Redefining Recruitment: The Advantages and Challenges of Skills-Based Hiring

BY Emily McCrary-Ruiz-Esparza | August 12, 2024

The HR industry is abuzz with a new phrase, “skills-based hiring,” but according to recent research, relatively few employers are actually following through with it. Why the gap? One major factor is inertia–hiring managers just keep doing what they’ve done in the past.

For companies that hire white-collar workers, employers have been slow to look past four-year degree requirements and Fortune 500 employment pedigrees. Even for frontline workforces, where four-year degrees aren’t typically required, hiring managers may favor familiar brand-name employers, specific training programs, or familiar resume histories. The results are much the same.

Now, companies are turning their attention to skills-based hiring in which capabilities and potential are given greeter credence than any professional pedigree. How skills-based hiring and talent management affects the frontline workforce was the topic of discussion during a recent From Day One webinar on the advantages and challenges of skills-based hiring.

Getting Started With Skills-Based Hiring

Nicole DeLue joined DISH Network, the satellite TV company, about nine months ago. As the new head of talent acquisition and frontline recruiting, one of her first projects has been overhauling the company’s recruitment process. Not an easy feat for a company that hires more than 800 locations. To boot, DISH hadn’t updated its hiring practices in two decades. Her goal has been to update the process into one that prioritizes skills and potential over employment history.

Up against a stale process and long-held habits, DeLue evaluated the entire employee experience from application to talent development. “It was important for me to peel back the layers for the end-to-end candidate and employee lifecycle,” she said. “I wanted to take a deep dive and understand, what are we attracting for? How are we evaluating those skills? And are we actually developing those skills? Is what we’re attracting and qualifying candidates for is what we’re actually developing? Are employees being evaluated on the skills they’re being hired for?”

The move to skills-based hiring helps level the playing field for applicants, and for the business, it helps solve the ongoing problem of talent scarcity. “The workforce has really changed over the past couple of years,” said panelist Lori Mix, SVP of talent acquisition at customer experience outsourcing company ibex. “Some specialized areas, like healthcare and finance, have moved to the skills space because there just aren’t enough workers.”

Prioritizing skills and potential is also good for the bottom line, Mix pointed out, because it equips the company to grow and adapt in the future. “We want to have choices and give people opportunities to come into the company,” she said. “And as we grow, and are solving our customers’ hiring problems, we want to put people in that are going to be good leaders down the road. So we have to make sure we’re hiring the right skill set from the get-go.”

Journalist Emily McCrary-Ruiz-Esparza spoke with Dan Sapir of JobGet, Nicole DeLue of DISH Network, and Lori Mix of ibex during the From Day One webinar (photo by From Day One)

Dan Sapir, general manager of frontline job platform JobGet, says this new approach to hiring has proven to motivate and energize a part of the workforce whose upward career potential has long been limited. “What we see in our own ecosystem is that as we expose job seekers to jobs that they had no clue they’d be a good fit for, they’re more excited to apply. They’re more excited when they go through the application process. And when they talk to the hiring team, they come off more personable. And because they’re more excited about that role, they stick around for a longer time.”

Breaking Old Hiring Habits to Find the Best Candidates

Skills-based hiring is still a relatively new practice for many organizations, and many recruiting leaders have a long road of habit-breaking ahead of them.

DeLue found that hiring managers at DISH were so involved in the hiring process, some were even reviewing resumes. Not only is that a time-waster, it can bias the managers, who may be inclined to evaluate candidates on past employers or jobs rather than future potential.

Now, she’s waiting until the interview stage to show candidate profiles to hiring managers, and they’ve experimented with removing candidates’ names and previous employers altogether.

“There are so many different ways that you can do it, but I think that it boils down to instilling confidence in your customer,” she said. “It’s about getting alignment on the skills you’re screening for, and not the profile. The minute that you let [managers] go back to ‘they worked at this company, and we just had five people a trip from that company,’ you’re going to get in that vicious cycle.”

At ibex, Mix uses resumes to start conversations that can help her evaluate sought-after skills. For instance, she doesn’t let an employment gap disqualify an applicant. “There are so many life events and real-world issues driving reductions in force and employment gaps. I want to leverage the interview by focusing on what their attitude is on overcoming all those challenges,” she said. The company needs people who are good at problem-solving, are quick thinkers, have good attitudes, and possess the flexibility to overcome challenges—these aren’t skills that can be deduced from employment history.

Skills-based hiring expands the internal talent pool as well, making it easier for the company to recruit and retain from within. To this end, ibex has coaching and mentorship programs that open workers to new jobs and careers with the company. “Our frontline workforce understands that they can take different paths,” Mix said. “They can pursue the leadership trajectory or they can be a subject matter expert, but either way, you know that there’s growth potential.”

In frontline jobs, where turnover is typically quite high, giving workers the opportunity to move around can keep them there for longer. Career growth is a retention strategy, JobGet’s Sapir says. “There are a lot of job seekers that have transferable skills from one role to the next, and the more you can encourage them to look at other opportunities that they could be a great fit for, it actually helps make your company sticky.”

Sapir pointed out that as promising as skills-based hiring is, workers and job seekers aren’t accustomed to this new way of doing things. Used to traditional job requirements, they may be self-selecting out of great positions, so companies need to budge their audience, he said. “You want to encourage more people that, if you think you’re a good fit for some of this stuff, please apply.”

Editor’s note: From Day One thanks our partner, JobGet, for sponsoring this webinar. 

Emily McCrary-Ruiz-Esparza is a freelance journalist and From Day One contributing editor who writes about work, the job market, and women’s experiences in the workplace. Her work has appeared in the Economist, the BBC, The Washington Post, Quartz, Fast Company, and Digiday’s Worklife.

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