What is Skills-Based Hiring and How to Implement into Recruitment Strategies

What is Skills-Based Hiring and How to Implement into Recruitment Strategies

Key Takeaways:

  • Skills-based hiring expands the talent pool by focusing on candidates' demonstrated skills and abilities rather than traditional qualifications. This approach attracts diverse candidates and enhances company culture, retention rates, and overall quality of hires.
  • The benefits of skills-based hiring extend beyond immediate recruitment needs. It fosters a culture of innovation, accelerates time-to-hire, reduces hiring costs, and increases the likelihood of retaining high-performing talent.
  • Skills-based hiring helps organizations anticipate and effectively navigate changes in the market. By identifying emerging skills and industry trends, companies can proactively develop, source, and nurture the required skills to maintain a competitive edge.

In today's fiercely competitive talent landscape, hiring professionals are grappling to attract and secure top talent. In fact, studies have shown that approximately 9 in 10 leaders think their organizations currently face skills gaps in their organizations or anticipate experiencing them within the next five years. This trend highlights the pressing need for companies to address these skills gaps to remain competitive and ensure a skilled workforce for future success.

In the realm of recruitment, skills-based hiring has emerged as a powerful approach for identifying and selecting top talent. TestGorilla's The State of Skills-Based Hiring 2022 report reveals that 76% of employers incorporate skills-based hiring to discover new talent, and approximately 55% utilize role-specific skills tests in their hiring process.

SHRM Foundation President Wendi Safstrom said, "While most employers agree skills-based hiring is valuable, few employers have made changes to their practices. This keeps qualified talent on the sidelines and businesses from thriving. Even worse, the talent employers are missing are people from historically underrepresented and untapped groups."

Discover the power of skills-based hiring, its benefits for companies, and how it can help revolutionize a talent acquisition strategy.

what is skills based hiring


What is Skills-Based Hiring?

Skills-based hiring is an approach to the recruitment and selection process that focuses primarily on an individual's skills and abilities rather than traditional qualifications or credentials, such as degrees or years of experience. In skills-based hiring, employers prioritize assessing and evaluating candidates based on their demonstrated capabilities to perform specific tasks or responsibilities required for a particular job.

A skills-based approach allows companies to focus on tangible skills, ensuring a better match between a candidate's capabilities and the role requirements – leading to more successful hires.


Benefits of Skills-Based Hiring for Companies

Skills-based talent management helps professionals target skills people can’t get a degree for, including collaboration, empathy, and problem-solving. Focusing on skills also helps with culture and retention rates, since companies will find higher quality candidates. According to McKinsey, “hiring for skills is five times more predictive of job performance than hiring for education and more than two times more predictive than hiring for work experience.” 

One of the significant advantages of skills-based hiring is its ability to significantly expand the talent pool. When removing barriers to entry, such as industry experience, network connections, or strict educational requirements, organizations can quickly access a broader range of potential candidates. The expansion of the talent pool brings numerous benefits, including the opportunity to build a more diverse workforce. When focusing on skills, companies can attract individuals from different backgrounds, cultures, and perspectives – which fosters a more inclusive and innovative environment. 

A skills-based focus, complemented by a culture of continuous learning, plays a crucial role in closing skills gaps and cultivating a more agile workforce. This approach enables teams to hire at scale and effectively meet their hiring needs and goals. Skills-based hiring goes beyond simply assessing existing skills; it also involves providing employees with relevant and meaningful learning opportunities integrated into their workflow. Ongoing skills and capability development, tailored to align with the organization's business needs, ensures that employees are equipped to adapt and perform effectively. 

skilled positions

It is important to consider that the workforce is aging, and it is crucial to proactively plan for training the younger generation in the necessary hard skills before the older generations retire or leave the workforce due to aging. 

A focus on skills and career growth enhances employee productivity and performance and prepares the workforce to navigate major business changes. By investing in employees' skills and facilitating their career growth, companies foster higher levels of employee engagement, resulting in a more dedicated and positive workforce. Facilitating career growth also contributes to a strong employer brand and aids in employee retention efforts, as individuals are more likely to stay with a company that supports their professional development and provides opportunities for growth. Ultimately, businesses thrive and grow when they actively adapt and cultivate their employees' skills to meet evolving demands.


The Benefits for the Employer Brand and EVP

Skills-based hiring significantly contributes to employer brand and employee value proposition (EVP) for several reasons. Skills-based hiring allows companies to attract and hire individuals with the right skill sets, leading to a workforce that is better equipped to meet business objectives. An alignment between skills and job requirements creates a positive work environment where employees can contribute meaningfully, which enhances the employer brand.

Also, skills-based hiring contributes to a positive company culture. Prioritizing skills and abilities helps organizations hire high-quality employees who are capable of performing their roles effectively. An emphasis on competence and skill alignment enhances the overall performance and productivity of the company, leading to long-term success and allows recruitment to be flexible and forward-thinking.

skills-based hiring in recruitment


A Focus on Elevating Employees

Hiring for skills promotes a culture of continuous learning and development. When organizations invest in their employees' skills and career growth, it sends a strong message that they value their workforce. A commitment to employee growth and advancement strengthens EVP, as individuals feel supported and see opportunities for career progression within the organization.

