Skills-First Hiring: Transforming Talent Acquisition for the Future Economy
Introduction
It’s widely accepted in today’s talent climate that skills-first hiring will inevitably become an essential part of corporate hiring strategies – but what is it, and why is it set to be “the future of talent acquisition”?
Skills-First Hiring – What Is It?
Skills-based hiring prioritises an applicant’s skills over traditional indications such as education levels or previous work experience. It focuses on matching individuals with roles based on their abilities and competencies, rather than solely considering job history, formal qualifications or personal characteristics.
Many job seekers will attest to the frustrating paradox within hiring – you have to have experience in order to get experience – and so with skills-based hiring, ability becomes the measure of a candidate; in short, you can have the job if you can do the job. A willingness to judge people on an individual basis, with their unique expertise, opens up a much bigger pool of potential candidates. Talent, after all, comes in all shapes and sizes and from different career backgrounds and age groups. A skills- based approach removes the focus on education and experience. It shifts this focus to capability, reducing bias in the hiring procedure.
The Process
Looking at the process of skills-first hiring within talent acquisition practices, the skills- first approach is more likely to involve a practical element, so a candidate’s claims can be put to the test before an offer of employment is made. This method of screening potential hires offers an evidence-based approach to recruitment, so there may be targeted skills-based questions and tests to reveal competency in specific areas. Instead of relying on previous job roles as signals of talent, the idea is to look beyond just what’s on the CV and really understand what someone can do.
The process differs from that of traditional hiring procedures, because employers are likely to take into account things like soft skills, life experiences outside of the workplace, and natural capabilities (including ones that may not have previously been used at all within an employment context). More nuance is required in order to see a person’s potential beyond a cover letter, and the overall process may look a little more complex – but the results can be hugely advantageous.
The Advantages
For the Company:
The benefits of this new approach to hiring can be numerous for a company. The method serves to expand the talent pool, reduce bias, and improve the quality of employment. Organisations adopting skills-based hiring tend to be the ones staying agile and keeping pace with both the changing nature of work, and the ever-shifting market demands.
By focusing on what individuals can do, rather than where they have come from, companies can better align their hiring practices with their strategic goals. This goes on to reduce the number of mis-hires and boost retention, transforming the hiring process. Liz Newman, HR Director at Stratospheric Platforms*, states that “interview practical tests have been a game-changer for certain roles at SPL, revealing real talent beyond the CV and ensuring confident hiring decisions.” When companies invest in their people, they are also demonstrating a commitment to employee development. By prioritising the upskilling and reskilling of their existing employees, they can utilise the talent they have, rather than relying on costly external hires.
A further potential advantage is that by hiring based on skills rather than traditional qualifications, firms can be better positioned to respond to rapid technological advancements and industry changes, which may be out of their control. With the recent pandemic being a good example of this, it demonstrates that companies with a skills-led approach are able to pivot far more effectively during periods of change, as their workforce is more adaptable. With technology advancing more and more quickly, a focus on skills can get firms the talent that they need in order to stay ahead.
When focusing on skills, companies can build a more versatile and capable workforce, driving innovation and growth. An organisation that endeavours to increase diversity within the employee cohort, and to boost overall employee satisfaction and engagement through investment in existing talent, will inevitably see a spike in their attractiveness – as well as their employee retention and loyalty. After all, people will remain where they feel valued.
For the Individual:
Skills-first hiring can provide an open door into roles that may previously have been inaccessible through traditional hiring techniques, creating a more level playing field for those who have learnt skills in non-traditional environments, are self-taught, or have acquired skills through apprenticeships or on-the-job learning.
By looking at skills, a person is more likely to be considered within a talent pool that, based on the arbitrary practices of old hiring techniques, may have discounted them right at the start. For example, if someone has the same skills as another candidate but without the specific degree or previous identical job role, then traditional hiring processes may have excluded them at the very first stage of shortlisting, based on their CV alone. For this reason, a skills-first approach is bound to increase diversity. This provides new opportunities and greater chances for those on the outskirts of a candidate cohort.
There is a plethora of other positives for the individual when it comes to their skills being the main asset. When there is a focus for the individual on skills development, training and upskilling, it ensures the employee remains adaptable and motivated in their career. A person is also more likely to feel fulfilled and confident in a workplace environment that perceives and utilises the unique offerings that they, and they alone, can bring. A skills-first approach provides an individual with more options for career changes and internal movement, increasing their assurance in their own abilities. Their personal potential is expanded, in addition, if they know it can be possible to land a particular job without the traditional hurdles that keep many stuck on a restrictive career pathway.
