5 tips for switching to skills-based hiring

Hiring in the IT industry has traditionally relied on reviewing a candidate’s experience and education, with less focus on specific skillsets. But that approach is changing, with the emphasis on degrees and experience giving way to skills-first hiring strategies that put organizational skills needs first and foremost.

This shifting mindset in hiring is quickly growing in popularity for technical roles, according to a report from Test Gorilla, with 88% of tech companies reporting they’re using skills-based hiring to recruit new talent, and 89% of tech employers saying they’re satisfied with skills-based hires made in the past 12 months. There are several proven benefits to a skills-based hiring approach, including reduced mis-hires (97%), reduced cost-to-hire (84%), reduced time-to-hire (86%), improved retention (91%), and improved diversity (93%). 

While the benefits of skills-based hiring may be evident, especially as generative AI changes the skills equation, the bigger question is how can companies make this monumental shift and change their hiring processes. Here are five tips on how to adopt a skills-first approach to IT hiring. 

Start small, set clear goals

Before embarking on a skills-based hiring strategy, it’s important to have a clear picture of what the organization hopes to gain from making the switch, as well as the expected benefits for employees, leaders, and managers.

“Clarity on goals will help organizations design the right strategy and plan of action,” says Julie Bedard, managing director and partner at BCG, and global lead for the firm’s talent sourcing strategies. “It will also support change management, as many companies are surprised at how much is required to be successful.”

Rather than take on a big bang approach, Bedard suggests starting small. While implementing a skills-based approach across the organization all at once can work with enough leadership support, it’s often better to start with a group of jobs that an enthusiastic leader enthusiastic is looking for fill before rewiring all systems throughout the company, she says.

Ideally, Bedard says, businesses should zero in on an area where a skills-based approach can solve a real talent gap in a timely manner. BCG recommends beginning with a pilot program with a business or functional champion willing to experiment and advocate for that effort. Bedard says it’s best to start with a part of the business that’s hard to recruit for, or has experienced high turnover, which may be why many organizations begin with IT.

Identify and categorize the skills you need

Skills come in a variety forms, such as hard skills, which comprise the technical skills necessary to complete tasks; soft skills, which center around a person’s interpersonal skills; and cognitive skills, which include problem solving, decision making, and logical reasoning, among other skills. Before embarking on a skills-based hiring strategy, it’s vital to have clear insight into the skills your organization already has internally, in addition to all the skills needed to complete projects and reach business goals.

As you identify and categorize skills, it’s important to review job descriptions as well to ensure they’re up-to-date and don’t include any unnecessary skills or vague requirements. It’s crucial as well to evaluate how your job descriptions are written to ensure you’re drawing in the right talent for open roles. Wording job descriptions can be especially tricky when it comes to soft skills. For example, if your organization values someone who’s humble or savvy, you’ll need to identify how that translates to a skill you can list on a job description and, eventually, verify, says Hannah Johnson, senior VP for strategy and market development at IT trade association CompTIA.

Cataloging and identifying skills can be overwhelming, Johnson says, so it’s often best to start with entry-level and junior roles, which can provide a way for the organization to better understand the new hiring process and practices before moving on to mid- and senior-level roles where there’s more complexity around the skills required.  

Determine how to assess candidates’ skillsets

As organizations start looking more at skills over experience, they’re increasingly turning to certifications over degrees to verify whether candidates have the skills they need. The CompTIA Workforce and Learning Trends 2024 report states that organizations planning to significantly increase tech hiring are 1.5 times more reliant on industry-recognized technical certifications. Some of the top reasons for turning to certifications include meeting regulatory and compliance needs, offering a more up-to-date assessment of technologies than four-year degrees, and helping save time in skills-based hiring valuations of candidates. 

Historically, most hiring processes involve simply trusting a candidate when they tell you they have a specific skillset, especially for less technical roles. But as the focus moves toward hiring for skills over experience, it’s important to establish a solid way to validate and assess a candidate’s stated skills.

There are plenty of ways to objectively assess a candidates’ skills beyond certifications. Writing samples, skills assessments, and uniform tasks are common tools skills-first organizations use, according to Randi Weitzman, a technology hiring and consulting expert at Robert Half.

You’ll need to determine the right avenue for skills-assessment based on how technical the role is, and identifying which skills need to be validated prior to hiring. This is where skills categorization is vital, so you can have quick insights into the right course of action.

Keep degrees in check

An important step in embracing a skills-based hiring mindset is to ensure there’s no inherent bias around degrees. While degree experience shouldn’t be overlooked, most organizations will need to put less emphasis on them when hiring. Additionally, the longer it has been since someone completed a degree, the less their degree-specific education will impact what they have to offer potential employers. By a certain point, they’re most likely growing skills in other ways, or will have knowledge incompatible with what’s required today compared to what they had upon graduating.

“Generally speaking, companies should assess their open positions and consider whether a degree should really hold more weight than skills or years of experience,” says Weitzman. “For example, if a candidate has had extensive hands-on experience utilizing a specific set of skills, then they could be highly considered for the job, regardless of whether they have the education.”

When evaluating your job descriptions, be mindful of roles that list degrees as requirements when it might not be necessary. By requiring degrees, you immediately disqualify around 62% of Americans, or nearly two-thirds of the talent pool, according to a report from Burning Glass. Plus, with a growing focus on equity in the workplace, it’s important to recognize that higher education is not always possible for people, especially as it often requires a high level of financial burden.

“The cost of higher education has continued to rise over the years, making it financially unfeasible for some to pursue a degree,” adds Weitzman. “By making a college degree an essential requirement for a position, companies risk excluding large pools of skilled candidates, including from underrepresented groups.”

And it seems companies are getting the hint. From 2014 to 2023, Burning Glass states there was an almost fourfold increase in the annual number of roles from which employers dropped degree requirements. And for organizations that did, they found non-degreed candidates hired into these roles have a 20% higher retention rate than their college-educated coworkers.

Create a holistic approach to skills development

The focus on skills shouldn’t start and end with hiring. Rather, it should become a company ethos where skill development is championed and encouraged. Organizations need to invest in internal upskilling and reskilling programs to help employees grow and develop their careers. Investing in learning opportunities for your employees can be mutually beneficial as it fosters loyalty with employees and helps companies fill skills gaps as they arise.  

“Learning is the new loyalty program, so a skills first approach doesn’t end at hiring,” says CompTIA’s Johnson. “It’s about nurturing talent continuously. But what a skills-first approach allows organizations to do is have an intention behind that continuous learning culture.”

You’ll need to continue to nurture the talent you bring in, and the skills-based mindset is something that will need to become a core element of the company culture. It’s important to create more opportunities for employees to grow and develop their skills internally through professional development courses, certifications, bootcamps, workshops, and internal upskilling programs.

“There’s likely people within the organization who are craving additional responsibility and want to learn new things,” adds Johnson. “I would always recommend giving them a shot and invest in who’s at your organization right now. The best career ladder has rungs in every direction.”