15 min read

4 Ways to Adopt Skills-Based Hiring in Retail

The COVID-19 pandemic has had an incredible impact on labor markets right across the world — particularly in the retail industry. 

In the US alone, there were 878,000 job openings in retail in March 2021, a 53% increase from the same period the year prior, according to the Bureau of Labor Statistics. 

While we’re beginning to reenter a state of normality in a (somewhat) post-pandemic world, the flow-on effect is still evident today. 

While still in the thick of a candidate short market, retailers have no option but to find alternative methods to source top-tier retail employees to help recoup lost revenue. 

For some organizations — including Under Armour, Amazon, Walmart, Costco, McDonald’s, and Chipotle — this means increasing the minimum wage to attract more candidates. For others, it means reassessing their current recruitment strategy’s effectiveness and turning to modern approaches, such as skills-based hiring, to ensure they source the best candidates for the role.  

In this article, we’ll delve into what skills-based hiring is, how it differs from traditional recruitment, and four ways to adopt skills-based hiring in retail.  

What is skills-based hiring?

Skills-based hiring means finding the best candidate for the role based on their skills, capabilities, and talent, rather than potentially redundant requirements like educational background, college degrees, or previous experience. 

Traditional hiring places weight on criteria that don’t necessarily help determine if a candidate can perform the role’s duties more successfully than others, whereas skills-based hiring sees hiring managers analyze a candidate’s key skills and abilities through techniques like job auditions to hire the best talent.

[Read more: How Skills-Based Hiring Can Transform Your Organization]

While skills-based hiring focuses on finding the best candidate for the job, it’s not the only benefit of this modern recruitment approach. It also widens the talent pool, giving organizations access to more candidates — which is extremely beneficial in a global candidate shortage. 

[Read more: How a Skills-Based Recruitment Strategy Can Help You Navigate the Skills Shortage

A traditional vs. skills-based approach to hiring for retail 

College degrees have long dictated a candidate’s supposed suitability for a role in the eyes of hirers, but those days are behind us. Now, there’s a way to assess if candidates can do the job before they start. 

Here’s a breakdown of how skills-based hiring differs from traditional hiring methods in retail. 

Traditional hiring process in retail 

Traditionally, the recruitment process for a retail role would look something like this:

1. Post a job listing

An organization or recruiter will create a job post with a list of requirements and responsibilities — often based on assumed knowledge, former experience, and educational requirements. 

2. Screen candidates

The recruiter or organization will use screening tools and tactics to look for keywords on a candidate’s application to assess if the candidate meets the requirements (i.e., by evaluating former experience, qualifications, or education as a proxy for talent). Or, they may manually review all applications. 

While this process has proven somewhat effective in the past, the shift towards skills-based hiring has shown organizations where there may be severe gaps in the traditional recruitment process. For example, conventional methods focus solely on archaic requirements that don’t necessarily predict performance (i.e., a bachelor’s degree or experience), nor do they analyze what a successful candidate truly encompasses. 

3. Interview talent

Once a shortlist of candidates has been created from the initial screening, organizations will generally follow-up with an interview to ask further questions before deciding on a candidate. Often, traditional hiring practices lean on an unstructured interview process, which contains bias, lacks consistency, and isn’t a fair measure of a candidate’s capabilities.

For instance, let’s review the following job listing on allretailjobs.com

  • Based on the required duties, there is no real need for the ideal candidate to have 1-2 years of retail cashier, sales or cash-handling experience, as these skills can be learned in less time and through alternative avenues.
  • The duties listed don’t analyze the skills needed to succeed — i.e., customer service, strong communication, sales skills, and attention to detail. Thus, there’s no simple way to determine if the candidate can meet these expectations. 
A traditional job description
Many traditional job descriptions, like this one found on allretailjobs.com, focus on unnecessary requirements that don’t adequately sell the skills required for a candidate to succeed in the role

Skills-based hiring process in retail

Unlike traditional hiring methods, a skills-based approach seeks to deeply understand the soft and hard skills necessary for a candidate to succeed in the role. This level of insight means hiring managers can gain a strong understanding of what the ideal candidate looks like and measures of success, and candidates have a realistic job preview of the expectations. 

For example, critical retail skills might include empathy, positivity, strong listening skills, resilience, the ability to work under pressure, willingness to learn, problem-solving, and so forth. These skills become the foundation of understanding the requirements for the role. 

[Read more: 12 Important Customer Service Skills in Retail and How to Teach Them To Your Team]

A skills-based hiring approach looks like this:

1. Build the ideal candidate profile

A hiring manager will create an ideal candidate profile by considering important personality traits, preferred hard skills and soft skills, nice to have attributes and skills, success traits, and career goals. 

Having a clear understanding of what the ideal candidate looks like will help guide the rest of the process. 

