the skills and not the qualifications. 

Amazon

Amazon is a company that emphasizes data-driven decision-making, that is, candidates have to prove their skills and abilities that would fit the role. With the diverse range of roles that the company offers, the focus lies in hiring candidates who are committed to work. 

By prioritizing certain skills, Amazon conducts skill-based assessments and updates and refines them based on technological and industrial advancements continually. Amazon’s case study shed light on the importance of scalability. Skill Sets for every role evolve, making it crucial for both candidates and companies to evolve along with these upgrades.

Where Is Skills-Based Hiring Taking Hold? 

The skill-based hiring method is taking over multiple industries and job roles as employers are embracing the idea of skills being the priority. A study conducted by BCG, a consulting firm, compares the percentage of job ads that require a college degree or equivalent in the years 2017 and 2022. The following table shows the values obtained. 

	2017	2022
US	82.5%	79.3%
Canada	79.2%	80.2%
UK	77.7%	76.3%
Australia	93%	91.5%
Singapore	67.7%	71.3%

Moreover, an analysis of the top five roles with higher promotion for both skill-based hires and the traditional hires. 

Job Role	Difference in skills-based vs. traditional hires
Call center manager	11%
Clinical case manager	6%
Auditor	6%
Account execute	5%
Budget analysts	4%

The study also concludes that there is a 9% longer average tenure of skills-based hires. These skill-based hires have better problem-solving approaches and make relevant explorations within the role and organization. These hires tend to show more engagement as well as motivation, in turn, contribute to the overall performance and success of the organization. 

Why Choose Skillrobo for Skills-based Hiring?

Skillrobo is an AI-based pre-employment assessment platform that offers solutions to conduct skills assessments for any job role. The skill assessment software is gaining ground as employers today prefer candidates with a solid skill set over just a degree qualification. Skillrobo is a robust platform preferred over top companies in hiring the right candidates. 

A versatile platform with 100+ pre-existing test templates that are completely customizable, enables a smooth conduction of the process. Be it any role, using the AI test generator, SEYARC, using which new skills or tests can be generated. This exceptional and transformative platform allows recruiters to create tests, invite candidates, and generate instant results. 

Leveraging skills assessment software significantly reduces the need for extensive manual efforts. Employers now can simply allow technology-driven solutions like Skillrobo to take charge of routine tasks and hire the most apt candidate for multiple roles. With Skillrobo you get – 

• Fully customizable tests
• A diverse range of skills to tests
• A user-friendly platform
• Enterprise integration
• Analytics and reports
• AI test generator – SEYARC

Conclusion

As there are technical advancements, skills become essential in working along with these technologies. In conclusion, it is a must to hire candidates for their skills and not simply based on their degrees or the educational institutions they are from. Depending on traditional methods such as resume screening has become obsolete and the skills-based system is becoming the ultimate way to streamline and standardize the hiring process. Moreover, focusing solely on skills removes any sort of bias from the process, making it more meaningful and fair.

An ideal way to effectively carry out this new approach is to leverage skill assessment software like Skillrobo, where tests can be created from scratch and automatically filter candidates based on their potential, making them hassle-free and time-efficient. To know more about Skillrobo, sign up now!