Updated: Sep 15
Hiring talent is difficult, especially in such a competitive pool of job seekers. Candidates with an endless LinkedIn profile detailing how they finished two degrees, are pursuing their masters and have just started their own side hustle seem commonplace nowadays. However, most jobs do not require valedictorians as hires. What’s important is that they can get the job done. As such, strictly traditional hiring approaches are quickly fading in the workplace today, especially with the advent of a technique called skills-based hiring.
What is Skills Based Hiring?
Skills-based hiring is exactly what it sounds like – hiring employees based on the skills they demonstrably possess. This does not mean excluding degree holders from the search pool or lowering a company’s industry standards for job seekers. Rather, it entails expanding the talent pool of candidates to people who may have deviated from mainstream education routes.
Why skills-based hiring might be beneficial to the company
The allure of skills-based hiring is a simple and compelling principle. An intimate knowledge of an industry and the relevant skill sets are often more useful to a company than a person’s background. As such, job postings may be phrased in a way that opens up the search for hires to candidates familiar with particular softwares, technology and industry knowledge.
With more candidates, the hiring process is also sped up, which allows companies and industries to evolve faster. An adaptable and up-to-date workforce is especially crucial to a company’s success in today’s rapidly changing world.
Apart from the practical reasons of lowering cost and making it easier to find suitable talent, skills-based hiring is more equitable in that it prioritises the candidates’ skills over their socio-economic background, effectively giving a chance to people from less privileged backgrounds to succeed in the workplace. Not everyone can afford a name-brand education or to stay in school until 25 years if they have an unstable family dynamic or have faced significant life trauma.
Using skills-based hiring to level the playing field not only reflects well on a company’s values, but increases the likelihood of diversity in the workplace. A 2018 article illustrated how businesses with more diverse teams have been shown to tangibly perform better than homogenous businesses. Diversity is a valuable asset, whether in terms of race, religion, gender, cultural diversity or in the case of skills-hiring, varied educational background and life-experience. If everyone can bring something different to the table, the work becomes more robust. It makes sense then, that skills-based hiring improves work quality.
Are businesses moving towards skills-based hiring though?
In recent months, we have seen a rise in unemployment rates. As of June 2020, we reached an unemployment rate of 2.9% (according to the latest MOM statistics), the highest it has been since 2010. What’s worth noting though, is that degree-holders are not saved from this trend. An