When looking at the job postings, you will notice that for jobs that require an average qualification or for those where no qualification is needed, employers are de-emphasizing degrees and moving towards skill-based hiring. And it’s one of the solutions that you may have chosen recently to cover certain positions. According to The State of Skills-Based Hiring 2022 report, 76% of employers prioritize skills to find new talent, with nearly 55% using role-specific skills tests.
For example, in the US, over the past year, LinkedIn has seen a 21% increase in job postings asking for skills instead of qualifications. Additionally, according to a recent SHRM survey, 1 in 4 companies that use pre-employment tests plan to expand their use in the next five years. And of those who don’t use them, 1 in 10 plan to start.
Will skill-based recruiting change the way we hire people? Are skills tangible benefits for employers? Find out the details below.
SKILLS-BASED EMPLOYMENT VS DIPLOMA-BASED EMPLOYMENT. WHAT’S THE DIFFERENCE?
The concept of skills-based hiring is an approach that focuses on a candidate’s practical skills and performance rather than formal qualifications. The trend more than 3 years ago was to strictly analyze candidates according to job requirements, including education, and certifications. But the pandemic changed the perspective. For example, in May 2020, employees either had unpleasant experiences, had their hours cut off, or lost their jobs altogether.
Therefore, the pandemic has become a turning point in the retraining of employees. In 2020, LinkedIn launched the Career Explorer tool to help laid-off people find possible career transitions based on their skills. The tool mapped the candidate’s skills and detected additional skills they could learn to change their occupation.
An example is HoReCa workers. Waiters and hostesses were shown to have up to 71% similar skills to customer service professionals.
This is a win-win situation for both employers and potential employees. For example, you could fill positions quickly and save on training and onboarding costs. Employees, in turn, can move from one field to another without problems, without losing salary.
Are we witnessing a degree-based hiring revolution? Not quite, not exactly. Admittedly, many positions require certifications, degrees, and considerable experience. Therefore, skill-based hiring is a perfect strategy for low- and medium-skilled jobs.
Harvard Business Review partnered with Emsi Burning Glass, a leading labor market data company, and analyzed more than 51 million job postings published between 2017 and 2020. It found that employers are no longer emphasizing education for positions with average qualification requirements. The change is also visible in some companies with higher-skilled positions.
ADVANTAGES OF SKILLS-BASED RECRUITMENT
In a time where change and uncertainty have become the new normal, it’s essential to implement cutting-edge practices for attracting candidates. Here are the benefits of skill-based recruiting:
Hiring the wrong person can be expensive. In research by Bradford Smart, author of Topgrading book, the estimated cost of a failed hiring process ranges from five to 27 times the value of a person’s actual salary. However, when you implement skill-based hiring, the quality of candidates increases. According to The State of Skills-Based Hiring 2022 report, 92.5% of companies saw a reduction in wrong hires, with 44% reporting a drop of more than 25%.
A larger pool of candidates
One of the most obvious advantages of competency-based recruiting is that it provides a larger pool of candidates, some of whom are passive. At a time when talent is hard to attract, this can be a huge benefit. For example, in May 2022, the US state of Maryland announced that it would eliminate four-year college degree requirements for nearly 50 percent of its positions. This change is a revolutionary move that allows candidates without a degree to be considered for career opportunities.
Reduction of employment time
The time between when a candidate is contacted for the first interview and gets a job offer is important to recruiters and is a KPI they are increasingly paying attention to. Skill-based recruiting results in a faster and more efficient hiring process. By assessing candidates early, HR teams can quickly rank them based on their quantifiable skills. For example, of the companies surveyed by TestGorilla for The State of Skills-Based Hiring 2022 report, 91% noticed a reduction in their total time to hire, with 40% reporting a decrease of more than 25%.
Low employment costs
When you recruit based on skills, you fill vacancies faster. You know right away if people are good at doing certain tasks. This means that the overall cost of advertising and marketing required to promote jobs will decrease.
Retention rates improve
Another benefit of skills-based recruiting is that it helps increase retention. According to McKinsey studies, “hiring for skills is five times more predictive of job performance than hiring for education and more than twice as predictive as hiring for work experience.” Also, employees without a college degree are 34% more likely to stay in their roles longer than those with degrees.
More opportunities for candidates
Skill-based hiring promotes diversity, equity, and inclusion in the workplace by opening doors for people who, for various reasons, can’t find a job because they don’t have a degree or certification.
