The labor market isn’t what it was a decade ago. Today, traditional recruitment processes, like resume scanning and experience-based hiring, aren’t as effective for gauging a candidate’s fit for a position. In fact, some of these practices can be considered unreliable for candidate assessment.
As a recruiter, you might notice that fewer of your candidates have many years of experience in their respective fields. However, some of these candidates have the relevant skills to excel in their roles. So, how do you tell who is fit and who isn’t? Well, that’s what skill-based hiring is for.
In this article, we will explore skills-based hiring as a tool to transform your company’s workforce and how you can implement it.
What is skills-based hiring?
Skills-based hiring is a talent acquisition approach where companies recruit candidates based on evidence of their skills. In other words, rather than focusing on information about their experience, the skills-based hiring approach lets the candidates prove their job fit using skills assessments.
While many companies are moving away from traditional degree requirements, with 33% eliminating them for various roles, implementing true skills-based hiring remains a challenge. This shift is particularly noticeable in sectors like financial services, technology, and business process outsourcing (BPO), where roles ranging from customer service representatives and data analysts to entry-level software developers are increasingly being filled based on demonstrated skills rather than academic credentials.
However, a 2024 Burning Glass Institute study found that only 1 in 700 new hires resulted from comprehensive skills-based recruitment processes, indicating a significant gap between companies’ intentions to reform hiring and their actual implementation of effective skills assessment methods.
One common implementation challenge is not knowing when to integrate skills assessments into your hiring process. Ideally, you can integrate skills-based hiring using skills evaluation at various stages of your hiring funnel. However, each stage yields a different outcome. For example:
1. At the top of the recruitment funnel: Companies that use skill tests at the top of the recruitment funnel integrate these evaluation methods around the application period. This helps them screen the applicants, reducing the number of candidates that enter the recruitment process and increasing the quality of the applicants for that role.
2. Midway through the recruitment funnel: For companies that use skills-based hiring approaches in the middle of the hiring process, the primary focus is to evaluate technical skills and overall job fit. The result of introducing skills-based hiring at this stage is an understanding of the candidate’s skills and how well they can apply their knowledge to solve problems.
3. At the end of the recruitment funnel: Using a skills-based hiring technique in the final stages of your recruitment funnel involves applying these evaluation methods before making your final decision. For example, you can use them before the interview process. This lets the company vet the candidate’s skills and make informed decisions based on the assessment results.
One important feature of skills-based recruitment is that you can implement it multiple times in your hiring. For example, you can apply it both at the beginning of your hiring and at the end or only at the end, depending on your hiring needs and goals.
Overall, skills-based hiring goes beyond simply dropping degree requirements for a role. It involves adopting skill assessments and integrating them at the perfect time to align with recruitment goals and yield the expected results. It also requires you to apply various skill-based hiring components across the stages of your recruitment so you can make better hiring decisions.
Different components of skills-based hiring
The skills-based hiring approach comprises key components, each unique to a different stage of recruitment. These components help you ensure that your entire hiring process is skills-focused, contributing to helping you find the best candidates for the job. Below are the different components of skills-based hiring:
- Skills-based job descriptions: In a skills-focused hiring model, skills-based job descriptions shift from educational qualifications and experience requirements to the specific capabilities needed for the role.
For example, when crafting your job description for a marketing role, after introducing your company and the position, you can add the skill requirements. These could include a proven ability to develop and manage campaigns, A/B testing, and proficiency in Google Analytics.
- Skills-based screening: This skills-based hiring component involves evaluating candidates for the skills in the job description. You can do this using pre-employment tests, job simulations, and practical assessments that assess technical skills.
While assessing your candidates, it is vital that your evaluation is valid and compliant with screening regulations.
- Skills-based interviews: In addition to using a well-structured interview, the skills-based hiring approach requires you to focus your interview questions on the candidate’s skills.
To do this, during the interviews, use situation-based interview questions to assess how well the candidate can respond in various scenes and solve problems using their skills. You can also use technical questions to assess their proficiency in various technical skills. For example, you can use Kafka specific questions to evaluate data streaming and processing skills.
[Read more: Recruitment skills]
How to implement skills-based hiring in your company
Implementing a skills-first hiring approach in your recruitment involves a shift from looking out for markers like degrees to focusing on what the candidate can actually do. This way, you don’t just broaden your talent pool, but you’re sure to hire individuals who are adequately equipped to excel in the role.
In this section, we will explore how to implement the skills-based hiring approach to elevate your workforce:
1. Identify skill gaps within your organization
Elevating your workforce demands that you first understand its current situation. One of the best ways to do this is by identifying skill gaps within your organization that may be hindering growth and performance.
To do this, perform an in-depth skills gap analysis to understand where your employees’ strengths and weaknesses lie. You can use team audits, competency assessments, and KPI evaluations to identify any loopholes within the team. Then, use this information to determine the skills that would be necessary for your company to achieve its future goals. Following this, you can point out the skills that are lacking and address them immediately.
