People-Based. Market-Driven.


Employers see value of skills-based hiring but struggle to implement

August 19, 2023

Increasingly, private and public sector employers are setting aside degree requirements in favor of a skills-based approach to recruiting and hiring. A skills-based strategy focuses on an applicant’s skills, abilities and competencies over formal degrees and minimum years of experience.

Recent research demonstrates advantages for both employers and job seekers when using a skills-based approach. Skills-based job postings attract a broader, more diverse pool of applicants and expand opportunities for nontraditional candidates. Skills-based recruiting also reduces time-to-hire.

Improved matching of applicants to job roles in turn leads to higher retention. Beyond the initial hire, organizations can use skills-based pathways to help workers advance internally, identifying skill gaps for a new role and creating training plans that support workers’ progression.

Implementing Skills-Based Practices

Transitioning to skills-based hiring takes work and planning, beginning with leadership that champions this approach and helps hiring managers understand and embrace its value. HR leaders and hiring managers must then work together to analyze job roles and determine which skills are most predictive for success in a particular role and for future advancement within the organization.

Employers’ top two challenges in adopting a skills-based approach are “validating skills, competencies and references” and “sourcing jobseekers with the right skills and getting them to apply,” according to McKinsey's 2021 survey of nearly 300 small- and medium-size businesses.

Experts recommend two approaches to skills validation. Behavioral and situational interview questions enable applicants to provide examples that demonstrate soft skills, e.g., working on a team, delivering exceptional customer service, resolving conflict, or correcting a mistake. Educational and industry credentials, along with tests or assignments that measure math, reading or digital literacy, are useful to assess specific hard skills.

To improve their sourcing of talent, employers are encouraged to build local networks that support skills-based practices. Workforce intermediaries, including alternative staffing enterprises, can be key partners in connecting employers to nontraditional talent pools, validating candidates’ skills, coaching new hires, and co-developing training solutions to address gaps and help workers advance.

Visit the following links to learn more about the promise and impact of skills-based hiring:

Why skill-based hiring is on the rise, Forbes

Skills-Based Hiring Requires Commitment to Change, SHRM

The State of Skills-Based Hiring 2022, Test Gorilla

Taking a skills-based approach to building the future workforce, McKinsey & Company

Stop requiring college degrees for jobs that don’t need them, Vox

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