What if skills-based hiring doesn’t work?
A lot has been said and written in the last few months about the era of skill-based hiring. We have seen catchy titles stating that degrees are losing their value in comparison to competitive skills, and so on, until this report came up and changed what we thought until today. Is this practice in hiring a promise or reality? Let’s dig deeper.
Although many employers have publicly committed to removing degree requirements from job postings to promote skills-based hiring, the transition from traditional degree-based hiring practices to genuine skills-based hiring is complex and gradual.
This is our first interpretation of reading the report by Harvard Business School and Burning Glass Institute.
They analyzed more than 11,300 roles at large firms, defined as a given occupation at a given employer, for which there was a meaningful volume of hiring for at least one year before and after a firm removed a degree requirement.
This data was gathered from the Burning Glass Institute’s database of the career histories of 65 million US workers.
TL;DR is that companies are all about words and promises, but they feel insecure about implementing a skill-based hiring process without first observing results in other companies. And that’s okay. Let us explain more.
Contents
Skill based hiring as the promised land
45% of firms that communicated that they follow a skill-based hiring approach had no meaningful difference in their actual hiring behavior after removing stated degree requirements, according to the report.
If you consider that, at the same time, 18% of firms were identified as backsliders – firms that initially made progress in hiring non-degreed workers but later reverted to previous patterns – this raises questions about the effectiveness of this hiring strategy or the challenges that may arise.
While there is a notable increase in the number of roles for which degree requirements have been dropped – 97,000 incremental non-degreed hires occurred in 2023 – this has only translated into a modest increase in the hiring of non-degreed candidates (+3,5%).
Out of 77 million yearly hires, the above equals to 1 in 700 hires last year
Furthermore, the impact of these changes varies significantly among employers, with only a portion making tangible changes to their hiring practices that align with a skills-based approach.
What if skills-based hiring doesn’t work in the end?
Deep down, most companies are hesitant to take risks. The idea of skills-based hiring may appear promising, but what if it ultimately fails?
Companies tend to prefer following suit rather than experiencing the hardships themselves.
So, how do you move to skills-based hiring while also mitigating any risks in the process?
The shift to a skills-first approach begins with organizational changes and tangible outcomes. Part of this discussion involves not only the executives but also the HR professionals who will be responsible for the hiring process.
By providing proper training to the HR team, defining specific qualities and targets, and measuring the outcomes, this process could be very fruitful and change the dynamics of the workforce.
Still, if you follow this practice and do not achieve the positive outcome you were aiming for, there is a lot to learn from this experience.
For a company that finds skills-based hiring not as effective as expected, it may need to revisit and adjust its approach.
This could involve enhancing skills assessment techniques, integrating educational qualifications where necessary, or improving ongoing training and development programs to bridge any gaps.
It’s also important to collect feedback from the hiring process and outcomes to identify specific areas of improvement.
The key is flexibility and willingness to adapt hiring practices to align with both the company’s needs and the evolving workforce landscape.
Transition to the skill-based hiring process
About half of the employers continue to hire candidates with degrees at the same rate as before, despite removing educational requirements from job listings.
Construction Managers, Sales Supervisors, Web Developers, IT Help Desk Specialists, and several clerical positions are among the professions that would benefit from a skills-first approach.
If you believe it’s about time to make the transition, here’s a strategy you can use to increase your talent pools and make skill-based hiring a priority.
Adjusting hiring processes
Moving from degree-based to skills-based hiring requires significant adjustments to existing hiring processes.
HR managers must develop new methods to assess and validate skills, which may not be as straightforward as verifying educational qualifications.
Reevaluating job descriptions
HR managers need to reevaluate and possibly rewrite job descriptions to focus on skills and competencies rather than educational requirements.
This involves a thorough understanding of the skills needed for each role and the ability to communicate those requirements effectively in job postings.
Implementing new assessment tools
To accurately assess candidates’ skills, HR managers might need to implement new assessment tools and technologies.
These tools can range from practical tests and simulations to digital platforms that evaluate candidates’ skills through various tasks.
Training hiring managers
Hiring managers who are accustomed to evaluating candidates based on their educational background may need training to shift their focus to skills and competencies.
This includes developing an understanding of how to interpret non-traditional indicators of skill, such as projects, experiences, or online courses.
Overcoming bias
There may be inherent biases toward candidates with traditional degree qualifications. HR managers must work to overcome these biases within their teams and ensure that hiring practices are truly skills-based.
Ensuring consistency
As skills-based hiring is more qualitative than degree-based hiring, maintaining consistency in evaluation across candidates and roles can be challenging.
HR managers need to establish clear criteria and processes to ensure fairness and consistency.
Long-term integration
Successfully integrating skills-based hiring into long-term HR practices requires more than just changing job ads. It involves a cultural shift within the organization to value skills and competencies as much as, if not more than, formal education.
Measuring impact
HR managers must also develop methods to measure the impact of skills-based hiring on the organization, from the quality of hires and team performance to diversity and employee retention rates.
Things in business are fluid, as you already know. There is no one-size-fits-all approach to the skill-based hiring process. Defining whether your company needs more adaptive skill sets or the authority of a university degree is a good starting point.
Frequently asked questions
- What does the Harvard report say about the success of skill-based hiring?
- The report indicates that 45% of firms showed no significant change in hiring practices after removing degree requirements, questioning the effectiveness of skill-based hiring.
- How many firms reverted to previous hiring practices?
- 18% of firms, labeled as backsliders, initially made progress in hiring non-degreed workers but later reverted to their old ways.
- Has there been an increase in hiring non-degreed candidates?
- Yes, there was a modest increase, with 97,000 incremental hires in 2023, translating to just a 3.5% rise in the hiring of non-degreed candidates.
- What roles could benefit from a skills-first approach?
- Roles like Construction Managers, Sales Supervisors, Web Developers, IT Help Desk Specialists, and clerical positions could benefit significantly.
- How can companies effectively transition to skill-based hiring?
- Companies should adjust hiring processes, reevaluate job descriptions, implement new assessment tools, train hiring managers, overcome bias, ensure consistency, and measure the impact of this approach.
