February 6, 2023 - Written By Markle | Blog Archive
As some industries struggle with finding the talent they need, employers looking to stay competitive are realizing the value of tapping into new talent pools by implementing a skills-based approach.
Recent research has shown skills-based hiring is up 63% in the past year – here’s why your company should follow suit and ditch outdated hiring methods that rely on proxies for skills, such as degrees, previous titles, and background.
Approximately 75% of American businesses have been affected by the labor shortage, forcing companies to turn down business, cut back operating hours, and deal with their inability to fill crucial roles and high turnover rates.
Traditional hiring practices encourage employers to require a four-year degree in their job postings, even for jobs that don’t require college-level skills. This requirement significantly narrows a company’s talent pool because more than two-thirds of the population does not have a bachelor’s degree. These requirements also hurt efforts to increase Diversity, Equity and Inclusion (DEI), because Black and Latino workers are less likely to hold degrees. Research from Opportunity@Work has shown that adding a four-year degree requirement automatically screens out 76% of African Americans, 81% of Americans in rural communities, and 83% of Latinx workers.
So, if your business is struggling to find the right talent, your hiring process may be hindering rather than helping you.
A skills-based approach to hiring, which focus on a candidate’s skills rather than their background, can help you access talent that is generally overlooked by traditional hiring methods, such as people of color, women, people with disabilities, people with criminal records, people who have paused their careers to care for family members, and people who lack a four-year degree.
Using skills-based practices can help you reduce recruiting costs and time-to-hire, fill open positions faster, improve diversity, increase employee retention and engagement, and find the talent your company needs in a constantly changing labor market. Even when economic times are tough, focusing on skills can help you find the people you need to weather the challenges a recession brings. According to McKinsey & Company, in the face of a potential recession, skills-based practices provide a road map for workers to make advancements internally, allowing employees to progress within their current companies during a time when external hiring could slow down. What happens when you provide workers with advancement opportunities? They are more likely to stay! This means you won’t have to slow down operations or spend time and resources searching for talent to fill open positions.
If you’re ready to start implementing skills-based hiring practices, below are some steps you can take today that can help your business transition from traditional hiring methods: