Recruiting, Technology

How Skills-Based Hiring Can Boost an Organization

The pursuit of talent has never been more intense. Organizations are scrambling to fill positions that have been vacant since the pandemic-induced Great Resignation. Interestingly, while 63% of employers face talent shortages, 94% of HR decision-makers have trouble finding qualified candidates.  

skills-based hiring

Hiring managers need help meeting their staffing needs through traditional recruiting activities. It begs the question of whether employers are focusing on the wrong things during the recruitment process. With only 35% of employers focusing on soft skills when hiring, there is supplementary evidence that this is an organizational shortcoming to shine a light on. 

Skills-Based Hiring Is the Future

Hiring based on skills sounds intuitive enough; you might even think, “Isn’t that already the norm?” But truth be told, this kind of hiring has been undervalued for decades. Much of the hiring technology HR departments have embraced in recent years has left many jobseekers at a disadvantage because it’s predominantly focused on filtering rather than matching. Filtering excludes a large swath of applicants from consideration before a human ever gets a chance to put eyes on their résumés. According to Harvard Business Review, these data-driven algorithms can be so effective at filtering that as much as 72% of résumés are discarded right off the bat. 

Hiring managers are trained to focus on candidates who fit within a set of clearly defined parameters that indicate a person’s worthiness of a particular position. The two main parameters they take into account are education credentials and job history. But this method leaves out talented candidates who fall outside the defined parameters or gain their skills through unconventional avenues but are every bit as qualified to do great work and excel in the position, such as veterans, people with disabilities, or individuals who could not opt for a traditional education or career path and earned their skills in a different way. 

The End of Imposter Syndrome  

Unique work history or the lack of a college degree can cause résumés of skilled workers to end up in the digital “discard pile” generated by filtering technology. The focus of this conventional employment technology has been on buzzwords on a résumé, which are not accurate measures of a candidate’s actual qualifications. 

One problem with favoring résumés that leverage the right keyword components is that it enables candidates to manufacture a résumé persona that matches the job description but that is based on something other than reality. It encourages playing a role and curating a profile instead of truly conveying ability and describing strengths.

According to the Monster Future of Work: 2021 Outlook Survey, over 60% of jobseekers exaggerate their previous work experience during the hiring process. This means that less than half of candidates are actually skilled in what they say they are. Many jobseekers use buzzwords such as problem-solver, multitasker, and self-starter, but many haven’t actually put these skills to the test. And many forget to mention other vital “soft” skills such as being flexible, loyal, and intuitive. 

What if instead of comparing accomplishments through previous titles, the hiring manager understands exactly what skills are required to do the task and recognizes those skills in a candidate regardless of the person’s previous title? Skills-based hiring removes the labels and the need for fabricating a narrative. 

The Rise of Job Satisfaction and Low Churn

Matching candidates based on skills creates an employment pipeline that lessens churn. When employees are fit for the right job, satisfaction increases. Companies must become better at hiring to ensure candidates are matched on true skills and to enable progress in other internal needs. When employers focus on underappreciated talent, they can find brilliantly qualified candidates others miss due to filters and bias. 

HR is already challenged with new employee initiatives and structures; utilizing a talent sourcing platform gives them room to further improve the organization talent is being hired into. They can focus on company culture, values, opportunities for growth, and other ways to create a desirable and healthy workplace.

Being in the Right Position Improves Productivity 

Focusing on candidates’ skill sets and their experience and accomplishments that have been the most meaningful to them and why will help you better understand what matters most to them and place them in the right position, not just any position. 

Employees who love what they do and are genuinely capable of doing their job lead to an overall boost in productivity and enhanced performance. These kinds of employees are more likely to be optimistic, motivated, quick to learn, more mindful of mistakes, and better decision-makers. 

HR is a people-first function, but it still has to answer to the bottom line, and a productive workforce will certainly help contribute to an organization’s bottom line in a meaningful way. 

A Diverse Workforce Increases Cultural Awareness

We all know there are certain “red flags” recruiting systems are designed to find to knock people out of the running automatically. These include a lack of higher education or a college degree, unconventional job titles, and job hopping or an extended break from the workforce, among others. This automated process is leaving disadvantaged and marginalized groups, such as lower-income individuals, veterans, those with disabilities, parents, etc., out of the running, perpetuating bias and bottlenecking diversity, equity, and inclusion initiatives.  

Focusing on skills is an equalizer. It brings more people into the fold and leads to a more diverse workforce. According to one study, diverse teams make better decisions than nondiverse teams up to 87% of the time. Another study shows that companies in the top quartile for gender diversity in their executive teams are 15% more likely to generate above-average profitability compared with companies in the bottom quartile whose executive teams are predominantly white males. Teams that demonstrate diversity are proven to be smarter, more innovative, and more socially aware, highlighting some of the many benefits your business experiences when you expand your hiring practices.

By shifting hiring practices to skills, HR professionals can attract more candidates from diverse backgrounds, enhancing how a business functions and making companies more appealing to other applicants. 

Conclusion

The hiring struggle we’re facing now has had positive effects: Many organizations have expanded their definition of a qualified candidate, broadening the talent pool to include formerly overlooked individuals through implementing skills-based hiring. This approach reduces churn and makes it easier for HR departments to fill positions, and it naturally results in a more productive, culturally aware, and diverse workforce. All of these benefits have a profound positive impact on organizational well-being.

People and systems don’t always embrace change, especially when they think the “old guard” benefits the greater good. When it comes to hiring, that isn’t the case; so many people, including veterans, are being overlooked. Our job is to convey that the value of skills-based hiring outweighs the discomfort of pivoting and learning a new process. 

Robyn Grable is the Founder and CEO of Talents ASCEND and Veterans ASCEND.