Imagine a world where your career is determined by your talent and skill, instead of the college you went to or the people you know. Here, the self-taught software programmer or digital marketer has as good a chance at getting hired as a graduate from a premier institution.
Surprised? This scenario isn’t a fantasy, but the emerging reality with skill-based hiring.
The shift first began with profile-based hiring, where there was a focus of education, qualifications and experience of candidates. Profile-based hiring gave candidates more exposure to companies. It also allowed industries to hire from a wide talent pool and scale up operations immediately.
In short, profile-based hiring revolutionised modern day recruitment industry.
But now, the recruitment industry is headed for another big reset: the rise of skill-based hiring.
There are multiple reasons for the shift to skill-based hiring. We will delve deeper into it in the later part of the blog. But for job seekers and employees, it’s time to recalibrate.
Over the course of this article, we’ll talk about skill-based hiring, its growing popularity and what this means for job seekers. Finally, we’ll cover the steps job seekers like you can take to adapt to skill-based hiring.
What is Skill-based Hiring?
Simply put, skill-based hiring is the about hiring candidates for what they can do.
In skill-based hiring, employers can directly evaluate a candidate’s skill set by using tests and assessments. Ideally, if candidates pass the skill assessment, they can qualify for a job even without a formal degree.
By including candidates without a formal education, it widens the talent pool, creating a more inclusive hiring process.
Imagine a software company that’s hiring for a Web Developer role. Rather than shortlisting only those candidates who have a Bachelor’s degree in Computer Science, they invite applications from anyone who is proficient in computer programming.
For skill-based hiring, recruiters might use coding tests, portfolio reviews, or project-based assessments to gauge the candidate’s skill level.
Why Is Everyone Talking About Skill-based Hiring?
There are many reasons why skill-based hiring is gaining popularity. In traditional profile-based hiring, recruiters made a reliable guess about your suitability for a job based on your educational qualifications and work experience.
But that approach is increasingly old-school. Here’s why.
Reasons for the Rise in Skill-based Hiring
- Degrees ≠ Skills:
Many entry level jobs have a college degree as a basic requirement, leading to ‘degree inflation’. Many students are getting degrees not to learn, but simply to get jobs. The result is that an academic degree doesn’t always guarantee that a candidate has the skills necessary.
- The e-learning Revolution:
In the past couple of decades, there has been a steady rise in Massive Open Online Courses (MOOCs) and online learning. MOOCs have democratised learning. People have started learning outside of traditional pathways, forcing industry to focus on skills over education degrees.
- Changing Employment Landscape:
The rise of the gig economy has changed the nature of employment. People are taking up multiple part-time jobs and are working as freelancers. Overall, people are taking up shorter employment stints.
The result? A candidate’s employment history is not a reliable indicator of their skills, making skill-based hiring more relevant.
- The Need for Adaptability:
Traditional profiles don’t always show the skill of the employees. Consider a software engineer who graduated a decade ago. They might seem like management material, but do they know Python or React? It’s hard to tell just by looking at their profile.
Skill-based hiring removes some of the guesswork in the hiring process.
Traditional Qualification vs Skill-Based Hiring
Both profile-based hiring and skill-based hiring have their own benefits and challenges. For instance, profile-based hiring is a time-tested method, but skill-based hiring provides access to a more diverse talent pool.
We’ve made a table so you can easily compare the benefits and challenges of each approach.
Benefits and Challenges of Profile-Based Hiring
| Criteria | Pros | Cons |
| 1. Established Framework | Well-defined and time-tested method with set standards. | May inadvertently support biases and outdated views. |
| 2. Institutional Credibility | Degrees and institutions provide a quick gauge of credibility. | Over-reliance can mean missed talents from non-traditional backgrounds. |
| 3. Holistic Assessment | Takes into account the entirety of a candidate’s educational and work journey. | May be more time-consuming and less focused on current abilities. |
| 4. Simpler Shortlisting | Easier to screen candidates based on familiar parameters. | Potential for stagnation, relying on same types of candidates. |
Benefits and Challenges of Skill-Based Hiring
| Criteria | Pros | Cons |
| 1. More Inclusive | Opens doors for a diverse range of candidates irrespective of formal education. | Requires a shift in hiring mindset, possibly challenging to implement initially. |
| 2. Practical Evaluation | Directly tests the skills needed for the job. | Might miss out on candidates’ soft skills or other intangibles not directly tested. |
| 3. Reduces Bias | Focus on skills can help bypass personal biases associated with schools, background | Demands well-designed tests to ensure true objectivity. |
| 4. Faster Onboarding | Candidates are already vetted for necessary skills, potentially streamlining the onboarding process. | Limited historical data on candidates may make cultural fit assessments more challenging. |
| 5. Flexibility | Can easily adapt to emerging job roles and industries. | Could become too narrow in focus, missing broader aptitudes. |
Redefining the Hiring Landscape: Industries Leading the Shift to Skill-Based Hiring
Across the globe, the IT industry has taken the lead in de-emphasizing traditional degree requirements. Companies like Accenture and IBM have made the news for successfully educational degree requirements for advertised positions.
For example, IBM announced that only 29% of their positions required a formal qualification. Similarly, only 43% IT job postings at Accenture contained a formal degree requirement.
