Examining Skills-based Hiring

This approach has many benefits for TA leaders but challenges too.

By Larry Basinait

Many organizations are exploring the implementation of skills-based hiring. The goal is that by assessing candidates based on their abilities and potential rather than their degrees and job histories, skills-based hiring can help relieve talent shortages, increase diversity, and strengthen internal mobility in the workplace.

While the potential for this approach is high, organizations face challenges implementing it. What are the barriers that talent acquisition leaders face in moving the organization toward skills-based hiring? How will technology have to change to fully support this initiative? A new HRO Today research report, sponsored by Morgan McKinley, examines these areas and others related to skills-based hiring.

There are seven key findings from this study.

1. Skills-based hiring will become even more important over the next two years. Today, 70% of senior TA leaders consider it important and that percentage grows to 77% in two years.
2. The greatest benefit of skills-based hiring for organizations is a more highly skilled workforce, as indicated by more than two-thirds (69%) of TA leaders in this study. A broader talent pool was specified by 44%, the second most anticipated benefit.
3. The most prevalent challenge TA leaders face with skills-based hiring is the lack of hiring manager confidence or experience conducting skills-based interviews. This is reported by nearly three-quarters (72%) of study respondents.
4. The most prevalent obstacle in moving towards skills-based hiring is changing the way organizations assess candidates, as indicated by nearly two-thirds (65%) of respondents. Addressing potential gaps in formal knowledge (63%) is also a major obstacle in moving towards skills-based hiring.
5. There is a wide array of areas where technology will need to be enhanced to better enable skills-based hiring. The area in most need of change is accurately measuring and verifying skills, according to nearly two-thirds (61%) of TA leaders.
6. Most (72%) feel it will be challenging to change HR’s own perceptions about the need for using education levels as a hiring criterion to fully embrace skills-based hiring.  Traditional hiring often emphasises degrees and prior job titles. Shifting to a skills-based approach requires significant changes, such as implementing pre-interview testing an d adopting structured interviews, which can be resource-intensive.
7. The importance of traditional secondary learning institutions has diminished.

• • Skills-based hiring is viewed as a better long-term solution to address an organisational skills gap than traditional colleges and universities. Over three-quarters (76%) agreed that skills-based hiring emphasises an individual’s competencies and practical abilities over formal educational credentials.
  • Candidate education and credentials are not as important in talent acquisition as they were ten years ago. While less than one-third (29%) agreed that they were as important, 43% disagreed, suggesting an overall decline in importance.

Click here to view the entire report.