The rise of skills-based hiring

Traditional hiring models no longer suffice. Talent shortages are driving new hiring practices. The shortage of qualified candidates is a constant challenge for employers. The job title and degree do not always reflect the ability of someone to perform the task. Modern hiring practices such as skills based hiring differ from traditional methods because they focus on what the candidate can do, rather than their CV. Skills-based hiring, which focuses on actual competencies of a candidate and not only what’s on their CV, is gaining traction. The skills-based approach is emerging as the modern way to acquire talent. The World Economic Forum forecasts future workforce trends and skills requirements, which highlights the importance of adapting recruitment strategies.

This approach to hiring based on skills allows companies to find talent they might have otherwise overlooked. It can also help them identify those with expertise gained through non-traditional routes or on-the job learning. Companies are recognizing that employees who possess the required skills are essential to remain competitive as the business environment is changing at an accelerated pace. Employers can hire people with the right skills and not just formal education. This will lead to better performance on the job, as well as a more flexible workforce.

Why is skills-based hiring gaining traction?

Organisations can now consider candidates with non-traditional backgrounds. This includes career changers, self taught professionals, or those who are returning to the workforce after a long break. Transferable skills can be especially useful in industries that are constantly changing and where adaptability is essential. This helps to attract top talent with diverse backgrounds. The ability to hire people without regard to their credentials is a great way for organisations.

Improved job performance

Performance often improves when people are hired based on their skills and not just their qualifications. Skills-based hiring can improve employee performance prediction. They are more confident, and can start right away. When you hire based on skill rather than experience, it ensures that the candidate is a better fit for the job. Hiring based on experience has its limitations as it can overlook candidates who have the right skills, but a non-traditional background. Employers should hire people based on their skills and potential.

High Retention Rates

Because they use their strengths every day, people who are hired for their skill set tend to be more motivated. It leads to a higher level of job satisfaction, and a lower rate of turnover. Hiring on the basis of potential can increase employee satisfaction. By focusing on soft skills and potential, new hires can be better.

1. Re-evaluate job descriptions

Many job advertisements still use phrases such as “must possess 3+ years experience” or “degree is required”. These requirements can exclude great candidates even before they apply. The focus is shifting from listing the job requirements to the skills and responsibilities required for the role.

How can it be improved?

• Focus on the outcomes for the role. What will the person be required to do?
• You can distinguish between essential and “nice to haves” skills.
• Use inclusive language to welcome people of diverse backgrounds.

Example:

Try: “Experience managing the employee lifecycle, performance reviews and strong communication skills.”

2. Adopt competency-based assessments

The CV is only part of the story. The candidate may have extensive experience, but lack the skills required for your position. You can see these skills in action with competency-based assessments. Interviews are a crucial stage in evaluating skills. They involve structured questions, skills assessments and interviewer-training.

How do you implement?

• Use practical tasks in interviews (e.g. roleplays or written tasks). As part of the evaluation, emotional intelligence can also be assessed.
• Introduce structured interviewing questions to assess behaviour and judgment in a given situation (“Tell me a story about a time …”). Structured questions in interviews can be used to identify high performers.
• Test specific skills before hiring, such as numerical reasoning, software competency, or customer service scenarios.

Skills-based hiring can improve the candidate experience by streamlining the process, providing clear feedback and streamlining. This gives you a better idea of what a candidate’s will actually do at your workplace.

3. Create Inclusive Talent Pipelines

The hiring of people based on their skills leads to a more inclusive and diverse workplace. You can open up opportunities by removing rigid credentials.

• Candidates from underrepresented groups
• Career changers
• People with no formal education, but practical experience
• Women returning to work after career breaks, e.g. Returners from career breaks (e.g.

The pool of talent is expanded and diversified by hiring on the basis of skills.

How do you do it?

• Partner with adult learning centers, community training schemes, and bootcamps.
• Offer structured entry-level roles and apprenticeships with on-the job learning.
• Create structured return-to work programmes and mentoring opportunities.

The ability to select from a larger pool of applicants is possible with a skills-based recruitment approach.

It also strengthens the commitment of your company to inclusion and equity. Skills-based hiring can be used by a company to optimise recruitment and address talent shortages.

4. Investing in internal mobility and upskilling

The concept of hiring based on skills doesn’t end at recruitment. This same mentality should also be applied to developing your current workforce. It is important to understand the skills and abilities of your current workforce in order to plan a successful workforce.

What HR can do about

• Develop a development plan that is tailored to the strengths of each employee and their career goals.
• Encourage employees to move laterally between departments in order to develop new skills.
• Performance reviews can be used to uncover hidden talents and identify training needs.

Activ PeopleHR allows you to:

• Track and set learning goals
• Performance improvements are monitored over time
• Structure growth conversations between team managers and their teams

Upskilling increases morale, improves retention and fills in skill gaps while saving money and time on external recruitment. Skill-based hiring is an efficient way to address skills gaps.

Data and Automation Make it Possible

HR requires the following tools to implement a skills first approach:

• Track skills: Use a software to document, update and search for competencies across the organization.
• Create reports: Identify skill gaps, evaluate internal mobility potential and plan succession. The skills-first hiring approach prioritizes the use of skills and not traditional credentials to improve job performance.
• Automate admin tasks: Free time from repetitive tasks to focus on strategy.

In order to improve the hiring process, it is important to evaluate and refine selection methods. The future-proofing of the workforce is ensured by skills-based hiring, which helps employees adapt to changing requirements.

Retention begins with recognition

Employees are more likely to remain if they feel that their skills and abilities are valued and there is a way to progress.

Priority is given to the younger generations:

• Ongoing development
• Regular Feedback
• Purpose-driven work
• Flexibility and well-being

Software like Activ PeopleHR makes this possible, by providing you with the data and tools that:

• Run consistent performance reviews
• Early identification of high-potential employees
• Automate low-value administrative tasks so that HR teams can concentrate on people-first strategies

A strategic approach is to hire based on skills. This will help you build high-performance teams. Focusing on skills rather than outdated qualifications or rigid work histories allows you to access a wider range of talent. You can also make better hiring decisions and create an inclusive workplace culture.

Are you ready to drive change in your organization? Activ People HR can help you build the workforce of tomorrow by automating admin, managing skills development and tracking performance. Find out more about how Activ People can help you . You can read the entire blog post by clicking here.