2. Draft a job description based on your goals
Traditional job descriptions often focus on qualifications like educational background, job titles, and years of experience. However, with over 64% of candidates exaggerating or falsifying information on their resumes, these unproven metrics are unreliable. So, instead of using these metrics, you should clearly state the skills required for the role.
Using the insights from your skills gap analysis, you can write a compelling job description that focuses on these capabilities. For example, instead of writing “5 years of experience in digital marketing” as a requirement, you can list skills like expertise in content creation and media strategy.
3. Design and deploy an effective application process
In skills-based hiring, the application process doesn’t solely focus on who the candidate is or why they want to join your company. Rather, it uses specially designed questions to give you an idea of their core skills and how they can be useful to your business.
To design a skills-focused application, first, ensure that the process is simplified to boost the candidates’ experience. Then, use practical questions to emphasize the skills that are important to the role. For example, if you’re hiring a social media manager, you can add a question asking how they would work with a digital marketer to implement a content strategy, even if they had varying views.
4. Screen applicants with skills tests
Skills testing is a powerful tool for objectively evaluating candidates’ proficiency in specific areas relevant to the role. It allows you to gauge their technical, soft, and hard skills at any point in your hiring funnel. It also promotes fairness and significantly reduces bias, enabling you to hire solely based on candidate proficiency and merit.
When screening applicants, you can use online skills assessments that use job simulations to mirror the real-world challenges the candidate will face in the role. These tests should be designed to measure key competencies, such as coding skills for developers or writing skills for content creators. It’s also important to use a testing platform like Vervoe, which has numerous tests and customization options so you can adjust your assessment to suit your standards.
5. Apply skills-based structured interviews
Structured interviews provide an opportunity to assess how candidates apply their skills in real-world situations. They also let you assess communication, listening, and attention to detail. For a skills-based hiring process, interviews should focus on specific competencies and be consistent across all candidates to ensure fairness.
For instance, your interviews can start with a brief introduction to the company and the recruiter. Then, you can request the candidates to introduce themselves as well. Following this, you can ask questions about the skills they have and why they are vital to the role. You can also use situational interview questions to evaluate their ability to apply these skills to tackle problems common to the role.
6. Follow up on candidates
Finally, once you’ve assessed the candidates and conducted the interviews, you should follow up with them. In doing so, you can gain insights into how the application-interview stages went and identify areas that need improvement.
In the follow-up stage, you can also share information about the next steps in your recruitment funnel. This keeps the candidates engaged and interested in the position at your company.
Benefits of using skills-based hiring
By focusing on what candidates can do rather than where they’ve worked, skills-based hiring can help you find the right talent, boost organizational productivity, and build stronger teams.
Here are more reasons you should make the switch :
1. It widens your talent pool
By focusing on skills instead of degrees or traditional experience, you can reach a broader and more diverse pool of candidates. These include self-taught individuals, freshly graduated candidates, and those from non-traditional backgrounds.
2. It boosts employee retention
Hiring based on skills and role alignment leads to higher job satisfaction, motivation, and engagement. In turn, this prevents new hires from resigning due to unmet expectations, such as the job requiring more skills than they possess.
3. It reduces hiring bias
Objective assessments, such as skill tests and structured interviews, provide a level ground for evaluating candidates’ skills. As such, it encourages a fairer hiring process where each candidate only succeeds if they have the necessary skills to pass the assessment. So, you can make better hiring decisions based on accurate assessment results.
Step up your skills-based recruitment with Vervoe
Hiring with a skills-first approach undoubtedly has its perks, but not doing it correctly can have negative effects like reduced workforce productivity. At first glance, you might think that all you need to do to implement this hiring strategy is to drop degree requirements for various posts in your company. However, this isn’t entirely true. You must also integrate skills-focused strategies like skills testing.
The good news is that with Vervoe, you don’t have to search too hard for the perfect skill assessment platform to optimize your hiring. Our assessment library is equipped with over 300 tests that evaluate skills across various fields. With added features like job simulations, situation-based questions, and personalized grading, you won’t have to worry about making a wrong hire again. Register for a free demo today to begin testing and hiring the Vervoe way!
Frequently Asked Questions (FAQs)
1. What are the benefits of a skills-based hiring approach?
A skills-based hiring approach helps companies identify talent from diverse backgrounds, fostering inclusivity and expanding the talent pool. It also supports better job performance by ensuring that candidates possess the specific skills required for the role, leading to increased productivity and employee retention.
2. How do I implement a skills-first approach?
You can implement a skills-first approach by identifying and assessing the specific skills required for each role. Also, skills assessments and testing should be used during the hiring process to ensure candidates possess the necessary competencies. Additionally, always ensure that your entire hiring process, from crafting a job description to deploying applications, prioritizes the skills required for the role.
3. What tools can help with skills-based hiring?
Tools that can help with skills-based hiring include skills assessment platforms like Vervoe and Applicant Tracking Systems (ATS) with skill-tagging capabilities, such as Greenhouse.