DIPLOMA REQUIREMENTS GOING AWAY?
To understand what kinds of changes are occurring as companies eliminate degree requirements, Harvard Business Review authors studied IT job postings at several top employers.
Every company they studied had recently announced the elimination of education and degree requirements. What we found, however, was that, in practice, they all continue to demand university degrees. One IT company, for example, required degrees for over 90% of IT jobs, including all network administrators.
More broadly, through the end of 2021, Accenture and IBM have consistently stood out in their efforts to ditch degrees. At Accenture, only 43% of IT job postings included a degree requirement, and at IBM, just 29%. At Apple and Google, more than 70% of IT job postings require a degree.
Given that technical skills can be easily confirmed through pre-employment tests, why do so many employers still require degrees?
Some of them believe that college graduates are trained with “soft” social skills, the ability to work in teams to communicate effectively in real-time, or to prioritize tasks. These skills are much harder to assess, and Harvard Business Review analysis shows that many employers use university degrees as a guarantee of these soft skills. Employers who removed degree requirements added more detailed soft skills requirements to job postings.
This change is notable. Employers are starting to think more carefully about what skills they are really looking for and describe them more explicitly – which also helps candidates to be more aware that they need to develop soft skills.
SOFT SKILLS TO CONSIDER IN Resumes AND INTERVIEWS
The predominantly hybrid work style and the changes taking place in business are the main reasons why you should target people who have the potential to succeed in the job in 2023 and beyond. Consider these skills:
Adaptability. In a time when change has become a normality in businesses, adaptability is one of the skills without which employees could not cope with a job. Employers appreciate professionals who are able to adapt to changes in the workplace, such as new work procedures or a new software.
Creativity. Like adaptability, creativity is a useful skill to succeed in a rapidly evolving work environment. A creative employee is more likely to be able to solve problems that arise in a constantly changing work environment.
Self-motivation. Self-motivated employees are proactive and energetic to do their job well. In addition, they are more willing to take on new challenges, learn new skills, and put effort into professional development. Since only 22% of employees worldwide feel engaged in their work, pay attention to self-motivation right from the interview, with questions that test how people reacted in new or unexpected situations.
Solving problems. The ability to solve problems, from business to interpersonal conflicts, is a valuable asset for companies in 2023. With the rapid changes in work environments and technology, new and unforeseen problems will arise. Make sure you’re recruiting candidates you know you can rely on and who can come up with solutions to situations.
Communication. Communication skills are essential in the workplace and it’s important to keep an eye on them both in your resume and in the interview. Given that people have different working styles, make sure you bring in colleagues with written and verbal communication skills who can adapt to different communication environments: online meetings, social media, and internal communication platforms.
Time management. As people have different work styles and schedule flexibility, you should also pay attention to time management skills as they need to be able to complete their daily tasks on time. Candidates with time management skills are more likely to succeed because they are efficient in planning work hours, maintaining productivity, and completing tasks.
HOW TO ADOPT SOFT SKILLS-BASED RECRUITMENT PRACTICE
Start with small steps
Startups never launch their products without testing hypotheses with real users. So you don’t have to redefine the entire recruitment and hiring process. Start with vacancies where you need to hire a large number of people, that are for mid-skilled positions or have high turnover.
First, define a skills framework for all positions by defining required skills rather than preferred skills. Then search for these skills in your database, on LinkedIn, or in references.
Rewrite job ads
According to LinkedIn, job ads that highlight responsibilities instead of formal requirements receive 14% more resumes per view. Thus, replace “Requirements” with “Responsibilities” to show the tasks assigned to a candidate. That way candidates can figure out if they can do the job.
Focus on testing your skills
Once you’ve decided to conduct a skill-based recruiting, use techniques like competency-based assessments to know the candidate’s practical soft and hard skills.
Ask behavioral and situational interview questions that show whether a candidate has a particular skill. Integrate a working day as a test in the recruitment process, this way you will see the candidate’s skills and how he will react to different situations that may occur in business.
The idea of skill-based recruiting is to check current job-related skills without eliminating candidates because of irrelevant work experience or lack thereof.
A reset of the hiring requirements is important and useful in the context where for certain positions you may find it difficult to find people according to strict requirements. If you want to increase equity in your team, an important way to do so is by removing barriers. And one of those barriers is the degree. Only ask for your education if it’s relevant to the job and you know it played an important role in learning soft skills.