Unleashing the power of skills: how skills-based hiring changes your recruitment game

Why skills-based recruitment reaches untapped talent pools filled with outstanding candidates.

For businesses that are looking to grow, finding highly skilled employees is always a crucial factor. This is especially true in the digital sector where roles are constantly evolving alongside the market. A tried-and-tested recruitment approach, skills-based hiring, is already well-established across APAC markets, and is becoming more popular in AMEA markets for this very reason. It allows companies to identify and attract talented but too frequently over-looked individuals who have the necessary skills to drive digital products, projects, and strategies forward. Here’s why this approach is effective.

A recruitment strategy focused on skills-based hiring involves assessing a candidate’s abilities rather than their educational background or credentials.

Screening and filtering candidates is no longer the key role of recruitment. Instead, it is about broadening and diversifying talent pools to source and secure competent, capable talent. Skills-based searches are an incredible way of doing that and come with a whole range of business benefits as a result. 

Why is skills-based recruitment so important for your hiring?

Skills-based hiring, and evaluating a candidates competency based on skills not past experience isn’t a new concept, despite it recently trending in the news and on LinkedIn.

Behaviour based interviewing (BBI) and competency-based interviewing (CBI) was first popularised in the 1980’s. Global markets have incorporated the approach to different degrees, for example in Australia and New Zealand this approach is widespread.

It is an approach that works particularly well with entry-level and mid-career positions that don’t require specialised training or credentials. But the approach can also be applied across your whole recruitment process to broaden and diversify the talent pool. Here’s our step-by-step guide to getting started.

Recent market insights highlight the reason skills-based hiring is still at the top of the recruitment agenda:  

• 40% of those hiring on LinkedIn globally used skills to fill open roles in 2022, up 20% year-over-year. 
   
• Most employers (81%) believe they should prioritize skills over degrees, but 52% are still hiring from degree programs to manage perceived risk in recruitment. 
   
• Gorilla in their 2022 State of Skills-based hiring survey saw 72.1% of people hired via skills-based hiring report being happy in their role. 
   
• LinkedIn data published by their Economic Graph team shows that skills-based hiring increases candidate pools by 22% on average 

In a competitive job market, hiring managers are competing for talent that has more choice and control in the hiring process than ever. If hiring managers list qualifications and grade minimums in job specifications for a role, that can exclude talented candidates from other industries, markets, socioeconomic backgrounds, and countries.

By being clear on the key skills and competencies when you are hiring you are ensuring a new hire can perform the role, the key attributes are delivered, and allowing for growth in the areas that are not as essential or so frequently used. 

Ready to start skills-first hiring? Here’s how to approach it!

Why skills-based hiring succeeds in a tight job market  

Past experience and qualifications aren’t necessarily proof a candidate has the capability to take on the role successfully, or that they’ll add value.  Often jobs require many more skills than those that come with whatever degree, certification or required years of experience.

Skills-based hiring, while not a new concept, is seeing a new burst of interest given the tight job market, particularly for tech talent, with employers competing to source and acquire the skills they need to digitalise, transform and develop. 

Here are some of the reasons skills-based hiring is such a successful recruitment strategy in today’s market conditions: 

Increasing your talent pool

Such a competitive job market means there’s a talent shortage. That shortage has reached a 16-year high, with 75% of companies reporting difficulty filling open positions.

We’ve see first-hand the increasing need for talent for jobs of tomorrow – roles that are crucial to our economies and societies. Including, for example, the demand for workers with digital and green skills, which will significantly surpass supply in the next 5 years. 

There is more to a ‘good employee’ than just their technical skillset, particularly when factoring in career progression which is why competency modelling is so important. The McKinsey Global Institute looked at the skills that employees will need in the future and identified 56 foundational skills, 45 of which were human skills.  Skills like as empathy, creativity, adaptability, and leadership can be harder to evaluate than expertise in Python or JavaScript.  

Lifting employment barriers and expanding your talent pool can be achieved with skills-based assessments, behaviour-based interview structures, and inclusive job advertisements. Here’s our step-by-step guide to implementing a skills-first hiring strategy.

Encouraging a more diverse talent pool

Skills-first hiring also diversifies your candidate pool and reduces bias. Historically marginalised groups are less likely to have a college degree and face more discrimination from certain industries. So, screening based on qualifications or experience working for recognised industry leaders inadvertently perpetuates inequality and lack of opportunity.  

This fact has been recognised by many seeking talent – and the number of job postings on LinkedIn that don’t require a four-year degree has risen from 15% to 20% year-over-year, a 33% increase. 

LinkedIn data suggests that skills-first hiring also encourages more women to apply to jobs they may not have otherwise applied due to a higher self-qualification bar. A diverse, skilled workforce benefits your business – more representation helps build inclusivity and brings new perspectives and ideas into your team, and prevents ‘group think’ while increasing creativity and innovation. 

Improving your employee retention

Assessing learning agility becomes critical for any role today. It is becoming more important for any business to be able to assess someone’s ability to keep learning and adapt to new concepts, especially in digitally focussed business structures where the pace of change is so rapid. 

At Salt we define recruitment as finding the right job for the person and the right person for the job. When a candidate’s skills match the role’s requirements, they feel happier in post, and feel they belong and add value to your organisation. When they’re happy and feel they belong, they’re less likely to leave! 

Identifying transferable skills and skill gaps for your workforce as a whole, and from the beginning of their employment, will help you create an employee development plan to help staff progress and one that benefits everyone. Companies that promote and excel at internal mobility retain employees for an average of 5.4 years, nearly twice as long as companies that struggle with it. 

Ready to start skills-first hiring? Here’s how to approach it!