Why Skills-Based Hiring Can Open the Door For More Diverse Talent

Skills-based hiring is gaining traction as companies seek innovative ways to attract the right talent.

In a world where talent shortages are the norm, employers are rethinking their hiring strategies. Enter skills-based hiring—a fresh approach that’s gaining traction as companies seek innovative ways to attract the right talent. According to a recent survey, 81% of employers adopted this approach last year, up from 73% in 2023.

Skills-based hiring focusing on candidates’ abilities and competencies rather than their formal education or direct experience.

Essentially, skills-based hiring gives you access to a broader talent pool, including those who may not fit the traditional mold but possess valuable skills acquired through alternative paths.

Challenging The Need For a College Degree

The popularity of skills-based hiring has surged, especially in today’s tight labor market. As companies scramble to fill roles, they’re realizing that traditional degree requirements can be limiting and are more willing to consider candidates who can demonstrate the required skills without necessarily having a degree. According to Indeed, more than half (52%) of their U.S. job postings did not mention any formal education requirement. Further, the percentage of job ads requiring a college degree dropped by 17.8%, which is approximately 3% less than five years ago.

Given the rising costs of a college education and student debt, this is particularly relevant as many individuals reconsider the value of a college education. A recent poll revealed that 56% of U.S. adults believe a degree is a poor investment anyway.

Doctors, lawyers, engineers, and other specialized occupations will always require advanced educational degrees. But many skills nowadays can be self-taught or learned through trade schools, making skills-based hiring even more valuable.

However, implementing a skills-based hiring approach can be a challenge to employers who have historically relied on degrees as a basis for evaluating talent. Employers are now having to redefine all the skills required for roles, update job descriptions, and evaluate pay scales.

5 Proactive Steps For a Successful Skills-Based Hiring Approach

To implement skills-based hiring, hiring managers should consider these five proactive measures:

1. Applaud successful hires: Employers should highlight successful hires who have thrived without having degrees. For example, if you have a leader or other hire who has experienced promotions and success and does not have a degree, highlight that individual.

2. Identify common traits: Analyze the backgrounds of successful non-degree hires to identify common traits and experiences. If you can find any patterns in these hires, you can then use that as a guideline for additional hires.

3. Define necessary skills for productivity: This approach helps eliminate unnecessary qualifications that might deter qualified candidates. Ask HR to specify what constitutes evidence of skill mastery—be it certifications, prior experience, or performance assessments. These can help determine a candidate’s actual qualifications rather than just a college degree as proof of competency.

4. Revise onboarding process: Skills-based hiring doesn’t end at the offer letter. Non-degreed hires may lack the social capital that degree holders possess. Implement onboarding programs that reduce anxiety and foster integration, as well as provide peer support groups for guidance.

5. Promote internally first then hire externally: Hiring is inherently risky, and promoting from within allows managers to assess candidates’ skills and commitment firsthand.

The Future of Hiring

While requiring a college degree is not likely to completely be eliminated from all job postings, skills-based hiring is going to be a permanent fixture in talent acquisition strategies. This means workers should start to invest in more skills now, regardless of their education level. For employers, they need to implement skills-first hiring practices where it makes sense for their company.

By embracing this approach, companies can tap into a wealth of untapped potential, ensuring they remain competitive in the quest for the top, yet most diverse talent, which will lead to a more inclusive and dynamic workforce.

Engaged and loyal employees are the backbone of any company’s success.
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