What is skills-based hiring and how to implement it for your organization

Hiring the right people for open roles in your organization is far from being an exact science. You want employees who can perform their jobs to a high standard and integrate easily into the staff, but finding someone with those requirements can be challenging.

Recruiters have traditionally relied on various elements within a candidate's background, such as their educational milestones and job history, to determine whether they can fill the role they applied for. However, these factors aren't always reliable, and staying competitive may require more accurate ways of determining whether a candidate has the skills to succeed within your organization.

What is skill-based hiring?

Skills-based hiring is a recruitment practice that aims to evaluate job candidates by considering the skills they need to be successful in a specific position rather than other criteria such as education and experience. While relevant education and job experience in similar roles can indicate a candidate is ideal for the role, this approach has many potential downsides. You may hire the wrong candidate while missing out on considering the right one.

One of the best examples of how traditional hiring practices may eliminate qualified candidates from the talent pool is the age-old requirement for a college degree. For years, many professions were out of reach for anyone without at least a bachelor's degree. While a college education helps employees gain the hard and soft skills required for professional success, it doesn't guarantee it. This requirement also limits opportunities for professionals who may have the skills to be successful but didn't go to college for reasons such as high costs and lack of opportunity.

Why should you implement skills-based hiring in your organization?

Skills-based hiring can be challenging to implement, but the results often justify the effort. There are numerous benefits to skills-based hiring.

Accessing a wider talent pool

Traditional hiring approaches may let potentially excellent employees slip beneath your radar. You may miss out on hiring someone for the following reasons:

A candidate is highly qualified for the role you're looking to fill but didn't have the opportunity to attend college. They acquired their skills through experience and hard work.
A self-taught candidate researched and practiced the skills needed for the role on their own.
A candidate has all the right skills to succeed in the role, but your applicant tracking software doesn't rate their resume highly.

Reducing bias by relying more on hard data

Hiring bias is a significant concern for recruiters and employers. Traditional screening methods can cause unconscious bias or exclude those from marginalized groups who didn't have the opportunity to receive the necessary education for a specific role. Skills-based candidate assessments can help eliminate those issues by allowing those from disadvantaged groups to prove themselves solely on merit. As your organization gains a reputation for giving opportunities to people of all backgrounds, candidates who may not have applied before may be more likely to express interest in working for you.

Boosting employee retention rates

Matching candidate skills with job requirements may lead to more fulfilled employees. Staff members who are good at what they do and don't have to fulfill tasks beyond their skill level are more likely to experience happiness in their role and be loyal to your organization. Knowing your employees' skill levels can also help you identify areas where they can improve, helping them progress throughout their careers.

"While relevant education and job experience in similar roles can indicate a candidate is ideal for the role, this approach has many potential downsides. You may hire the wrong candidate while missing out on considering the right one."

How to implement skills-based hiring for your organization

Like most things that matter in life and business, implementing skills-based hiring is easier said than done. However, the results are worth it, as you'll have a better-qualified workforce. There are several things you can do to start implementing skills-based hiring in your organization.

Start small

Changing your recruitment process to implement skills-based hiring without sufficient planning may disrupt your organization's activity. You and your team need time to determine how to screen candidates based on the necessary skills for each role. Starting small and working toward a company-wide implementation can ensure you lay the proper groundwork. One of the best ways to begin is by identifying the roles with the highest turnover. Besides being relatively risk-free, this will also give you time to determine the reasons for the high turnover, as you may be prioritizing the wrong skills.

You can also identify the roles that are easy to assess based on skills. There's a reason there are tons of high-paying IT roles that don't require college degrees. The metrics defining employee success are easier to quantify than for other roles, making testing candidates and assessing employees simpler.

Prioritize skills in your job descriptions

Your job description may include elements that can discourage potentially qualified candidates from applying by mentioning a college degree or a certain number of years of experience in relevant positions. While some roles require these qualifications, try to identify those that don't and eliminate them from your job ads. Doing so may help you gain access to many excellent candidates who would have otherwise avoided applying for the role because of thinking they don't have the necessary qualifications. List the most essential skills for the role instead.

Get everyone on board

Shifting toward a skills-based approach to hiring is a company-wide effort. Knowing which skills are necessary to succeed in every role within your organization can be challenging, especially if there are numerous positions. Department managers can help you identify the most critical attributes for each position. Discussions with the top performers in each role can help you determine what makes them good at their jobs.

Implement skills-based candidate screening processes

Once you know which skills are highly relevant for each of your open positions, you can start developing and implementing relevant candidate screening practices and processes. If you use candidate screening software, program it to prioritize skills over job experience and educational milestones.

Develop a skills-centric interview process

One of the most important parts of a skills-based hiring process is conducting effective interviews. You want to use this time with potential candidates to ask questions that assess their relevant skills to determine whether they have what it takes to be successful in the role they applied for. You can implement this in the initial phone interview and when meeting the selected candidates in person.

The questions you ask should aim to assess both hard skills, which relate directly to the role, and soft skills, which are universally valuable human qualities. While the hard skills differ from one position to another, soft skills are transferable, so you can ask candidates applying for different roles similar questions. Some examples of interview questions that assess soft skills include the following:

Can you give me an example of a situation where you displayed leadership abilities?
Can you talk about a time when you encountered a major challenge and how you overcame it?
Have you ever had to handle a conflict? How did you do it?
Can you mention a situation at a previous workplace where you had new job responsibilities? How did you handle it?
Talk about a situation where you had to make quick decisions.

Hiring candidates based on the skills they need for the role can help improve the quality of your workforce. While it may be challenging to implement initially, it can help your organization gain an edge over your competition.