Everything You Need to Know About Skills-Based Hiring

by Angela Griffiths

All companies want to have talented and skillful people as part of their team. However, some companies continue to use the same methods during the hiring process, even though it continuously evolves.

These companies must realize that change is needed when it comes to reaching out, attracting, and getting talented people to sign up for them. This is where the need for skills-based hiring comes in.

Yet, what exactly is skills-based hiring? Moreover, how is it different from the traditional hiring process, and what benefits does it have to offer your company and its potential employees?

Find out more about this new approach towards hiring and how you can implement it properly in this article.

What Skills-Based Hiring Is

The whole idea of skills-based hiring is easy enough to understand since it’s primarily about your targets. In this case, when you hire depending on a specific skill set, it means your hiring skills are focused on seeking particular competencies and skills from your candidates.

This means looking for the soft skills and hard skills that are considered relevant to your industry. It also means that your applicant’s educational and work backgrounds in the industry aren’t that crucial in this setup. What only matters is the potential and performance of the client.

Some examples of the basic skills a potential candidate should have are being proactive and self-accountable and having communication, interpersonal, collaboration, and critical thinking skills. After all, regardless of the position, these traits are essential.

The Difference Between Skills-Based Hiring and Degree-Based Hiring

So, how is skills-based hiring different from what’s already being done? In the past, most companies’ hiring skills concentrated on the profile of candidates instead of their abilities and performance.

That means employers would often just check their referrals, educational attainment, and achievements, among many other requirements. Then, the applicant who best fits these requirements was interviewed and offered the position.

For example, Harvard conducted a survey with 600 HR and business leaders as its participants. Approximately 60% of them haven’t considered applicants who did not finish a college degree, even though they were qualified for the position.

Unfortunately, degrees are not enough proof that applicants have the needed soft and hard skills for the position. So, adopting a skills-based hiring process can help your HR department improve how they filter who can apply and go through the interview.

How Skills-Based Hiring Is Making a Change in Recruiting People

The pandemic has caused a shift in many people’s hiring perspectives. After all, around 73% of the domestic workers in the US were negatively affected by it because of fewer working hours or losing their jobs in May 2020.

Moreover, this wasn’t just limited to domestic workers since it was estimated that the pandemic would cost more than 140 million people their jobs. These occurrences were pivotal in upskilling and reskilling employees.

That’s why LinkedIn, a business and employment hiring platform, introduced the Career Explorer tool in 2020. This tool maps a candidate’s skills and additional skills they can acquire to help them undergo a career transition. With this, people who lost their jobs can look for jobs based on their abilities.

This has opened many upskilling opportunities to workers and employers. For instance, people in the food industry now have more than 70% valuable skills than those in the customer service industry.

This concept is beneficial for employers and applicants. Employers can find people fast and save training and onboarding costs. Likewise, potential employees can transition to new jobs easily without worrying about their source of income.

This is the core of skills-based hiring; it concentrates on getting people for their skills and not their previous work experience. However, this does not mean that degree-based hiring is not significant anymore.

After all, many positions still require applicants to have a specific educational background, work experience, and formal certifications. In this case, skills-based hiring is ideal for jobs that require low and middle skills.

Benefits of Skills-Based Hiring

Now that you know the difference between degree-based and skills-based hiring, as well as how the latter is making a difference, let’s discuss the various benefits this approach offers to your company.

  • Meeting Talented People

You can try to imagine a highly skilled potential applicant checking out your job advertisement. When they’re about to apply, they see that one of the requirements indicated is a college degree.

So, they let go of the chance to apply to your company and move on to the next because they are not degree holders. Unfortunately, this can be a loss for your company because candidates like this can often improve your skill sets internally and bring your company more profits in the future.

However, they choose not to apply because they don’t qualify for the listed requirements. That’s why it is best to practice caution when it comes to this. You need to ensure that you’re not missing out on excellent talent because of such requirements.

  • Saving Money and Effort
Benefits of Skills-Based Hiring

In every five companies, there’s one with a recruitment process that lasts for more than two months. This can be a big problem and likely a waste of time if you’re that one company.

Aside from that, you can also lose a potential applicant and cancel out the efforts you’ve exerted so far for your business. Fortunately, you can avoid this if you adopt skills-based hiring for your company.

This will allow you to not only meet the most suitable candidates for the position but can also reduce the expenses your company needs to shell out just to find these applicants.

  • Making Employees Stay Longer

The experiences employees get from their workplace are the summation of their ideas, beliefs, and perspectives, and this starts from the time they work for a company.

As you know, this is closely related to a company’s retention rates. The foundation for having high retention rates is the strong bond you create with your people from the time they start working in the company.

