A big shift in hiring: Why is skills-based hiring taking off?

We have heard of how current changes in technology will give rise to “jobs of the future” and how there is a demand for skilled workers who will be ready to fill roles in industries that will flourish and other industries that have future roles still to be defined. 

The rise of skill-based hiring

With the rise of more automation in technology, and tools relying on generative AI technology, companies around the world now are in need of workers with an updated skill set and for those who have had some form of specialized training. 

However, there seems to be a widening gap between what jobs demand and the number of talents skilled enough to do them. In fact, in 2024 the US is experiencing talent scarcity where 3 out of 4 employers fail to find the right talent for available jobs.

Another survey by a global management consulting firm says 9 in 10 company leaders expect to experience or are currently experiencing a skills gap. 

In addition, the traditional hiring process that normally finds its talents from people who have college degrees, have work experience, and attractive resumes seems to have become ineffective in hiring people with the right skills. Nowadays, people can build their skill set by learning from online platforms. 

Also, more and more younger workers are following non-traditional career paths, making them more open to accumulating new skills as they transfer to different roles and companies. There is also a rise in the number of self-employed individuals who focus on adding to their skills through online certifications. 

Skills-based hiring and traditional hiring

As the shift to a more skills-based approach to finding and recruiting talents happens, hiring teams have to level up their knowledge and strategies to sift through hundreds of job applicants in order to find talents with the right skills for success. 

• Skills assessment as one of the most important criteria to be considered for a job. HR teams are now more open to considering talents who do not have a college degree or years of experience for a role, while assessing candidates’ skills early on in the recruiting process. It gives companies immediate access to a talent pool that has the potential to do the job. 

• The use of talent-matching tools and strategies to verify skills decreases bias in the recruitment process. Many companies now spend big money on hiring more diverse talent, yet current strategies seem to lag in producing results.

Using tools that can eliminate hiring bias and that can give more equitable opportunities based on skills and not on race, sex, and gender can already reduce company expenses on diversity, equity, and inclusion (DEI) programs

• Using skills-based job descriptions that focus on skills that can be verified from the beginning requires effort on the hiring team, but it is worth it. Hiring teams can start with roles that experience the highest turnover, and create a screening process with qualifications that match specific job requirements.

Identify what skills are required, and what areas can be learned while doing the job to attract more qualified candidates that may have the skills but not the years of experience. 

• Eliminating  spending so much time and resources on reading through hundreds of resumes while focusing on measuring actual skills makes top talents stand out. Your company can use tools, either internally made by your HR team or available software from other developers, to measure specific skills. 

Instead of companies just taking the applicants’ word about their resume and CV, companies avoid relying on blind faith when it comes to skillset. 

The hiring trend shows that more and more companies are gearing towards skills-based hiring as those who were employed using this approach tend to deliver more results and stay engaged in the company. 

Companies do not have to restructure the whole hiring process all at the same time, but trying out these different skills-based hiring strategies allows companies to discover the advantages of hiring based on verifiable skills. 

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