Written by Lidia Vijga, co-founder at DeckLinks
How many times do we hear the phrase “Forget what you learned in school!” on our first day of work? Yet a four-year college degree continues to carry considerable influence for many employers as they seek to hire candidates with higher education from reputable institutions. The traditional approach to hiring has long been focused on the presence of a university or college degree, which unfortunately leads many talented applicants to be overlooked. Millions of people possess the necessary skills and aptitude for success yet cannot gain access to many jobs due to their lack of academic credentials. Degree-based hiring not only affects those people individually but can have negative consequences for companies and society as a whole.
It’s disheartening that if you simply google the term “credential,” the first example mentioned is “Recruitment is based mainly on academic credentials.” This simple search demonstrates how extensively accepted this concept has become!
While bachelor’s degree is no longer an essential component for success in today’s world, possessing one among college graduates still serves as a mark of distinction for the majority of recruiters. Despite what certain hiring managers may believe, there is no evidence to suggest that a bachelor’s degree can predict an individual’s ability to collaborate well and exhibit traits such as critical thinking, empathy, or proactivity.
What does skills-based hiring mean?
Skills-based hiring is talent acquisition that emphasizes selecting employees according to their range of skills and abilities, rather than concentrating on academic accomplishments or prior roles. Instead of characterizing the ideal applicant by their educational background or achievements, companies prioritize transferable skills and the potential for individuals to cultivate these skills within the professional environment and job role.
“Skills-based hiring also includes the ability to vet for soft skills needed for any profession. These include critical thinking, problem-solving, leadership, personal attitude, teamwork, work ethic, time management, intercultural fluency, public speaking, social graces, communication abilities, empathy, and career management. This is the area I called the secret sauce of talent acquisition. If you get this wrong, you’re going to have a lot of problems that range from productivity issues to low employee morale, and high turnover. It’s crucial to get it right especially in startups where every single hire needs to pull their weight, pivot quickly, and wear multiple hats. Recruiting is the perfect example of the importance of skills-based hiring. Recruiters don’t hold a BA in Talent Acquisition but it’s a real profession.”
Tricia (Grabfelder) Lucas
Co-Founder of Lucas Select
Director, Placement Services AT Recruiting in Motion
What’s the difference between skills-based hiring and degree-based hiring process?
The primary distinction between skills-based and degree-based hiring lies in the factors considered during the selection process. Skills-based hiring emphasizes a candidate’s practical abilities and proficiency in performing tasks, whereas degree-based hiring focuses on academic achievements, institutional prestige, and professional certifications.
Skills-based hiring benefits both employers and employees. Companies can identify suitable candidates much faster, reducing training expenses and shortening onboarding. While employees can transition between roles without losing any income. However, this does not render formal qualifications obsolete, as many positions still require specific skills, degrees or certifications. Yet skills-based hiring serves as a better strategy than degree-based hiring, catering to a range of job levels and industries.
“Resumes are poor predictors and may not accurately forecast an individual’s success in the company. Passion, attitude, and potential can outweigh the importance of credentials in predicting future achievements.”
Founder & CEO at HiredHippo
Founder & Recruitment Advisor at The Linkus Group Inc.
Top benefits of a skills-based hiring practices
Here are the top reasons why startups should harness the power of a skills-centric approach to hiring decisions and promotions.
Uncover untapped potential
Emphasizing skills over traditional credentials during the hiring process can reveal hidden abilities in applicants. For instance, self-taught software developers without formal education may have acquired the necessary programming skills through self-study, online courses, or practical experience. These individuals could possess the necessary programming skills that would have been overlooked by tech employers in conventional hiring processes.
“Software is such a great example of this, as so many of us entering the industry now are career changers. Not only have we shown the ability required to learn an entirely new skill, but we come with an array of useful skills from previous jobs that make us amazing employees.”
Self-taught Full Stack Software Developer AT Universe
Founder & Host AT Andrew’s Coffee Chats
Reduce employee turnover
Prioritizing skills in hiring process can ensure that new team members have the right abilities to excel, resulting in greater job satisfaction and reduced turnover. In contrast, hiring based on prestigious college degrees without considering the necessary soft skills might lead to struggling employees and increased attrition rates.
Boost Workplace Inclusivity
Focusing on skills can help foster a more diverse and inclusive workforce. For example, a company may have unintentionally discriminated against candidates from underrepresented backgrounds due to an overemphasis on traditional credentials. By focusing on skills rather than formal qualifications, startups can create more inclusive and diverse workforces, which has been shown to drive innovation and improve overall job performance.
Fostering a culture of continuous learning
A skills-first hiring practice encourages employees to focus on continuous learning and skills development. Startups that prioritize skills over traditional qualifications signal that growth and development are valued, and continuous learning is important. This approach fosters a culture where employees are more motivated to upskill and reskill, ultimately benefiting the startup by creating a learning-oriented environment and a more adaptable workforce.
Broaden talent pool
A skills-based hiring approach enables companies to access non-traditional talent pools, such as career-changers, freelancers, or candidates with non-linear career paths. For example, a company looking for a marketing specialist might find an ideal candidate to be someone with a background in journalism or even micro-blogging, who has developed the necessary skills through personal projects or freelance work. This approach can help companies find skilled and diverse candidates who might otherwise have been excluded from consideration due to their unconventional backgrounds.
Bridge the skills gap
With companies struggling to find qualified candidates who possess the necessary qualifications, many industries face a skills gap. By adopting a skills-first hiring practice, companies can prioritize candidates who demonstrate the competencies needed for the job, regardless of their formal education. For instance, businesses facing a shortage of skilled workers can invest in training programs for candidates with relevant aptitude and potential, addressing the skills gap more effectively than relying solely on traditional hiring methods.
Enhance Startup Brand
Startups that choose to implement a skills-first hiring practice are likely to be seen as forward-thinking and innovative by potential candidates. By making an emphasis on skills and continuous learning, a company can establish an attractive workplace culture that demonstrates its commitment to nurturing new talent and creating opportunities. This approach is sure to make a positive impression on potential hires as it prioritizes their growth over any other criteria.
At its core, a skills-based approach is about building talent rather than buying it. Establishing accessible pathways for new hires with diverse backgrounds is a crucial initial step. Furthermore, by prioritizing skills in the growth of existing employees and implementing a skills-centric attitude towards promotion, companies can advance previously overlooked talent. This straightforward shift within the company will increase racial and socioeconomic diversity across the entire workforce – from entry-level positions to leadership roles.
The future of work is skills
Embracing a skills-based approach to talent management is a powerful and transformative move. For far too long, the reliance on four-year degree requirements for job applicants has been a convenient but inefficient method that gave HR professionals a false sense of filtering out less-qualified applicants. However, data and experience have shown us that this is not the case.
By wholeheartedly adopting a skills-based talent management approach, companies can create a brighter future for both their employees and themselves. While transitioning to this approach may take time and resources, the rewards are undoubtedly worth it. A skills-centric approach brings a better alignment between job candidates and their roles, dramatically broadens talent pools, addresses skill gaps, and enhances internal mobility as well as employee dedication. This inspiring shift empowers individuals from diverse backgrounds, giving them the opportunity to shine, and ultimately contributes to a more inclusive and thriving work environment.