2. Craft a skills-based job description

From this list, they’ll create a retail sales job description that prioritizes how these skills will come into play. Additionally, they will reassess the requirements to ensure they’re fundamental to the role’s success, eliminating any that may unnecessarily deter candidates.  

3. Screen in candidates

If the organization uses a skills-based testing platform, it will help to simplify the steps to follow. For example, Vervoe’s AI-powered platform automates hiring by running candidates through a skills assessment and auto-grading responses to rank candidates. 

Organizations can opt for a custom built Vervoe assessment tailored to their unique business requirements or select from our pre-designed assessment library — including the retail sales assistant skills assessment  and CS simulator — to give candidates a realistic job preview. All Vervoe assessment options can be customized to meet the exact needs of the retail organization. 

From this, the organization has an objective understanding of which candidates can best succeed in the role and make their hiring decisions accordingly. Running candidates through a skills-based test allows them to be judged based on their proven abilities and skills rather than factors that don’t influence their capabilities.  

4. Interview top performers

To ensure time and money isn’t spent interviewing unsuitable candidates, this phase of the hiring process is placed last, once a shortlist of candidates has been determined. 

Upon completing a skills assessment, candidates’ responses are AI-graded by Vervoe to rank candidates according to how their skills align with the role’s requirements. Automating this process drastically reduces the time spent manually grading and shortlisting candidates, and removes bias by solely looking at a candidate’s skills. 

Once there’s a shortlist of top candidates based on Vervoe’s AI ranking, organizations can focus on interviewing only the candidates they know can succeed in the role. However, based on the accuracy of Vervoe’s AI-grading, candidates can be hired on the spot with confidence, skipping the interview process altogether.

[Read more: How to Hire A Retail Sales Associate]

A skills-based job description
An example of a skills-based job post that emphasizes the soft and hard skills necessary for the role

[Read more: Retail Associate Job Description]

4 ways to use skills testing for retail recruitment 

Skills-based hiring offers many benefits for retail organizations. It gives employers access to a broader talent pool by emphasizing skills over experience and requirements. Additionally, it helps source the most suitable candidate for the role, improves employee retention, and reduces recruitment costs and time-to-hire by automating the process. 

If traditional hiring practices no longer serve your needs, here are four ways to use skills-based hiring practices for retail 

1. Review your existing job descriptions

According to LinkedIn insights, there are 14% more applicants per view on job descriptions that focus on responsibilities rather than requirements

This means your job posting should lead with a skills-first approach. 

Start by analyzing your existing descriptions to clarify where you’re missing opportunities to sell the role to the right person accurately. 

When auditing your existing descriptions, ensure you check the following boxes: 

1. Ensure all criteria are necessary

Review your list of requirements; if any of them aren’t essential to the role’s success, remove them. Don’t be afraid to be ruthless with this process, as fewer barriers mean more candidates. 

2. Give a realistic depiction of the role

If your current job description doesn’t give job seekers a clear portrayal of what a day in the life of the role will look like, it likely means you don’t have a clear enough understanding of how the role will function. Look at why the job was created and create a breakdown. 

3. Articulate the skills required

Work backward to analyze the role to clearly define the soft and hard skills that are important for the role’s success. Be sure to articulate how these skills fit into the role. 

4. Define what success looks like

Identify why the role exists and what you need them to achieve to create quantitative KPIs and actionable results. 

5. Utilize helpful resources

If you’re unfamiliar with writing skills-based job descriptions, use Vervoe’s free job description template resource to help guide you. 

While skills will vary amongst positions and companies, consider the following hard and soft retail skills examples from Light Speed

Common soft and hard skills required for retail roles
An example of the hard and soft skills required in many retail positions, according to Light Speed

2. Implement skills-based testing early in the hiring funnel

In retail recruitment, most organizations prioritize the screening process to determine which candidates are suitable for the role. But, usually this results in screening out candidates — whereby a high volume of people are eliminated early on in the hiring process due to missing requirements on their resume, most of which don’t influence their success in the role.  

With the current candidate short market, a skills-based approach to hiring retail workers allows organizations to dip their toes into a larger candidate pool by giving more job seekers a chance to prove their capabilities and experience a realistic job preview. Especially when skills testing is introduced early in the recruitment process. 

Access to a larger candidate pool means organizations have a better chance of finding the right fit for the role, on both ends. This is particularly important given the average turnover rate in the retail industry is over 60%, according to the National Retail Federation. 

According to Retail Wire, retail’s high turnover rate exists for many reasons, including bad hires, lack of training, monotonous tasks, a lack of incentive, heightened competition, and more. 

Placing your skills-based assessments at the top of the recruitment funnel is beneficial for three primary reasons:

  1. It removes most of the manual work required by hiring managers to sift through resumes to screen in or out candidates. 
  2. It reduces the time spent interviewing potentially unsuitable candidates. 
  3. It removes bias from the equation by judging candidates on their skills and nothing else. 

