In a rapidly evolving business environment with a competitive talent marketplace, your organization’s skilled workforce is your most powerful differentiator. Finding and tapping the skills you need—and recruiting and retaining that talent—is critical to the success of any organization.
That’s why more companies are embracing a skills-first hiring strategy, which expands the available talent pool, increases the quality of applicants to roles suited to their skills and potential, and significantly improves employee retention.
These organizations are finding qualified candidates more easily, filling roles faster and with more qualified and motivated applicants, reducing mis-hires, and building more inclusive cultures, according to “Embracing a Skills-First Mindset,” the 2023 hiring manager research by OneTen, a coalition of chief executives and organizations committed to facilitating the hiring and advancement of Black individuals and others without four-year degrees.
What is a skills-first hiring strategy? It’s an approach that prioritizes candidates’ demonstrable skills and potential over a more traditional four-year degree as a proxy for talent. Beyond significantly broadening the applicant pool available to employers, the strategy also removes barriers between job candidates and jobs that require more than a high school diploma but less than a four-year college degree, or middle-skilled careers: a once-reliable driver of economic mobility that in recent decades has shifted largely to a labor pool of candidates with four-year degrees.
A hiring strategy that emphasizes skills and potential in this way can benefit applicants from historically underrepresented communities to find family-sustaining jobs while helping organizations achieve their diversity, equity, and inclusion (DEI) goals.
The Skills-First Mindset
Many hiring managers are reporting difficulty in sourcing qualified candidates. And some who say they recognize the benefits of a skills-first hiring strategy have not yet fully committed to making the shift, according to the research.
However, skills-first hiring can greatly benefit those organizations willing to change customary practices and mindsets currently keeping them from implementing the strategy.
While 77% of hiring managers in the research reported difficulty sourcing qualified job-ready candidates, those applying a skills-first hiring approach found it twice as easy to find qualified candidates as those who did not. Using a skills-first hiring strategy enabled managers to hire better-qualified and more motivated candidates, hire more selectively, and fill roles more quickly. Some 79% said skills-first hiring helped them reduce mis-hiring, and 62% said it helped create a more diverse and inclusive workforce.
Still, while most hiring managers said they are using skills-first hiring for at least some positions, fewer than one in five use the strategy for all or nearly all positions. Organizations apply the strategy primarily in hiring for hourly roles.
And most managers who are using skills-first hiring practices lack college degrees themselves. More than two-thirds said they’ve rewritten job descriptions to emphasize skills, but about a third had removed degree requirements from job descriptions or screening algorithms. Only 36% explicitly encouraged applicants without college degrees to apply.
The evidence suggests that many hiring managers believe a degree indicates a candidate has soft skills employers need, like communication or critical thinking. More than four out of five hiring managers surveyed called those skills important to the hiring process. “A college degree will indicate that [an applicant has] some of the skills needed for the job,” one respondent said, “including interpersonal skills, decision-making, and good communication skills.”
However, organizations can add skills testing or other assessments of soft skills to their recruitment process while gaining the benefits of a skills-first hiring strategy. And those benefits can be significant.
A recent Deloitte Insights report said organizations with a skills-first hiring approach to talent are 107% more likely to place talent effectively, 98% more likely to retain high performers, and more likely to build reputations as great places to grow a career. Two-thirds of workers say they would be more attracted to join—and more likely to remain at—an organization that values and makes decisions based on their skills rather than on their previous jobs and degrees, Deloitte reported.
Getting Started with Skills-First Hiring
Even organizations that are not ready to transition fully to skills-first hiring practices can see a positive effect from limited adoption of the strategy. Nearly all the surveyed hiring managers who have explicitly stated that applicants without college degrees are encouraged to apply have seen positive results, as have most who have rewritten job descriptions or updated screening tools to focus on skills rather than credentials or experience.
While the benefits of enacting a skills-first hiring strategy are abundantly clear, hiring managers may need external expertise to put their good intentions into practice. Teaming with skills-first hiring specialists can help these managers expand their talent pools and increase their access to high-quality candidates. Introducing skills-first hiring expertise can help your organization increase retention rates and business performance—and play a crucial role in creating a more equitable and inclusive workforce.
Power your skills-first hiring strategy with OneTen.