To elaborate, many candidates seek opportunities with companies that demonstrate clear career progression options, indicating the organization's commitment to their growth and potential for a long-term future at the company. This approach not only attracts top talent but also instills a sense of security among the most dedicated and capable employees – which can help foster a strong brand of commitment to employees.

Companies prioritizing skills and providing opportunities for skill development tend to have more engaged, dedicated employees who speak highly of their organization, further bolstering the employer brand.


How to Implement Skills-Based Hiring into Recruitment Practices


Update Job Description

One effective strategy for promoting inclusivity and expanding the talent pool is by removing college degree requirements from job postings if they are not absolutely necessary. Eliminating college degree requirements helps organizations open up opportunities to individuals who may have gained relevant experience or developed transferable skills through alternative means, such as vocational training or practical work experience.

Tip: Audit all recruitment content to ensure there isn’t exclusive language. For example, if the job doesn’t require a Bachelor’s in Science, remove it from the job description.

Clearly communicating the specific expectations to candidates can also help with reducing the influx of unqualified applications, while simultaneously attracting individuals who possess the same capabilities the company is seeking.

skills based talent management


Audit Skills within the Organization

Recognizing and addressing the organizational skills gap is the crucial first step in any skills development strategy. By identifying the areas where the workforce needs to improve in terms of skills and knowledge, companies can take proactive measures to bridge those gaps. This could involve implementing targeted training programs, hiring external experts, or partnering with educational institutions to provide relevant learning opportunities. 

Identifying transferable skills and creating accessible opportunities is another important aspect of fostering a skills-based hiring process. Instead of solely focusing on specific job titles or qualifications, organizations can look for skills that can be applied across different roles and industries. This is helpful for many job seekers who are looking for new opportunities after layoffs, or are looking to start their career in a new industry.

Also, implementing employee assessments as part of the hiring process can be an effective way to screen candidates for the skills and capabilities needed for a particular role. Employee assessments can take various forms, including written tests, practical exercises, or even behavioral interviews. Conducting assessments ensures that candidates are evaluated based on their abilities rather than relying solely on their educational background or previous job titles.

Understanding the skills gap allows organizations to develop a roadmap for growth and create a workforce that is better equipped to navigate the challenges of an increasingly dynamic market.


Continuous Learning and Development 

Continuous learning and development plays a pivotal role in skills-based hiring, revolutionizing traditional approaches to talent acquisition. By prioritizing the importance of ongoing education and creating opportunities for employees to acquire new skills, organizations foster a supportive environment that motivates individuals to continually grow and evolve professionally. Growing skills for the workforce becomes crucial in today's fast-paced job market, where skills can quickly become outdated and new competencies are constantly in demand.

One of the primary benefits of learning and development in skills-based hiring is its ability to future-proof organizations. As industries evolve and technologies advance, companies must ensure that their workforce possesses the necessary skills to navigate emerging challenges and embrace new opportunities. This enhances employees' marketability and job security and ensures that the organization remains agile and competitive in a rapidly changing landscape.

Also, learning and development initiatives contribute to a highly engaged and committed workforce. When employees have access to learning opportunities that allow them to acquire new skills and stay updated with industry trends, they feel valued and supported by their employers. In turn, this leads to increased job satisfaction, higher employee retention rates, and a culture of continuous improvement within the organization. When investing in the professional development of their employees, organizations create a sense of empowerment, fostering a positive work environment where individuals are motivated to perform at their best and contribute to the company's overall success.

skills based hiring


Have Data in Place

Having data in place is paramount when it comes to skills-based hiring in recruitment. Organizations gain a clear understanding of the skill levels within their teams and can identify any existing gaps by conducting a comprehensive audit of the current workforce. Internal assessment serves as a foundation for strategic decision-making, allowing organizations to determine the specific competencies needed to meet their business objectives and drive growth. Also, by collecting and analyzing data related to skills assessments, training programs, and performance evaluations, organizations can gain valuable insights into the impact of their initiatives. 

Having a data-driven approach allows for ongoing refinement and optimization of skills-based hiring practices, ensuring that the organization remains agile and responsive to evolving talent needs. With data in place, organizations can make informed decisions, adapt their hiring strategies, and align their talent acquisition efforts with the market's changing demands.

To effectively address skills gaps and foster growth within the organization, it is crucial to have robust data and tracking platforms in place. Once a company has visibility on this valuable data, targeted initiatives can be implemented to bridge the identified skills gaps and upskill employees effectively.


Stay Ahead of the Competition

Given the increased volatility in the market, businesses need to plan ahead and anticipate future skill requirements. When analyzing industry trends and staying informed about emerging technologies, organizations can proactively identify the skills that will be in demand. Having foresight enables companies to develop, source, and nurture the required skills internally, ensuring that they have a competitive edge and can adapt swiftly to changing market conditions. Also, hiring professionals will then be able to adjust recruitment strategies to include the necessary skills that will be in demand in the future. 



Skills-based hiring is “the future of hiring and development.” It’s essential to keep it in mind and begin to weave into recruitment practices and engrain it in company cultures. By fostering agility, organizations can navigate the market adeptly and come out on top. 

If you’re interested in learning how to implement skills-based hiring into your recruitment plans, the team at Recruitics can help! Since the way we work and candidate priorities are shifting quickly, staying up-to-date on trends is essential. The team at Recruitics is here to help your brand thrive in the new reality.

Subscribe to newsletter


Find Out How We Can Become an Extension of Your Talent Acquisition Team