For the Talent Market and the Wider Economy:
It’s clear, then, that using a skills-first approach in the hiring process can help to create a more diverse and inclusive talent base – something that can only be a good thing, in light of the rising importance of DE&I standards. What’s more, evidence from Deloitte* shows that organisations using this approach are 107% more likely to place talent effectively, 98% more likely to retain high performers, and more likely to build reputations as good places for career progression. The positive response from candidates, and the ability to tap into hidden talent pools, means it also makes acquisition easier for employers when they’re in the market for talent.
Skill Collective, a UK-based consultancy specialising in skills transformation, state that if talent acquisition teams take ownership of collecting, verifying and distributing skill data, this could completely transform the way businesses operate. Having hard, verified data around skills would show exactly what a candidate can do and how they’ll contribute to an organisation’s future. skillcollective.co.uk
With all of this considered, skills-first hiring has the potential to decrease unemployment, retain great talent, and improve hiring practices through skills-based data technology. With less unemployment and higher retention, there can be more productivity – leading to a better performing economy overall.
*Read the article here:
https://www2.deloitte.com/us/en/insights/topics/talent/
organizational-skill-based-hiring.html
The Challenges
This change in approach when it comes to hiring doesn’t come without its potential challenges, however. There will probably be a need to create brand new strategies and structures dedicated to hiring and internal talent progression, requiring an investment of both time and cost.
Time and Training:
Taking a new stance towards talent acquisition will require extra time and training for those who are involved in the process – in particular, HR personnel. A skills-based approach requires hiring managers to know how to assess skills in a measurable way. This may include workshops, e-learning modules, and instruction in the creation of clear skills-focused job descriptions. Hiring managers who haven’t received sufficient training on a new hiring system may naturally default to what they know, so adequate guidance is essential.
Additionally, it is likely that increased time will be needed on candidate screening – especially where soft skills are being brought into the equation – due to the nuanced nature of decision making in the skills-first approach. It can be difficult to assess soft skills through tests alone, and it can be challenging to verify the authenticity and quality of a candidate’s skills without the traditional verification benchmarks such as degrees. Companies will need to invest time in meticulously mapping out the skills required for each role, including proficiency levels, to ensure the right person is hired.
The training needs of candidates must also be considered. New hires with non- traditional educational backgrounds might require additional training to align with company-specific practices and culture, in addition to their on-the-job learning process.
Technology:
As well as the manual aspects of the process, there is also the technological side to consider. Organisations may need to implement new skills assessment platforms and AI-driven tools to record data, and to streamline the process of assessing, tracking and comparing candidates’ competencies. Tools such as these can be time- consuming and costly to develop and administer, but without integrating this tech, hiring teams may struggle to scale up their skills-based practices. This is because older, legacy HR systems may not be equipped to handle skills-based data or to integrate it with other talent management systems.
Risk of Bias:
While skills-based hiring is designed to be inclusive, there’s a risk of creating bias against those with traditional qualifications, and potentially missing out on great candidates with strong experience. Those who may have been to very good schools, or spent years in relevant roles, might be overlooked in favour of those with the right skill set but less experience.
It’s important to remember that there are positives to traditional hiring techniques, so a holistic approach to the decision making process is required in order to remain inclusive and open-minded when finding the right talent for the role.
Conclusion
So, considering all the points above, why should your company consider a skills-first approach to hiring?
In the context of modern business practices, prioritising recruitment means rethinking how we identify, engage and attract talent into a company. And, in the increasingly competitive talent market, the businesses that have established a skills-based talent acquisition process will often have the competitive advantage over their peers.
With the recruitment landscape continually evolving, talent acquisition leaders must be adaptable and open to new methodologies and technologies in hiring. Staying up to date with industry best practices and innovative tools for skills assessment is therefore a crucial part of the hiring process.
Although there are challenges and significant investments of time and cost with any new approach, embracing new ways of bringing people on board will no doubt lead to greater diversity and inclusivity. This will ultimately drive high performance and growth, creating highly adaptable working environments that motivate individuals to succeed.
If you would like to learn more about this topic, and how we can support your talent strategy, please feel free to get in touch with Hugo Reoch or Helen Davies on hugo.reoch@henleyresearch.com / helen.davies@henleyresearch.com for a confidential conversation.