Top-of-funnel skills testing allows organizations to consolidate several steps in their hiring process — including phone screening and multiple-stage interviews. As a result, this creates a streamlined and accurate recruitment process and a fairer and more efficient experience for candidates. 

3. Adopt a structured interview approach

A structured interview process allows an organization to confirm an applicant has the soft and hard skills required to succeed. Think of it as the final part of the skill verification process, enabling you to gain greater insight into their skills assessment results. 

Structured interviews vs unstructured interviews in retail hiring
According to Fit Small Business, structured interviews help interviewers stay on topic, objectively compare candidate responses, avoid prohibited questions, and maintain consistency

When implementing a structured interview process, Fit Small Business outlines a few critical steps to include:

1. Pre-plan your questions 

Attend the interview with a list of thought-through questions that will determine a candidate’s suitability for the role — including skills, duties, and cultural fit.

2. Keep it consistent

To ensure an unbiased process for all candidates, ask the same questions to all applicants in the same order. It’s also important to plan how much time you can allocate to each question to ensure you don’t run over. For example, if you have a 30-minute interview time slot, plan five questions and allow roughly five minutes per question. 

3. Encourage questions

This is beneficial for candidates and helps you gauge how much research they’ve done on your organization. Be sure to factor in five to ten minutes for this. 

4. Use a scorecard

Using a rating system to evaluate a candidate’s performance helps to keep the process free of bias and subjectivity. Write down a list of questions that will help you assess if a candidate is a good fit for the role, and include three columns next to each question for bad, average, and good that you can place a tick next to. Questions may range from assessing their interview preparation to confirming a candidate’s skills alignment and interpersonal skills.  

4 ways to adopt skills-based hiring in retail 1
Example structured interview questions that focus on assessing a candidate’s skills and cultural alignment, according to Fit Small Business

4. Use a quality skills testing platform like Vervoe 

The simple truth: not all AI-powered skills testing platforms are created equal. I mean, it just takes one glance at Vervoe’s skills assessment tool comparison to understand exactly how much they can differ. 

When looking for a quality skills testing platform, make sure they tick the following boxes.

How to choose a quality skills testing platform
Important features to look out for when comparing skills-testing platforms, like Vervoe

Here’s a simplified breakdown of how Vervoe’s AI-graded skills testing platform can be used for retail recruitment:

1. Vervoe offers retail-specific skills testing

Vervoe’s custom built assessments, customer service simulator, and pre-designed assessment library allows retail organizations to test candidates relevant skills, as they relate to the role’s requirements. This includes incorporating a range of question types — text, audio, video, and multiple choice etc. — that mimic the kinds of tasks required within the role. This helps organizations better understand a candidate’s suitability, while giving candidates a realistic job preview. 

2. Vervoe uses market-leading AI to rank candidates

Vervoe uses machine learning to screen and rank candidates’ assessments based on the organization’s preferences. Its algorithm can assess 10,000 candidates in the same amount of time it takes a recruiter to review just one application manually. This alone allows organizations to review a large number of applicants through an efficient, fair, and accurate process, ensuring the best candidate for the role is found. 

Vervoe’s skills testing platform helps to reduce turnover by giving candidates an accurate feel for the role. Secondly, it gives organizations access to a more diverse talent pool by removing bias from the process, which is proven to have a positive impact on a company’s bottom line. Lastly, it allows organizations to find the best candidate for the role in an efficient and accurate manner, leaving little room for error. 

Final thoughts

The retail industry has been heavily hit by the pandemic, resulting in an inability to source skilled employees and retain existing ones. 

The current candidate short market has proven that traditional hiring practices no longer cut it — particularly when trying to source candidates who can successfully perform the role from a shrinking talent pool.

Skills-based hiring is a solution to this. 

It gives organizations access to a wider talent pool by placing an emphasis on skills, and it ensures organizations find the most suitable candidate for the role by giving applicants a realistic job preview. Additionally, it improves employee retention as candidate’s are clearer on the expectations before accepting the job offer, and it reduces recruitment costs and time-to-hire by automating skills testing and ranking through artificial intelligence. 

Adopting skills-based practices in retail recruitment is achievable for organizations of all sizes. 

And it can be achieved in four steps — well-written job descriptions that focus on skills and eliminate all unnecessary requirements. Top-of-funnel skills testing to ensure no great candidates are missed. Structured interviews that delve into a candidate’s skills and cultural fit. And a quality skills testing platform, such as Vervoe, to make the retail hiring process more efficient, accurate, and fair. To see how Vervoe can help your retail organization find top-tier candidates, book a demo today.

Bec Eaton

Bec Eaton

Bec Eaton is a Copywriter with over eight years of experience in writing compelling, brand-aligned, and solution-driven copy across a range of industries. Bec joined the Vervoe team in 2022, and currently works as their Content Marketing Specialist.

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