Written by Alanna Harrington, Managing Research Consultant
Skills-based hiring is an approach that advocates evaluating candidates based on their skills rather than on degrees or other, more conventional credentials. This approach has become prominent in recent years partly due to a high demand for talent and certain digital skills in particular. Placing greater focus on job-relevant capabilities versus what’s on a resume when hiring early career professionals has a lot of benefits, but it’s important not to get swept away by the trend and instead consider skills-based hiring from a strategic perspective. Here are some do’s and don’ts that we recommend when utilizing a skills-based hiring approach for those just entering the workforce.
- Do comprehensively assess the skills you need
Before beginning any skills-based hiring initiative, it’s important to identify the key competencies and skills that matter most for the roles you’re hiring for. Is problem-solving more important than technical proficiency? Should you focus on collaboration over individual achievements? Defining this upfront will help you build an effective hiring process that reflects the true requirements of the job. Having a common framework across roles will aid with consistency and is especially important in an early career context where applicants might apply for numerous roles within one organization or apply for a rotational training program.Don’t overengineer it
With the shift to skills-based hiring, there may be a natural temptation to throw out all previous competency frameworks and start from scratch from a skills perspective. However, it is worth noting that skills and competencies are not completely different approaches. Skills are learned, applied abilities that include both job-specific skills (e.g. coding, graphic design) and transferable skills (e.g. time management, giving feedback). In contrast, competencies are broader sets of behaviors that contribute to job performance which are influenced by knowledge, skills, ability, personality, and motivation. Both approaches focus on objectively identifying the right person based on job relevant criteria. So, don’t get hung up on finding the perfect terminology or searching for different assessments to measure every single narrow skill you’ve identified as important. Consider the fundamentals – such as what are the underlying behaviors that might make someone perform that skill well – and focus on those. - Do consider transferable skills
Skills are evolving rapidly. According to the World Economic Forum, 44% of workers’ skills will be disrupted in the next five years, with cognitive and creative skills, as well as resilience and agility being reported to be growing in importance. This builds on the previous point that it doesn’t make sense to reinvent your entire hiring strategy around a specific skill that may look completely different in a couple of years’ time.Instead, focus more holistically on your candidate as a person – not just whether they check a box for one specific position. It is more effective to learn about the transferable skills and competencies they possess which are likely to predict performance in a variety of contexts and that indicate someone’s ability to learn new skills. When it comes to job-specific skills, don’t place too much importance on a specific tool or technology.Instead focus on those transferable skills such as communication influencing, or critical thinking that will remain important regardless of the evolution of the job over time. By having a more comprehensive view of the candidate – not just how they stack up to one particular job description – you will set up them up for long-term success where they can use those skills to grow with your organization.
Don’t forget about learning & development
Focusing on transferable skills and the potential to learn is a great hiring strategy, but it means nothing if the individuals don’t get the opportunity to learn or transfer skills when on the job. In recent research conducted by Talogy, hiring managers for early career professional roles mentioned that providing adequate learning opportunities was a key challenge. Regardless of your hiring approach, applicants for these roles are likely to be relatively young and have only had so many opportunities to acquire skills either in a conventional or unconventional way. The research also found that opportunities for development is the third most important factor for early career professionals and job seekers when applying to an organization. Ensure that your hiring and L&D strategies are aligned so that new hires have the means to gain or enhance the skills that are important. It is also likely to enhance your attractiveness as an employer. - Do use it as a strategy to enhance diversity
While academic research on the impact of skills-based hiring on diversity is scarce, available commercial research provides early indications of the benefits for diversity. Research conducted by LinkedIn in 2023 suggests that opening jobs to workers without bachelor’s degrees will increase applicant pools by up to 9%. In jobs where women are specifically underrepresented, this approach can increase the proportion of women candidates by 24% more than it would for men. In 2021, IBM found that employing a skills-based approach has increased diversity across different levels.Don’t rely on it completely
It’s not enough to adopt a skills-based approach to hiring early talent and expect it to produce a diverse applicant pool. Consider other factors that might be limiting the appeal of your organization to certain demographic groups. Do you have a clear commitment to diversity, equity, and inclusion? Are these groups represented at your management and executive levels? For this approach to be effective, it’s important to focus on diversity and fairness after hiring throughout your organizational processes and culture to retain diverse talent and create a climate of inclusion.
Enhance early career hiring with a skills-based approach
Skills-based hiring is a powerful tool but try not to get lost in the hype. It’s not a magic fix for all of the challenges experienced when hiring early talent. By combining it with a clear talent attraction strategy, a comprehensive learning and development offering, and a commitment to diversity, you can build a workforce that’s not only equipped for today’s challenges but primed for the future.
In sum, do create a strategic plan for how your organization can focus more on skills and competencies in hiring, but don’t expect miracles from this approach alone. Competition for highly skilled early talent is fierce, and you need other tools in your arsenal to attract and retain individuals who are a good fit for the role and the organization.