In this case, utilizing a skills-based hiring approach has a significant effect on how they see your company from the time they start working there. This approach also allows them to have new colleagues with related knowledge and experience that they can share.

So, when they work together, they will likely bring about good results. It would also be best if you offered them opportunities to learn and grow, and with skills-based hiring, you can.

  • Promoting Diversity and Creating a More Inclusive Culture in the Workplace

Pew Research Center discovered some alarming workplace statistics. According to their studies done in 2017, a little more than 40% of women felt discriminated against in their workplace.

This indicates that implementing change in the workplace has become necessary, such as diversifying and making the office more inclusive. One of the ways to do this is through practicing skills-based hiring.

This is because heterogeneity in the workplace can be improved when the company concentrates more on its skills than other attributes.

With this approach, every employee will have the opportunity to learn more about their workmate from a completely different background. They can broaden their mindsets and perspectives by interacting with each other.

Ways to Practice Skills-Based Hiring

So, how can you apply skills-based hiring for your own company and enjoy the benefits this practice can offer?

  • Start Small

Businesses typically don’t introduce new products without conducting studies and tests on actual users. Therefore, the same idea can be applied to your hiring process. You don’t need to reformulate it entirely at once.

You can begin with positions with high turnover rates and take a long time to fill up. Then, you can determine the reason and try a new approach to your current process. You can also focus on the pain points and work on them.

Similarly, identifying a hiring need begins with knowing your people’s specific skills. You can determine this by doing an internal evaluation and knowing what competencies you currently lack.

However, make sure to be objective when you measure the significance of these competencies and decide whether they are needed in the long run.

Lastly, you can also try to overcome the potential challenges by having clear job descriptions and being active in distributing and scouting candidates.

  • Revisit Your Job Descriptions

Job descriptions help open the hiring process. Therefore, experts suggest revisiting your job descriptions and rewriting them. Doing so can help candidates concentrate on their abilities and achievements when applying for the position.

For example, LinkedIn mentioned that job descriptions showing responsibilities instead of requirements get more people to apply. One reason for this is that listing job responsibilities show candidates what their tasks would be if they get hired.

Aside from that, you can also think about what outcomes you want when you indicate the requirements. For instance, you can stress the performance indicators for the position or the results you want from potential employees.

When rewriting job descriptions, you should also remember to keep them brief and specific but engaging and informative. You don’t need to change everything when working on your hiring process.

What’s important is to keep it efficient and write it accurately. In this case, indicating what your job description precisely aims for is what’s essential.

However, there’s more to it than just indicating the primary skills and responsibilities expected from a candidate.

First, a particular job title is needed; a key phrase needs to define it. Moreover, it should also have a short introduction that explains your company’s value proposition to potential applicants.

Aside from that, having a list of primary everyday responsibilities and essential duties, as well as your company’s preferences and requirements, is also needed so that candidates know if they’re qualified for the role and know what kind of people they need. 

It’s also recommended to include a paragraph indicating what benefits and development programs potential employees can expect from you. If you want to have better chances in skills-based hiring, you can also provide the salary range.

After all, being completely transparent is vital in various ways. For instance, it can be easier to go through the salary negotiation.

You and the candidate can save a lot of time and effort by doing so, which can influence the hiring process, results, and the candidates’ perspective of your company, among many others.

  • Concentrate on Skills

This has been already mentioned, but you can still improve your skills-based evaluations and tests if you adopt a skills-based hiring approach. This is so you can check their soft and hard skills thoroughly.

With that said, it’s best to skip applicants’ work experience, feedback, and education. After all, the concept of skills-based hiring is to assess the skills related to the job without ignoring people who have no related job experience.

  • Understand How Skills-Based and Degree-Based Hiring Are Different

If you want to improve your hiring skills, it’s also best to know the difference between these two approaches. In this case, being more analytical about your hiring process can help.

That’s because even the most straightforward methods can become unstable once you utilize your new hiring approach. Still, many niches, such as the food and eCommerce industries, have benefited from skills-based hiring, even while experiencing many changes.

  • Practice Sustainability

One of the most critical components of skills-based hiring is practicing sustainability. Company leaders need to be active in ensuring that their employees keep and develop the skills required. After all, they play a crucial role in the growth of their employees.


Finally, you have a better understanding of skills-based hiring and how it can help make your company’s hiring skills better.

If you plan on shifting to this approach in your recruitment process, you have to understand its advantages and disadvantages. Skills-based hiring is best for low- and middle-skill jobs. Most of these jobs don’t require practical experience and advanced degrees.

With that said, all in all, skills-based hiring is a fantastic method that allows applicants and their abilities to excellent use. After all, not only will your recruitment process benefit from this approach but also your company as a whole. 

Related Posts

Leave a Comment

Heading Title

© 2022 Hirenest