As the workforce evolves, the way employers find skilled talent should too.
Key Takeaways
- Skills-first hiring (also known as skills-based hiring) shifts the focus to jobseekers’ skills and aptitude rather than less effective proxies for job performance, such as degrees, prior positions or years of industry experience.
- Hiring managers who practice skills-first hiring find it twice as easy to find qualified candidates than hiring managers who do not.
- Benefits of skills-first hiring for employers include expanding and diversifying the talent pool and building human equity. Jobseekers want a skills-based approach too: 83% say employers should consider overall experience over degrees.
Making the right hire is a multifaceted proposition. Pay, benefits, location and culture all matter, but a person’s ability to do the job should come first.
In my role as the Vice President of Social Impact and Sustainability, my team and I help all of Indeed break down bias and barriers in hiring so that more people find meaningful work. Since 2021, we have helped nearly 70 lakh jobseekers around the world facing barriers get hired. By 2030, we aim to help 3 lakhs more. Skills-first hiring is a critical part of our efforts because it breaks down many of the barriers jobseekers face during the hiring process. It’s also a necessary change for employers who want to find qualified and diverse talent.
What Is Skills-First Hiring (Otherwise Known as Skills-Based Hiring)?
Skills-first hiring — often referred to as skills-based hiring — focuses on sourcing and evaluating candidates based on skills rather than proxy requirements like degrees, prior positions and years of industry experience. The term “skills-first” also acknowledges that in some industries, a formal education and certifications are required.
When I say skills, I mean all skills that can be applied to a work setting — from programming and data analytics to adaptability and communicating effectively. Interestingly enough, despite the recent advancements in AI that require more jobseekers to have some technology knowledge, the skills companies desire most are not technical; they are leadership, critical thinking and project management.
If you look at a traditional resume, recent work experience and formal education are typically listed at or near the top. A skills-first mindset flips this, and the data backs up the approach. Hiring managers who practice skills-first hiring find it twice as easy to find qualified candidates than hiring managers who do not. Skills-first hiring isn’t simply another recruiting trend; it’s a recruiting superpower.
Why Shift to Skills-First Hiring Now?
Employers have told us that they’re having trouble finding quality talent, in addition to meeting their diversity, equity, inclusion and belonging (DEIB) goals. Hiring is taking too long. Many sectors are still recovering from the pandemic, non-traditional career paths are more prevalent, and the workforce is ageing.
AI is changing the hiring landscape for both jobseekers and employers. For jobseekers, the introduction of AI in the workplace means that the skills they need for future roles are currently being rewritten — so no one has them all yet. For employers, AI technology can now help recruitment managers find qualified talent easier and quicker by helping to curate great job postings and sorting for skills before other qualifications. Skills-first hiring offers a path forward that meets the needs of employers, jobseekers and an increasingly dynamic labour market.
But how?
For one, recruiting and hiring with a skills-first approach extends your reach to a wider, more diverse pool of talent you may have previously overlooked. Four-year degree requirements in the U.S. alone screen out half of the workforce — 7 lakhs plus people. Too often, lack of degree is equated with lack of skills. In reality, these workers are STARs — a term coined by US-based organisation Opportunity@Work to refer to jobseekers skilled through alternative routes, like military service, community college or, most commonly, work experience, rather than a four-year degree.
Hiring for skills builds a workforce that reflects our increasingly diverse communities and makes better work more accessible to all.
And what’s more, if someone is good at their job, they are more likely to stay. A Harvard Business School study found that when companies dropped degree requirements and hired STARs, those employees stayed in their roles 20% longer than their college-educated counterparts.
In addition, the data shows that jobseekers would like to see more skills-first hiring: In a 2021 Indeed survey, 65% of jobseekers said employers should consider skills assessments, skills certifications (72%) and overall experience (83%) rather than only degrees.
How to Get Started With Skills-First Hiring
Source: Rethink your job requirements
Many of us are guilty of including a laundry list of required skills in our external-facing job postings. But to find the best talent, we must make sure the job posting is a true statement of the job requirements. I encourage hiring managers to take a step back and think through: Which skills does the candidate need on day one? Which skills can they learn once they are in the door? Which skills are desired but not critical?
