COVID-19’s destabilization of the labor market is still evident three years later. According to the U.S. Chamber of Commerce, workforce participation has yet to return to pre-pandemic levels, leaving employers floundering in their searches for qualified workers.
Many additional factors — such as an aging workforce, stalling population growth, slowing immigration rates, technological shifts, and ever-changing workforce goals (like the increasing demand for remote work) — further complicate the employment landscape. Changes in today’s labor market forced many employers to alter their hiring tactics. This, for many, means a shift towards skills-first hiring.
A positive innovation in talent acquisition, skills-first hiring expands talent pools, facilitates talent searches, and forges new opportunities for workers to secure employment and advance their careers.
If there was ever a win-win situation in talent acquisition, skills-first hiring epitomizes it.
What Is Skills-First Hiring?
Skills-first hiring prioritizes candidates’ skills over traditional criteria like work history and education. In the skills-first approach, employers evaluate candidates based on their abilities and competencies instead of, for example, what degree they hold or what job title they are assigned.
While traditional hiring practices dominated the field for decades, hiring professionals realize more and more that experience and education alone do not fully encompass a candidate’s qualifications. To get the full picture, employers must consider the totality of a candidate’s abilities, even those obtained in non-traditional ways.
This is becoming increasingly important as new avenues of obtaining work-related skills emerge. Nowadays, many people learn through apprenticeships, certificate programs, and online learning — valid and valuable educational paths that are not included in traditional evaluations of work history and education.
Employer Benefits of Skills-First Hiring
By removing the emphasis on education and experience, employers open themselves to a much larger talent pool. According to a 2023 LinkedIn report, skills-first hiring increases the talent pool almost 20x, which is critical during labor shortages.
This is because many candidates do not meet the usual education and experience requirements, despite being otherwise qualified. For example, only about 37% of the workforce holds a bachelor’s degree, despite 70% of jobs requiring one. Meanwhile, about 50% of the workforce has obtained skills outside of college, which means employers with degree requirements cut themselves off from a significant portion of skilled candidates.
Skills-first hiring also promotes employer satisfaction and employee retention.
Studies find that skills-based hiring is 5x more predictive of on-the-job performance than education and experience. Further, a skills-first mindset helps employers identify non-obvious opportunities to hire internally. And, as data shows, workers who make an internal move after two years of employment have a 75% chance of staying with their employer — as opposed to 56% for those who maintain the same position.
By expanding the talent pool and better utilizing available workers, skills-first hiring empowers employers to fill critical openings and stay competitive in today’s turbulent labor market.
Worker Benefits of Skills-First Hiring
Skills-first hiring has a positive effect on workers as well. This approach creates a more equitable, diverse, and resilient labor market and generates opportunities for those who tend to be excluded by traditional hiring practices.
A little over 1/3 of the workforce does not have a bachelor’s degree. Many factors prevent certain individuals from obtaining higher education, the inability to afford the sky-high tuition at the forefront.
However, bypassing traditional education does not prevent people from acquiring critical skills, especially as online learning lowers the barrier to education. In turn, the skills-first approach increases diversity in the workplace by serving disadvantaged populations with new opportunities.
For example, only about 20% of test engineers are women. Meanwhile, women comprise 47% of the talent pool with relevant skills, which means many more women are qualified to work as test engineers than get to work as test engineers.
In fact, when employers use skills-first hiring, the proportion of women in the talent pool increases 24% in male-dominated fields. And this has positive implications for workers of color and older workers as well, who are also excluded by traditional hiring practices in higher proportions. With all this in mind, it’s no wonder the implementation of skills-first hiring is on the rise. Today 20% of job listings forgo degree requirements. Some see skills-first hiring as a supplement to traditional hiring as opposed to a replacement. Regardless, employers who adopt the skills-first approach contribute to a more equitable labor market and modernize the search for talent.
Nexxt is a recruitment media company that uses today’s most effective marketing tactics to reach the full spectrum of talent – from active to passive, and everything in between. Learn more about hiring with Nexxt.
This article was written by Danielle Murphy.
Danielle Murphy is a content writer and copywriter with a passion for helping businesses meet their marketing goals with writing. When she’s not working (or writing for fun), she’s hiking or hobby farming around her home in New Hampshire.
I appreciate the effort that goes into creating high-quality content, and this post was no exception. The insights and information were top-notch and made for a really engaging read. Keep up the great work!