A Quick Guide to Skills-Based Hiring

Skills-based or skills-first hiring isn’t a new hiring practice, but it is gaining more traction in the hiring world. If you’re involved in the hiring process for your company, then you know how nuanced it can be. You have to decide what you need to hire for, come up with a hiring plan, write the job description, advertise across platforms, comb through resumes, reach out to potential candidates, schedule interviews, perform assessments, and complete background checks, all before coming to a final decision. It’s a lot of work. 

Skills-based hiring gives you a more efficient approach. But what is skills-based hiring, anyway? Let’s discuss. 

What Is Skills-Based Hiring?

When you look over a resume, you’re looking over a candidate’s entire background – their education, their experience, and their skill set – and then deciding if the candidate is a good fit for your company. That is, of course, how it’s been done traditionally. With skills-based hiring, though, you can decide based on the skills the candidate brings to the table. 

However, you can’t just go off what the candidate tells you they’re bringing to the table. You have to test them on their skills through hands-on assessments, which will leave no room for falsities when you hire your next candidate. Testing your candidate’s competencies will allow you to make sure they haven’t exaggerated or lied about their skills.

This might seem like too big a change from the traditional methods. You might even think that it won’t work as well as reviewing resumes. What if you make a mistake and hire someone based just on their skills alone, and it ends up not working out? Of course, that’s always a chance you take when hiring anyone, regardless of the method you choose. But hiring based on skills rather than education and experience can increase your chances of hiring the right person for the job, and 92% of surveyed employers agree. 

Resumes have always been a big deal in the hiring process, but since 2022, more employers have been prioritizing skills over education and experience. So why not join them?

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Benefits of Skills-Based Hiring

So what are the benefits of skills-based hiring? Why should you replace your traditional hiring practices with skills-first hiring methods? There are a few good reasons to do this, which include: 

• Faster and more efficient hiring process: Skills-based hiring allows you to dive straight into what really matters – how well your candidates can perform on the job. All you have to do is test their hard and soft skills through skills-based assessments to see if they would do well with your company. Most of these tests are automatically graded, too, so you’ll be saving your HR department a lot of time and effort. 
   
• Improved quality of new employees: Education and experience can show that your candidates know what they’re doing and have performed well at their previous jobs – but all jobs are different. Can they perform well at your company? The best way to determine this is to use assessments that are specific to your job and the skills it requires. When your candidates complete these assessments, you’ll know that you’re getting the best employee for the job. 
   
• More diversity in your talent pool: Not everyone follows the same path. Some candidates may not have the right education or experience for the job, but their skills make up for it. Perhaps they’re self-taught, or maybe they’ve been freelancing. Removing barriers like asking for a college degree or five-plus years of experience can broaden your talent pool and open your company up to a diverse range of talented individuals who might have been overlooked otherwise. 
   
• Cost savings: Hiring new employees is expensive, especially if you hire the wrong employees. This can happen when you hire individuals who don’t possess the right skills for your company’s needs despite being educated and experienced.
   

How Skills-Based Hiring Will Help You Successfully Hire Candidates

You’re probably wondering how skills-based hiring can help you successfully hire your next candidates. Here are a few ways that it can help: 

• Skills-based assessments: You can use tests and assessments to evaluate your prospective candidate’s knowledge and skills in the required areas, such as coding and writing. You can also use project simulation through virtual reality and augmented reality to test your candidate’s skills based on the job that needs to be performed. 
   
• Behavioral and structured situational interviews: You can tailor your interviews around skill-specific questions and exercises, helping you determine how well your candidate will perform job-related tasks. 
   
• Internships: You can offer internships that put your candidates to the test, allowing them to demonstrate their skills and show you that they’re the right fit for the role. 
   

The Challenges of Skills-Based Hiring

Although skills-based hiring has become more popular while providing companies with numerous benefits, it still brings some challenges to the table. For example, you’ll be adding another step – the assessments – to the hiring process, which can slow down recruitment and may deter some candidates from applying. Of course, you want to make sure that your tests are reliable and can’t be cheated. To avoid this particular concern, you could have the assessment done in person or via conference call, where you can supervise the candidates yourself. Additionally, you could outsource your assessments to a certified third-party provider.

Skills-based hiring could also be costly to implement, though the costs are even greater if you end up hiring and training the wrong person.

If you do plan on using skills-based hiring practices in the future, keep these challenges in mind. 

Skills Over Resumes: The Future of Hiring

The way companies hire new employees has changed over the years. While traditional methods have gotten many through tough hiring periods, skills-based hiring methods are on the rise as a more effective approach to finding the perfect candidate. As newer generations, such as Generation Z and Alpha, enter the workforce, it’s important to keep up with the changes in the market and emerging hiring processes. 

Ready to bring on a new generation of workers? Check out iHire’s employer resources. From tips on interviewing candidates and fostering a positive company culture to implementing effective hiring processes, iHire has you covered.