Skills-based hiring is on the rise. In 2022, 56% of companies used it. In 2024, that number went up to 81% of companies. So if you’re not already using skills-based hiring to fill vacancies, you risk falling behind. Especially in today’s fast-paced and ever-changing world.
But what is skills-based hiring, and how can you use it to benefit your organization?
What is skills-based hiring?
Skills-based hiring is when a company hires employees based on evidence of their skills, not their previous roles or qualifications.
If someone doesn’t need a degree to do a job, why ask for one? Evidence they can perform the role’s responsibilities is more important. Plus, it means they’re more likely to succeed in the role, too.
Why is skills-based hiring so effective?
98% of employers think skills-based hiring is more effective at spotting talented candidates than resumes. Similarly, 94% think it’s more predictive of workplace success.
Skills-based hiring is so powerful that 82% of employers feel employees hired this way stay longer. What’s more, 90% feel it reduces mis-hires.
It could also shorten time-to-hire, as you’re looking more at how effective someone is in a role than qualifications alone. According to 78% of employers, it reduces hiring costs, too.
Since you’re focusing on skills, it’s no wonder that 90% feel that it improves workplace diversity. It’s a simple way to remove unconscious biases around things like where someone studied or their past workplaces.
Skills-based hiring also has benefits for employees. In fact, 81% feel it’s helped them get new employment opportunities—compared to 66% in 2023. That’s a huge increase in a year, showing just how effective skills-based hiring can be.
How to get skills-based hiring right
Now that we’ve discussed the benefits of skills-based hiring, let’s see how to get it right:
Consider what skills someone needs to succeed
Instead of dividing your requirements into hard or soft skills, ask yourself what someone would need to know or be able to do to succeed in the position.
For example, communication skills are a vital part of any role, but they’re particularly important for someone working in marketing, human resources, or public relations. However, these skills are also important for all managers even though they’re seldom taught.
Sometimes, organizations hire or promote people to managers because they’re capable of doing the technical side of a role without considering the soft or people skills required.
Less than half of managers receive training or support on how to manage. So this is an important skill to consider when hiring someone for a managerial role. Especially when you also factor in that 43% of employees leave managers, not companies. Adding this one skill to your management criteria as part of your skills-based hiring initiatives could save you a lot on future hiring costs.
Use an application form
Instead of asking for someone’s resume, which can be full of inflated qualifications or unnecessary information, get them to fill in an application form as part of your skills-based hiring approach.
This gives you more control over the information you collect. It also allows you to evaluate someone’s skills and how they’re relevant to the job. You’ll get a much more accurate representation of someone’s skills which will enable you to compare candidates’ abilities more easily.
Train your managers to interview effectively and ask the right questions
Training managers to interview effectively is pivotal to hiring the right people for a job. And that’s especially true when it comes to skills-based hiring.
When interviewing, there’s always the risk of managers falling into the “beer test” trap. That’s where hiring managers choose someone they’d go for a beer with, rather than the person who’s the most competent for the role.
Training them to ask questions that evaluate someone’s skillset is therefore key. This will also help mitigate unconscious biases and focus on if someone can do a job rather than how likeable they are.
Using a scorecard can also help hiring managers to evaluate someone’s skills more objectively. It ensures that regardless of who conducts the interview, everyone receives a fair and accurate evaluation. So then the best fit for the role will get the job based on scores, not gut feelings.
Update your onboarding process
If you change how you hire to skills-based hiring, you need to consider your onboarding process, too. It may impact how you onboard certain roles. For example, new hires may need to learn how to use a particular software they’re unfamiliar with.
It’s important to keep all the information they need to know in a single, easy-to-find and update location. That way, employees can refer to it when they need it and HR can update and replace outdated documents without it leading to confusion.
Support new hires with employee groups
Employee groups are a great way for employees to network, find mentors, share knowledge, and seek help from colleagues.
Using Workrowd, you can organize your employee groups, set up activities to celebrate and onboard your new hires, share relevant resources, and so much more. Get in touch today to book your demo and find out more.
Conclusion
If your business isn’t already taking advantage of skills-based hiring, there’s never been a better time. The evidence is clear: it reduces time and cost to hire while increasing retention rates. Employees have a better understanding of the role before they start, so anyone applying for a role is more qualified in every sense of the word.
Alongside this, skills-based hiring future-proofs your business. Even if someone’s role becomes obsolete due to technological advances, focusing on employees’ skills allows them to upskill and reskill more easily. That way they can stay with your business and you get to retain their internal knowledge and desire to be a part of your team.
Support your skills-based hires
If you’d like to support your skills-based hires, giving them a central place to tap into everything you offer is key. With a streamlined hub for your employee experience, you can connect new hires, develop mentoring relationships, give people somewhere to share interesting reads, and so much more.
Get in touch today to find out more about how Workrowd can empower you with the tools and data to take your company culture to the next level.