Employers are increasingly relaxing degree and tenure requirements. Indeed Hiring Lab found that a majority (52%) of U.S. job postings on Indeed did not mention any formal education requirement as of January 2024, up from 48% at the same time in 2019. And less than a third of U.S. job postings on Indeed asked applicants for a specific number of years’ experience, down from almost 40% in 2022. If a college degree or a specific number of years’ experience aren’t required for the job, consider removing them.
Think of the skills you use every day at work. Did you learn them at school, on a job or on your own? Barring industries that require specific education and certifications, it doesn’t really matter, right? What matters is that you have them. The same goes for the people you hire.
A job posting is often the first encounter a jobseeker has with a new opportunity, and potentially with your company. Remember to use inclusive language, highlight a commitment to employee benefits like parental-leave and encourage applications from underrepresented groups. Try to avoid industry jargon and desired traits that can imply a preference toward younger candidates, like “energetic” or “enthusiastic.”
At Indeed FutureWorks Bengaluru 2023, Indeed Senior APAC Economist Callam Pickering highlighted three key trends shaping India's talent market. India’s young population and economic growth have lifted over 41.5 crore people out of poverty since 2006, a trend likely to continue for 15 years. Job postings surged by 63% since February 2020, showing strong recovery. Interest in remote work remains high, with 8% of job searches focused on it, 11 times higher than pre-pandemic levels. Additionally, the rise of Generative AI technologies is poised to transform the job market, with increasing GenAI job postings in India.
He said, “At the beginning of the year (2023), I could count the number of GenAI postings in India on my fingers and toes. That is how few they were. Today, there are more than a thousand individual opportunities to work with Generative AI across India. And no doubt that number will continue to rise next year.”
Screen: Find candidates with the skills to do the job
Once your job postings are refined, the next step is to find jobseekers with the skills you are looking for. Those skills may have been developed in a different field or role than the one you’re hiring for; you will be well served by considering transferable skills. A customer service representative may have the same fundamental skills as a bank-teller, for example — like persuasive speaking and retaining detailed product knowledge. A marketing specialist might make a great UX designer based on shared skills like understanding customer needs and producing creative content.
A great example of transferable skills in action comes from the National Health Service in the U.K. In 2021, we helped the healthcare system make 4,000 job offers to qualified candidates from a variety of backgrounds — 40% of those hired, though they had the suitable skills, were new to patient care.
AI technology will make it even easier to find candidates with the skills needed for the job. For example, Indeed’s Smart Sourcing tool can immediately match you with a shortlist of candidates with the right skills from millions of active jobseekers..
Assess: Evaluate candidates based on skills
After screening for candidates who have the appropriate skills on paper, there are a number of ways you can see those skills in action, including skills tests, work samples and job simulations. By asking a predefined set of competency-based questions in the same order and using a standardised scoring guide, hiring managers reduce bias and instead rely on data to support their decision-making. Explore Indeed Assessments for a variety of pre-employment tests, both ready-made and customisable, designed to help you practically evaluate candidates.
Skilled individuals from underprivileged communities often have to forgo traditional degrees and formal certifications due to financial or social barriers. By adopting skill-based hiring, you can give deserving candidates with resume gaps and other challenges a chance at employment, while also enhancing the diversity of your teams.
Millions of Indians have faced employment gaps due to caregiving responsibilities, health challenges, or layoffs. In March 2023, India's labour market worsened, with the unemployment rate rising to 7.8% from 7.5% in February. CMIE managing director Mahesh Vyas noted a simultaneous decline in the labour force participation rate, which fell from 39.9% to 39.8%, exacerbating the situation.
Advance: Go beyond the hire
A skills-first approach will not only help you make great hires, it will help you engage and upskill your employees to future-proof their careers and your organisation. What are the skills or roles that are mission-critical for your business going forward? Maybe it is understanding how to use AI; maybe it is project managers with knowledge of a certain product. Those are the skills or roles that your organisation should pay special attention to, whether through a formal upskilling program or by being more intentional when training employees.
At Indeed, we recently set up BOOST, a pilot apprenticeship program that trains non-technical employees to become software developers. “I never realised there was a career path outside of sales until I got to Indeed and learned about the world of tech troubleshooting, among other opportunities,” Ashley Duan, a participant, said. “I would always wanted to pursue a more technical role, and I am so happy BOOST gave me the chance. Finally, an open door.”
I am proud of the work we are doing to not only support our colleagues’ development and present a path of economic mobility for their futures, but to cultivate a world where people’s skills will lead them to better, more meaningful work.
