Skills-Based Hiring: Why It's Important and Why Verifiable Skills Are Key

It might seem obvious that everyone involved in the recruiting and hiring process would take skills into account when selecting a new employee. If you need a full-stack developer who knows Python and communicates effectively, for instance, you simply hire someone with those skill sets.

However, more times than not, hiring managers unwittingly fill positions based on outdated qualifications that are poor indicators of future success.

What is Skills-Based Hiring?

Skills-based hiring involves identifying the specific skills a job requires for success, and screening candidates based on whether they possess those necessary skills or not. With a skills-based hiring approach, a candidate’s verified skills are prioritized over traditional proxies such as a degree from a four-year college or previous work experience.

What’s Driving the Necessary Shift to Skills-Based Hiring?

In 2017, Accenture and Harvard Business School released a study that found that hirers in all facets of business tend to view a college degree as a sort of blanket qualification—essentially a proxy for both technical and emotional skills. The degree is the bar job applicants must, at minimum, meet before being considered. This is a problem, especially in today’s tight hiring market where demand for talent far outreaches supply.

Limiting yourself to a pool of candidates with a certain college degree eliminates potential high-performers who:

• Might not have access to costly higher-education opportunities
• Have acquired in-demand skills in non-traditional ways
• Haven't optimized their resumes to conform to applicant tracking system barriers

Fortunately, the HR industry at large is moving more towards a skills-based hiring approach. According to research from SHRM, 79% of employers say skills assessments are just as or more important than other hiring criteria, and respondents revealed a willingness to consider candidates without a college degree or the minimum years of experience.

Another problem with the more traditional approach to hiring is that skills assessment is usually pushed to later in the hiring process. Organizations bring in candidates that meet their requirements, such as a bachelor's degree or a certain number of years of experience in a similar role. Then, after the first few rounds of interviews, the hiring manager may get around to assessing the candidate's skills. But by that point, the short list may be missing candidates with the skills the role truly needs for success.

Skills-Based Hiring is a More Equitable, Data-Based Approach to Recruitment

HR professionals and hiring managers who are invested in finding the right fit for their open positions should use talent-matching tools and tactics that are based on verified skills and data. Not only does it make more sense to focus on the skills necessary to get the job done at the onset of recruiting, it can also help reduce bias in the hiring process.

Sourcing candidates on verified digital credentials puts the focus on a candidate’s skills and abilities rather than outdated proxies that may have been earned due to opportunity and privilege. While 40% of white Americans hold a bachelor’s degree, only 26% of Black Americans do, a disparity much starker for women of color. Taking a skills-based approach to source and recruiting can help reduce inequity and restore fairness to the talent sourcing process.

Why Verified Skills Are Key to Skills-Based Hiring

The key to a successful skills-based hiring approach is ensuring that the candidate’s skills are verified, and not simply listed as a line item on a resume. Digital credentials are the verified proof of skills, packaged neatly for hiring managers to utilize during the recruitment process. And if you use a hiring tool that screens candidates based on verified credentials, you can quickly and confidently narrow the number of candidates down to the best-matched talent for the role.

Job performance will ultimately be impacted by several key factors including skillset, personality fit, and individual motivation and values. So after doing initial top-of-funnel screening with a skills match, hiring managers should use a combination of interview questions and validated assessments to identify the candidate most likely to perform well on the job.

How to Begin Switching to a Skills-Based Hiring Strategy

Switching to a skills-based hiring strategy will involve some upfront effort, as the roles you’re looking to fill will need to be evaluated based on the skills they require for success. This also means creating skills-based job descriptions and putting verifiable skills front and center in your hiring process. [More on how to write a skills-based job description]

The end result will be well worth the effort, however, and save your organization the time and cost of rehiring for roles that weren’t a good fit. And the obvious benefit is that you’ll bring on new talent that has a greater likelihood of excelling in the role.

To help you get started, here are four tips for implementing a skills-based hiring strategy:

1. Make digital credentials your go-to

Digital credentials are quick, verifiable, and make the process of vetting candidates easy. Rather than search professional networking sites for keywords, take a skills-based recruiting approach and simply sort candidates by the verifiable credentials you expect a potential employee to have mastered.

2. Start small and gain momentum

You don't have to overhaul the entire recruitment process at once. Instead, pick one role that tends to have the most turnover and start there. It’s likely that the turnover is a result of screening based on the wrong qualifications, and if switching to a skills-based approach improves retention, you can use that as a business case to senior leadership for expanding the program organization wide.

3. Enlist the help of managers and top performers

Your top performers and managers have an intimate understanding of what it takes to get the job done successfully, so tap into their expertise. As an HR professional, it's up to you to gather their input and translate it into a skills language that candidates use. Turning this intellectual property into actionable information is a great way to optimize performance throughout the organization.

4. Use an AI-powered hiring tool

Machine Learning and AI-powered hiring tools are revolutionizing recruitment and applicant sourcing—making it easier and faster to find employees with the right skills for open positions. Just be sure the tool you use is compliant with industry regulations and meets AI-transparency standards. 

Put Skills-Based Hiring Into Practice With Talent Assessments

A skills-based approach to hiring and promotion can help remove barriers for candidates that might not have access to traditional degrees, and widen the talent pool so you can find the best match for your open position.

Pearson TalentLens uses psychometric insights at the forefront of sourcing candidates to help you make the best hiring decisions for your organization.

Learn more about Pearson TalentLens, or download our white paper, Empowering the Tech Workforce of the Future: A Guide for Identifying, Mapping, and Bridging the Skills Gap to learn more about how you can make the switch to skills-based hiring.