In a time when AI can write code and university curricula are being outpaced by changing tech, are tertiary qualifications becoming obsolete? That’s a question we can’t definitely answer. However, as many as 70% of ICT roles in Australia are missing the talent required to perform them – a situation unlikely to resolve itself quickly.
This reality is prompting more employers to focus on candidates’ specific abilities and competencies over traditional qualifications and previous job titles. In recruitment and HR circles, this approach is known as ‘skills-based hiring’. Also known as ‘hiring for skills’, this approach offers the potential to open up a vast new ocean of talent for your organisation, provided you’re equipped to reel in the right type of fish.
Boating analogies aside, if your organisation is frequently challenged to find the right skills for specific roles, hiring for skills could be an effective tool in your talent strategy.
We’ll guide you through what it involves, its merits and what to consider.
Who Uses a Skills-Based Hiring Approach and Why
Proponents of skills-based hiring say that it’s necessary in a world where university qualifications and direct industry experience might be becoming less predictive of an individual’s success in a role. Boston Consulting Group found that people hired on the basis of skills have a 9% longer tenure with their employers compared with traditional hires and get promoted at a similar rate.
The proportion of executives experimenting with a skills-based approach ‘across a range of workforce practices’ is as high as 90%, according to Deloitte, which suggests an increasing need for new approaches to sourcing talent.
Several high-profile tech employers in Australia and abroad have embarked on ‘hiring for skills’ initiatives to source young talent beyond mainstream avenues (think major players like Microsoft, EY, Accenture, Google and IBM).
One example is Amazon Web Services’ Skills-Based Hiring Program, which removes bachelor’s degree requirements for some early-career roles. AWS believes that qualified talent for cloud jobs exists outside the university system, which has inspired its leaders to tap into non-traditional talent pools.
Other organisations closer to home, such as Canva, WiseTech Global and Culture Amp, have relaxed their degree requirements for a selection of roles. There is a growing acknowledgement that looking beyond degrees can help employers engage overlooked talent, including people from underrepresented communities.
Getting Started with Skills-Based Hiring
Hiring for skills could be as simple as removing degree requirements from a small selection of job postings and keeping track of the quality of applications that come in. However, before you do that, your organisation will benefit from a little legwork!
Gather Data
To get started, it’s useful to identify which roles are consistently challenging to recruit for. Spend a bit of time tracking time-to-hire and employee churn for various positions, including the number of qualified applicants per job posting. This data can provide clues about misalignment between job requirements and candidates’ skills.
Identify Suitable Roles
Concurrently, you can also start identifying roles where factors like hands-on experience, technical skills, or vocational training are more relevant than a uni degree. Roles such as software developers, DevOps engineers, cybersecurity analysts often rely heavily on competencies that can be acquired outside of universities, like bootcamps, online courses, certifications, or on-the-job training.
Additionally, it can be argued that skills-based hiring is already prevalent in executive recruitment – even if it’s not explicitly recognised as such. Senior hires are often evaluated more on their demonstrable skills, rather than their formal educational background alone.
Start Small
Armed with data, you’ll have a few clues about where to begin experimenting. Starting with one or two role types will keep things manageable on the first run.
Include Transferrable Skills in the Mix
Before advertising a position, identify which transferrable skills from other industries or related domains could be useful. For instance, a project manager from another industry may have strong skills in organisation, budgeting, and team leadership that are equally valuable in an IT project management role.
Spell It Out in Job Ads
Explicitly state in your job postings that you welcome candidates with diverse professional backgrounds. Be sure to highlight that your organisation will consider candidates without related qualifications but can demonstrate skills essential for the job.
Also, we recommend listing acceptable substitutions for traditional requirements. Instead of “5 years of data science experience in logistics is essential,” you might specify, “3-5 years of data science experience in any industry, with a proven track record of delivering successful outcomes.”
Adjust Your Hiring Tools
If you use an applicant tracking system (ATS), you will likely need to adjust its filters to focus solely on specific skill-related keywords and allow applicants without a university degree. When tweaking ATS filters, keep in mind that candidates with the desired skills might come from various industries and use different jargon.
Depending on the number of applications you expect to receive, it’s wise to also review CVs manually. As a hiring manager, you are more attuned to the nuances of the job requirements and how a specific candidate could be a surprise match than an AI-powered filter. Of course, if you’ve engaged a specialist tech recruitment agency to help build your team, they will assist you with reviewing CVs to ensure good candidates don’t slip through the net.
Back up the Interview Process with Assessments
Should you try out a skill-based hiring approach, it makes sense to base hiring decisions on actual performance rather than the interview alone.
The challenge is that hiring for skills sometimes requires managers to set aside their gut feelings during the interview process. This is where objective measurements are useful.
Using structured tools like coding tests, work simulations and psychometric assessments can give you a clear and unbiased picture of a candidate’s skills. Even if you’ve removed a requirement for a uni degree or specific industry experience, you’ll still need to validate candidates’ technical and problem-solving abilities, along with the soft skills that allow them to thrive at work.
Upscale Your Tech Recruitment Strategy
The upside of skills-based hiring is that it’s infinitely customisable for the requirements of an organisation or a specific team. Adopting this strategy can be a significant lever for attracting and retaining a more diverse talent pool over the long term. Experimentation, open-mindedness, and a strong awareness of the specific roles that are needed for success are key to making this work.
For more advice on skills-based hiring get in touch with us. With 18 years of delivering for clients, Exclaim IT’s knowledgeable team can work on your behalf to uncover critical skills from a diverse network of talent. Contact us today – we’d love to hear from you.