Interestingly, India’s IT industry is also changing. At least 7% of all non-tech engineering graduates were hired by the IT sector.
Current Qualification Preferences in the IT Industry
Any Graduate: 59%
Tech Graduate: 37%
Graduation Not Required: 4%
The narrative is clear: the IT industry is becoming inclusive when it comes to hiring talent. The strategy signifies a progressive trajectory for the Indian IT landscape.
There are two driving factors behind this change in the IT industry:
Supply vs Demand Imbalance: India is feeling the talent crunch in IT. The scarcity of traditionally qualified talent has pushed companies to relax formal qualifications.
Ease of Assessment: ‘Hard skills’ or ‘technical skills‘ are far easier to assess in the IT industry when compared to other sectors. It’s easier to test a software programmer’s proficiency on the spot than in marketing or finance.
Why Skill-based Hiring Makes Sense
The most obvious benefit of skill-based hiring are candidates like you. Here’s four reasons why
1. Equitable Hiring.
The shift to Skill-based hiring creates a more equitable job market.
Imagine Shyam, a young, talented computer programmer from a Tier-II town. This candidate has a passion and talent for computer programming, but never got a chance to study beyond high school. Skill-based hiring has the potential to provide candidates like Shyam a shot at getting employment.
2. Hire for Specific Positions.
Skill-based hiring gives you a better chance of finding the right candidate for the job. This requires a rigorous definition of the skill requirements for a role. But once that’s done, you’re all set!
3. Improving Job Performance.
Various studies show that when candidates are hired based on skill, they feel more empowered to succeed in their role. According to a Mckinsey Study, skill-based hiring is five times more effective than education and twice as effective as work experience in predicting job performance.
4. Embracing Diversity.
Hiring for skills is one way to increase the diversity of hiring in an organisation. For instance, an organisation can have an inclination towards hiring exclusively from Tier-I institutions or a gender bias for roles. Skill assessments are the best bet to widen the talent pool.
How Can Job Seekers Embrace Skill-based Hiring?
Take up Continuous Skill Assessment.
Taking up various skill assessment tests is the best way of staying on top of the requirements for a particular job.
Identifying and Honing Transferable Skills
Transferable skills, also called “portable skills” are abilities that apply to a wide variety of different jobs and industries.
Unlike job-specific skills, transferable skills are universal. They are useful regardless of the role and industry. For example, effective communication, leadership, problem-solving, and adaptability are all transferable skills because they’re valuable in most job settings.
Transferable skills are versatile, allow you greater career flexibility and are a foundation for continuous learning.
Approaching Skill-based Hiring as a Job Seeker
1. Identify Your Core Skills and Strengths
Read through job descriptions of various roles to understand common skills companies are looking for. Then sit down and map your own strengths. Are you a better software developer than a project manager? Is email marketing something you are interested in? List all of them down!
2. Fill in the Skill Gaps
Once you’ve identified the gaps in your skillsets, look for ways to upskill yourself. Embrace a mindset of continuous learning and self-improvement.
Remember, not all learning happens in a classroom.
There are several websites like Udemy and Coursera which offer online courses with paid certifications. Attending seminars, workshops and networking groups are other ways to upskill yourself.
3. Show Your Skills Effectively
The traditional method of presenting your skills on your resume isn’t enough. Here’s some quick ways to effectively showcase your skills.
- Consider adding a separate skills section to your resume. This increases your chance of standing out to recruiters.
- Back up your skills with evidence. There’s a difference between saying “project management” and saying “Led a team of 5 people in executing a project”.
- Link your digital profile with online certifications. Our talent management platform allows you to add Skillyst badges that increase your chances of getting recruited. It’s one of the easiest ways to show your skills prominently on your job profile.
4. Build a Digital Presence
The best way to stay updated with industry trends? network, network, network.
- Update your LinkedIn Profile. Use professional networks to showcase your skills and achievements and engage with your peers.
- Show your skills, don’t just talk about it. Building a Portfolio or Personal Website is the best way to showcase your skills. This is especially true for roles like graphic design and content creation. Even software developers can benefit from creating an online portfolio.
- Become an authority in a field. Becoming part of webinars as a presenter or a panelist is a good way to build authority in a particular field.
Navigating Skill-based Job Interviews
The rise of skill-focused hiring also means that job interviews are changing. Rather than focusing on your background, interviewers might ask for a practical demonstration of skills.
The interview might be completely virtual, to be completed at your convenience.
Here’s a quick list of dos and don’ts to help you prepare:
- Skill-based hiring interviews include behavioural questions. Prepare stories to show how your skills are applicable in real-world scenarios.
- Focus on industry-specific tasks and challenges. For instance, a Customer Success interview might include a mock roleplay, or a marketing position might involve a live, mock strategy presentation.
- Reflect on past learnings to show how you’ve grown and can adapt to challenges.
Conclusion
In a nutshell, as the world of work evolves, skills have taken centre-stage.
Whether you’re a job seeker, a recruiter, or someone charting the course of an organisation, understanding the power of skills will be crucial to success.
In the new age of hiring, it’s not about where you come from but what you can truly deliver.
