7 Ways to Make Skills-Based Hiring Work

The push for skills-based hiring is growing. More companies are embracing it, including Walmart, Google, IBM, Amazon, Apple, GM, Delta Air Lines, and Target. In fact, LinkedIn’s The Future of Recruiting 2024 report revealed that 73% of recruiting professionals say skills-based hiring and upskilling is a priority.

While there’s no doubt that companies are aligning with the concept, how many companies are actually doing it? A recent study shared that almost half (45%) of companies are making the move to skills-based hiring in name only. So while many are boarding the skills-based hiring train, many less are leaving the station.

How can companies fire up their skills-based hiring engine and really make a difference? It’s up to HR to lead the charge in implementing recruiting, hiring, and retention strategies that put skills first and create impactful workforce changes.

Own the Skills-Based Hiring Mindset

Most HR pros are so accustomed to equating job qualifications to a college degree or a certain number of years of experience that it’s difficult to shift their approach to looking at skills first.

HR leadership should spend time with their own team, hiring managers, and the C-suite talking through why and how skills-based hiring works. Explain the need for it, the value it brings, and the results it delivers.

• The need: Despite an uncertain economy and recent layoffs, employers are still struggling to find the right talent. Skills-based hiring opens up talent pools by considering previously excluded candidates. In fact, LinkedIn found that focusing on skills can increase talent pools tenfold.

• The value: Through skills-based hiring, HR is able to fill positions faster, increase diversity, better retain workers, and create future leaders within the organization. It reduces recruiting costs by securing better matches and therefore lowering the number and price of suboptimal hires.

• The results: Data supports how skills-based hiring leads to more effective hires. LinkedIn reports employers using skills-based recruitment are 60% more likely to make successful hires.

Set the Strategy

Skills-based hiring is an untraditional talent acquisition strategy, so HR departments likely don’t have experience with it and understandably can have trouble getting a program up and running.

HR leaders should partner with internal stakeholders to analyze their business needs to best understand where and how to implement skills-first hiring. Look at what parts of the business seem to always struggle to hire. Review time-to-fill rates,  turnover rates, and promotion rates. Figure out what’s NOT working with hiring, retention and promotions.  The root of an issue may be solved with a skills-based hiring strategy for specific roles.

Spend some time looking at where applications are coming from, how many are received from each source, and the interview per source ratio. Understand how many of those were hired and if the company retained them. Based on that data, HR pros can see which recruiting methods are and aren’t getting the desired results. This may signal a mis-match from your traditional recruiting sources.

Remember that HR teams don’t have to take on skills-first hiring tactics alone. Reach out to new partners to leverage their expertise. Workforce development organizations that specifically focus on the positions you are looking for can unlock non-traditional talent that hasn’t yet been accessed by your organization. Some of these partners are nonprofit, and others are fee-based. Either way, partnering with others can help get things going, particularly in the early stages of a skills-first hiring program. This may be the key to finding talent with the specific skills to meet your business needs.

Even with an approved strategy, implementation is typically where companies fall short. Follow these steps to ensure your organization is maximizing skills-based hiring.

1. Identify the Gaps

Many organizations have a hard time just getting a handle on where they have true talent gaps. Rather than looking at the job titles that need to be filled, HR should better understand the skills that their department heads and managers are seeking. Approach managers who are having trouble filling roles and have a conversation with them.

Hiring managers may find it difficult to pinpoint the skills they need, and this is where HR can step in and lend a hand. Ask hiring managers to identify the desired outcomes of the job along with attributes and skills of past performers in the job when those desired outcomes were met. This allows an organization to assess skills to meet outcomes, versus proxies that assume outcomes.

2. Start Small

Begin with simple steps. Start with a few positions identified as either most difficult or urgent to fill. How could the job descriptions be restructured to be more focused on the skills needed for the roles? Survey the employees already in that role, or those who work alongside that role, to gather this information. During exit interviews, ask questions that will help identify the skills needed to refill those spots.

3. Rework Job Descriptions

Eliminate the laundry list of qualifications. Instead, choose the top five that would bring success in the role. Remove degree requirements from the job descriptions.

List the skills needed first, and ensure the use of gender-neutral descriptors while removing power phrases like “rockstar” and “trailblazer.” Studies show that you will increase your candidate pool by 42% just by removing gender references, thus improving the diversity in your recruiting with this fairly simple tactic.

4. Assess Skills Correctly

During the hiring stage, emphasize competencies and abilities over traditional credentials.

Use technical skill assessments, e.g. math problems. Consider project-based interviews to assess critical thinking and presentation abilities. Use behavioral interviewing when interviewing for soft skills.

Eliminate bias. Ensure the interview process is objective by removing names and education levels on resumes. Use rubric interviews with the same scoring criteria to assess all candidates.

A diverse slate of interviewers can easily become subjective. To maintain objectivity, make sure there is consistency in the hiring process, with interviewers using the same consideration format. This allows for more objective hiring decisions with reduced bias.

5. Offer Ongoing Learning

Once hired, training these candidates is critical to their success. Ongoing learning creates company loyalty, leads to improved company culture, and opens career pathways for them in the future.

The onboarding and training program should include both upskilling and mentorship. A LinkedIn survey reported 94% of workers would stay in a role if they were offered development opportunities.

Leverage internships and apprenticeships. Our partner Year Up, which trains early career professionals for jobs through a robust internship program as an alternative to a four-year degree, reports that 70% of its program participants become full-time employees.

Lastly, utilize their skills! LinkedIn’s The Skills Advantage report revealed that employees who believe their skills aren’t being used are 10 times more likely to change jobs than those who feel their skills are being maximized.

6. Establish Feedback Loops

Create feedback loops between HR, employees, hiring managers, and department heads. This could take the form of sharing metrics once assessed and conducting and analyzing simple surveys. Feedback loops deliver trust and boost productivity among a team. Listen to stakeholders, share that feedback, and use it to upgrade the process.

7. Track Metrics

An HR leader should be able to measure if skills-based hiring is working. To do this, capture benchmarks before starting. At least quarterly, measure retention, turnover, NPS, productivity, and performance ratings. Performance reviews with a rubric scoring are more consistent.

Analyze successes and inadequacies in the skills-based hiring program, and make adjustments where necessary. Share these metrics with leadership and hiring managers to continue to build buy-in at all levels of the company. Lastly, don’t give up after a few hires. Changing mindsets, processes, and gaining sustainable metrics take time, patience, and most of all, partnership.

Healthier Organizations

Skills-based hiring removes unnecessary barriers to job opportunities and expands the talent pool by both numbers and quality. While some roles will still require degrees and experience, for many jobs, hiring based on skills can increase the quality of the match and set the candidate up for success in their new role. 

Including skills-based hiring in your talent acquisition strategy creates opportunities for all participants: It offers new career options for those who normally wouldn’t have been considered for roles, enables the workforce to operate more productively and efficiently, and ensures organizations have the skills they require to be successful.

Editor’s Note: Michelle Sims offers even more insights into skills-based hiring in an episode of the HRMorning podcast “Voices of HR.”