As hiring managers and talent acquisition professionals, we typically tend to prioritize previous employment and/or education when hiring. There are many reasons for this – our own conscious or unconscious biases, proven success of other candidates with similar experiences and education, lack of experience with people without a formal education, the display of a resume/CV, etc.
In today's rapidly evolving job market, however, the traditional hiring approach of prioritizing degrees and previous job titles is giving way to a more dynamic and inclusive model: skills-based hiring.
Also known as skills-first hiring, skills-based hiring emphasizes the specific abilities and competencies required for a job over traditional qualifications like degrees or prior job titles.
According to a study by LinkedIn, 69% of professionals believe that verified skills are more important than a degree when evaluating candidates. This approach allows companies to tap into a broader and more diverse talent pool, breaking down barriers that have traditionally excluded capable individuals based on their educational background or lack of specific job experience.
This paradigm shift not only ensures that companies are acquiring the best talent for the job but also plays a pivotal role in enhancing diversity within organizations.
Here’s a closer look at how skills-based hiring can be a game-changer in fostering a more inclusive workforce globally.
Breaking Down Barriers
Skills-based hiring is particularly effective in addressing the historical inequities in the labor market. By prioritizing skills over academic credentials or pedigree, companies can level the playing field for workers who may have been overlooked, including women, workers without bachelor's degrees, neurodivergent candidates, and younger people. This approach is essential for creating a more inclusive organization where diverse perspectives and experiences are valued.
For example, research from LinkedIn suggests that skills-based hiring can increase the proportion of women in the talent pool by 24% more than it would for men in jobs where women are underrepresented. This approach not only helps to break down barriers but also ensures that the best candidate for the job is hired, regardless of their background.
From LinkedIn Skills-First Report
Global Talent Acquisition
Skills-based hiring is not limited to local markets. With the rise of remote work and global teams, companies can now access a diverse pool of talent from around the world. Given the inequities in education around the world that exclude candidates by default, skills-based hiring opens the door to new possibilities.
In the Asia-Pacific region, for example, 79% of companies now look for skills first when hiring, compared to 21% that prioritize experience and education. This shift is driven by the need for high-volume hiring and an increased emphasis on skills training.
Indeed, the actual size of the talent pool increases significantly when the search is broadened from so-called qualified or experienced candidates only to appropriately skilled candidates. LinkedIn has quantified this increase, as seen in the example below.
From LinkedIn Skill-first report
Building Diverse Teams
When companies adopt skills-based hiring globally, they can build teams that are more diverse and better equipped to tackle complex challenges. In a US study, ethnically diverse teams are 35% more likely to financially outperform, highlighting the business benefits of a diverse workforce.
Similarly, in the Asia-Pacific region, companies prioritizing skills-based hiring are more likely to attract and retain diverse talent, leading to improved company culture and increased profitability.
The Agile Organization
The global market is changing faster and in more ways than ever before. Organizations that will compete and thrive are truly agile, and this agility will come from a highly skilled and engaged workforce ready to move quickly and adapt to the changing market.
The ultimate aim is to build skills in the workforce and to build a culture of continuous learning and growth.
Getting Started with Skills-Based Hiring
To get started, you must be clear on the skills and level of expertise required for those skills before starting your hiring process. You may need to educate internal stakeholders on this new prioritization and find a champion to help drive the change.
The Role of Employer of Record (EOR) Service Providers
EOR providers partnered with employers can provide a valuable bridge to implement a borderless, skill-based talent strategy. EOR providers with wholly owned direct entities, instead of utilizing partners, have better knowledge of the local talent markets and regional cultures and nuances. This can focus your efforts on finding skills-based talent and drive a more diverse population.
Further, more advanced EOR providers are building on the skills-based hiring approach to skills development. For example, at Atlas, we have partnered with Coursera for Business to offer over 9,000 courses to employees worldwide. Our clients can leverage this valuable resource for their talent to build a market-focused skills program in collaboration with staff.
Coursera’s Learner’s Outcomes Report—a survey of 55,000 learners across more than 90 countries—identifies improved performance and engagement as outcomes of continued learning.
Skills-based hiring is not just a trend; it’s a transformative approach that aligns with the future of work. Embracing skills-based hiring on a global scale facilitates richer cultural exchanges, innovative solutions, and sustainable growth in the international business landscape.