Why Skills-Based Recruitment Could be the Solution to Talent Shortages

Identifying and hiring the right talent has long been one of the top recruitment challenges, and the ongoing skills crisis has become HR’s latest headache. While millions of fresh graduates walk out of university with a bachelor’s or master’s degree every year, many companies are still having trouble finding people with the right skill sets to fill open roles.

skills based recruitment 2024

We recently analyzed over 7.4 million U.S. jobs advertised on Adzuna in August 2023 and examined the postings advertising a salary topping $200,000. The research suggests that talent acquisition specialists may have pivoted away from traditional educational requirements and toward skills-based recruitment to ensure they are not overlooking skilled talent.

Skills Are In, Degrees Are Out

Only a few years ago, degree inflation had penetrated almost every sector of the U.S. job market with speed and depth. A college degree became a prerequisite for almost every role, even for those that didn’t really require college-level skills.

Thankfully, this broad-brush approach didn’t last long as companies soon realized that it was only undermining their hiring efforts and quality. Prominent employers such as Apple, Google, IBM, Walmart, and more announced one by one that they were scrapping degree requirements for their applicants.

The government has picked this up as well, with the State of Maryland becoming the first state to remove four-year degrees for thousands of state jobs, setting off the trend for the public sector.

Their decisions are de facto making waves across the whole country, as the Adzuna research reveals that nearly 90% of the analyzed job ads in August 2023 left out any degree requirements, and less than one in ten (9.5%) made any mention of applicants needing to have a degree.

While it’s clear that certain jobs are leaving out a degree requirement because it is assumed, for other roles it appears that formal college education has lost its sheen, and hands-on experience and skill sets have become the focal point for forward-thinking employers and HR professionals, even among the highest paid roles

For instance, there is a higher proportion of jobs advertising salaries over $200,000 in PR, Advertising & Marketing (1.4%), and HR (1.2%) compared to Healthcare & Nursing (1%) and Engineering (0.5%) – two sectors that normally require years of schooling and credentials and that are commonly thought to offer high-paying salaries.

Most Competitive Soft and Hard Skills

The nation is in the throes of skill shortages, as the pandemic has ushered in new ways of working and prompted workers to reassess their priorities in life. Employers are increasingly placing greater value on soft skills, which are necessary for all professions but difficult to acquire.

Among the top soft skills cited within top job ads offering over $200K, “Energetic” tops the list, with almost a quarter (23.5%) of job ads with high-paying salaries citing it. There has been a major decline in engagement and an increase in burnout in recent years and viral microwork trends, such as “Quiet Quitting”, “Bare Minimum Mondays”, and “Lazy Girl Jobs” are associated with a lack of passion or enthusiasm.

HR professionals are therefore gravitating towards candidates who display high energy so they can help drive higher engagement amongst their teams and other staff.

Communication is the second most sought-after soft skill, with 12.2% of advertised job ads paying over $200K featuring this. At the height of the pandemic, workers were actively discouraged from face-to-face communication, and remote communication slowly became the norm. Now that the pandemic is finally over, effective communication skills are needed for building rapport and fostering in-person relationships.

The next most wanted soft skills are planning (6.4%), leadership (6.3%), and management (6.2%) skills, all vital for helping businesses steer through all the thorny issues they are facing, from rising inflation, digital disruption, labor shortage, to supply chain disruptions.

As for hard skills, “Invoicing” leads and is cited in 26.9% of ads with high-paying salaries, followed by “Operations” (4.1%), “Dispatching” (4.1%), “Research” (3.8%), and “Sales” (3.7%) skills.

Hiring As We Head into 2024

In the face of labor shortages, talent scarcity, and tighter budgets, to name a few, HR professionals are pivoting ways to weather these challenges. Our research has revealed that many have modernized their hiring practices towards skill-based recruitment, especially for highly paying roles.

Rather than screening for educational background, qualifications and previous work experience, talent acquisition specialists are looking for competencies.

Implementing a skill-based approach could be daunting at first because it is no longer a tick-box exercise. Nevertheless, it will have long-lasting positive effects, with research indicating that the majority of companies adopting this approach have experienced a reduction in total time-to-hire and mis-hires. It’s also easier to recruit people with different backgrounds, experiences and perspectives.

An easy way to transition to this approach is to shift the focus of your job descriptions from pedigree requirements to essential skills. The more difficult part is to change your mind set during the candidate screening process and revise your whole interview process.

Get acquainted with competency-based questions, behavioral questions, and myriads of skill-based assessments.

It’s highly unlikely that the widening skills gap will magically go away in the next month. As the new year rings in, HR professionals who are determined to win the talent war should consider getting their company on board with this new hiring approach.

James Neave is head of data science at smarter job search engine Adzuna.

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