Many positions remain vacant in the workforce, even though there are qualified workers available, which is why many companies are removing degree requirements and relying heavily on skills-based hiring. 

During a From Day One webinar, Dan Miller, solutions architect for SHL discussed how skills-based hiring is transforming the workforce. In a conversation moderated by journalist Emily McCrary-Ruiz-Esparza, Miller shared why it's a better approach for companies to acquire new talent.

While the resume remains an important tool, the days of gaining job candidate’s qualifications solely from a resume are gone. A skills-based hiring approach provides organizations and workers numerous benefits. 

Hiring managers can look at applicants’ LinkedIn profiles and other accompanying information to learn more about the worker and make an inference. “[Skills-based hiring] involves inferring someone’s skills based on their previous experiences and what’s been posted,” Miller said. In other words, rather than looking at just the resume, managers can look at the bigger picture before they come to a conclusion. 

According to Miller, the first step to prioritizing skills is removing educational requirements from job postings, which sets the stage for further changes to the hiring process. To further implement skills-based hiring, organizations should define key skills and competencies for each role, use assessments and testing to determine skill level, utilize AI-powered hiring tools, and train hiring managers on what to look for.

Companies struggling to keep workers long-term benefit from a 20% higher retention rate over two years when utilizing skills-based hiring, says Miller. Workers gain access to higher paying  jobs, and receive an average pay increase of 25% without a college degree.  

“Given the high costs associated with attrition, skills-based hiring confers business impact  even beyond expanding the size of the eligible talent pool or demonstrating a commitment to social progress,” according to the Harvard Business School. “Skills-based hiring strategies are designed for the roles that fall in between those where degreed and non-degreed workers have long labored together and where the degree is a matter of employer preference and not of necessity.” 

These benefits demonstrate the positive impact of skills-based hiring on both employees and organizations. Organizations implementing skills-based hiring methods are doing so for three reasons: agility, agency, and equity, says Miller. 

Agility involves having employees who can fluidly transition to different areas and positions, enabling companies to effectively utilize internal candidates. Agency empowers individuals to shape their own career paths by recognizing and developing measurable skills for future roles. Equity ensures that all qualified candidates are considered for open positions, helping to prevent discrimination in the hiring process.

“There’s overarching reasons that skills are becoming important. Part of it is that roles are rapidly evolving,” said Miller. “It is a shift from work-focused to person-focused,” he said.  

As companies shift toward skills-based hiring, it's essential to understand the skills necessary for success in each role. Miller said SHL's Global Skills Assessment, which collected data from over 10,000 individuals, identified various skills indicative of success at work. Some companies will need personalized skills to fit their roles and positions. These skills include taking action, striving to achieve, establishing credibility, taking ownership, among others. 

When skills-based hiring is done right, both companies and applicants experience the benefits. Companies secure capable workers for essential positions, potentially for years to come, while applicants and employees have the opportunity to earn higher wages and develop skills that advance their careers both within the company and beyond.

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

Mary Jones is a freelance writer out of Ohio. Her work is featured in several publications including The Dallas Express, NDash, and The Daily Advocate.