The rise of skills-based hiring: prioritising potential over experience

The world of work is constantly evolving, and with it, so are hiring practices. Skills-based hiring – where employers base their decision on how strong and relevant an applicant’s skillset is, as opposed to requiring a specific degree or a set number of years’ related experience – is rapidly growing in popularity. Four in five (80%) employers would now consider hiring a candidate without all the required skills but with strong potential to progress, with the intention of upskilling them, an increase from 73% who expressed the same sentiment last year, according to our 2024 Salary and Recruiting Trends Guide.

Skills-based hiring resolves talent gaps and fuels long-term success

With skills gaps showing no signs of subsiding for the overwhelming majority (92%) of employers, many are adjusting their workforce planning strategies and adopting skills-based hiring methods to build high-performance teams. After all, skills shortages usually spell bad news for employers: negatively impacting productivity for 52%, lowering employee morale for 48%, and reducing the ability to deliver projects for 42%.

Skills-based hiring is a popular solution to these challenges, with the increased flexibility around education and experience levels potentially opening up employers’ vacancies to outstanding talent that they may have otherwise overlooked. Furthermore, an applicant who fits all the requirements of a role ‘on paper’ may not be the perfect fit in reality, since professional experience doesn’t always directly correlate with suitability for a role. Their soft-skills or motivations may be falling short, for example, whereas a robust and transferable skillset can often serve as a solid foundation for long-term success.

Tech employers value transferable skills as the industry rapidly evolves

It should be noted that the most suitable hiring approach can depend on the specific industry and role in question. It’s important for professionals working in certain vocations, such as doctors, engineers or therapists, to build up workplace experience – and certain professions will, of course, always require a degree.

However, for industries where there may be a lack of candidates with prior experience, skills-based hiring can be extremely effective. Tech is a prime example of where it’s beneficial to hire for mindset over skillset, as the industry is continuously evolving at a rapid pace, so finding candidates with many years of experience in a relatively new technological development is simply impossible. Therefore, employers would likely benefit from judging transferrable skills rather than prior experience.

Since tech is a key industry that would feel the benefits of skills-based hiring, our experts primarily provide talent in this space, as well as project management. We’ve placed professionals across the following disciplines within leading organisations: cloud engineering, data analysis, DevOps engineering, software development, software testing, and more.

Hiring for potential can diversify your talent pool

Some employers are finding that exploring alternative hiring methods is an effective way to attract and cultivate a more diverse workforce, since the cost of higher education may not be financially viable for some people. By shifting the focus away from rigid degree-requirements – instead focusing on skills and potential – organisations are providing a less costly alternative to the traditional route into the workforce, therefore appealing to a wider and more diverse talent pool.

Skills-based hiring can also bring to light some undiscovered talent groups that may have had a less linear career or education path, including ex-forces personnel, professionals who are returning to work after a career break, people who were formerly homeless, those with previously held convictions, and more. As employers continue to drive more inclusive hiring practices, they’re discovering the outstanding and varied talent of these groups, shunning former attitudes that historically resulted in exceptional candidates being overlooked. Past methods of selecting a shortlist of candidates with almost identical CVs – casting certain demographics into the ‘automatically rejected’ list if their experience and education did not meet rigid requirements – are fading as inclusive hiring practices prevail. As a growing number of employers become open to skills-based hiring, more organisations will be able to discover the true potential of these undiscovered talent groups.

How should you approach skills-based hiring?

When carried out effectively, skills-based hiring has the potential to future-proof your talent pipeline and set your workforce up for long-term success. However, when implemented ineffectively, it can leave you battling the same challenges: lengthy recruitment processes, costly mis-hires and damaging talent shortages. So, how can you ensure your next skills-based hire is a successful one?

• Remove any unnecessary requirements from your job adverts, instead highlighting desired skills and using it as an opportunity to sell the role to potential applicants rather than deterring them.
• Encourage applicants to give examples of their soft skills in practice, otherwise they may list a set of skills on their CV without any context or evidence. You may consider implementing soft skills tests to overcome this barrier and ensure applicants are able to demonstrate their potential effectively.
• As the world of work continually evolves, the most valuable skills will inevitably shift. As an employer, you need to keep pace and be willing to adapt your hiring practices and priorities accordingly.
• During interviews, focus the line of questioning on core skills, rather than on prior experience. Competency-based questions that test communication, adaptability and teamwork abilities, for example, can give you good insight into whether or not an applicant’s skillset could be transferrable and a good foundation for success at your organisation.

The rise of skills-based hiring doesn’t look likely to slow down anytime soon, with a growing number of employers realising it could be the solution to their recruitment challenges. If you’ve been struggling to source top talent for quite some time, it’s likely that your hiring strategy is due an overhaul – with so many employers in sectors such as tech, business support, social care and HR already getting onboard with skills-based hiring – why not see if this could also be the solution for you?

If you’re unsure where to begin with skills-based hiring and workforce planning, our experts are here to help. To discover how we can help your organisation overcome skills shortages and find the best-in-class undiscovered talent, read up on our Skills and Learning Academy Programmes.