What is Skills-Based Hiring?
Skill-based talent management, or skills-based hiring, is a business approach that emphasizes a person’s abilities as a basis for hiring or promotion. It stands in contrast with the more traditional role-based focus by putting less weight on a candidate’s formal education or prior roles as evidence of their ability to be successful in a position.
Skills-based hiring is not a new concept. It dates at least as far back as 1992, when University of Southern California business school professors Edward Lawler and Gerald Ledford published a paper positing that skills-based human resource management has advantages over more typical role-based hiring. Despite its history, skills-based hiring has only recently been embraced by a significant share of mainstream employers. Challenges such as pay equity, conflicting HR priorities and operational challenges associated with such a dramatic mindset shift are likely to blame for such a slow adoption process.
The share of US job postings that include degree requirements have decreased by almost 4 percentage points, from 83% in 2017 to 79% now.
One of the most common approaches to skills-based hiring in recruitment is to do away with college degree requirements for roles that do not in reality involve four-year college-level skills. Technology companies like IBM, Dell, and Google have gone on the record saying they are reducing college degree requirements for some tech roles. So too are large non-tech firms like Bank of America.
They are not the only ones. Skills-based hiring has become popular for both private sector companies and government agencies looking to address their talent shortages. Since 2017, the share of US job postings that include degree requirements have decreased by almost 4 percentage points, from 83% to 79%.
Beyond dropping or de-emphasizing degrees, talent managers may also look outside of the IT department for technology talent. Many organizations have grown their pool of business tech professionals, citizen data scientists, and other non-technology department roles in order to keep up with the business units’ demand for technology. That perfect candidate may have spent their career up to now in finance, not IT, yet has the data analytics skills your organization needs for its AI center of excellence.
That perfect candidate may have spent their career up to now in finance, not IT, yet has the data analytics skills your organization needs for its AI center of excellence.
Why Skills-Based Hiring May Become Mission-Critical in Tech
Businesses in the technology sector, and the tech teams outside of it, are positioned to gain the most from a skills-based hiring approach. This is partly because technology is in a constant state of flux, with new skills emerging and existing ones becoming outdated at an ever-increasing pace. This landscape creates a unique workforce and as a result, tech professionals are naturally adept at continuous learning and positioning themselves based on the latest in-demand skillsets.
Skills-based hiring aligns perfectly with the way both recruiters and candidates navigate the tech talent market: recruiters can target individuals with the right skillsets, regardless of traditional markers like degrees, and candidates can showcase their adaptability and ongoing learning. With skills obsolescence a constant concern, focusing on skills over pedigree makes hiring easier and more effective.