Think skills, not titles: The case for skills-based hiring

Skills are better indicators of career success than qualifications. It’s time to get creative in your recruiting.

When Larry Robertson left the British Army to try his hand in advertising, culture shock was only to be expected. Having served for the larger part of the 1970s, the Houston Street advertising agency he found himself punching in at was, on its face, a different world.

“The military was very male, very masculine, and, of course, quite hierarchical,” Mr Robertson told The HR Leader. “It was uniform, uniformity, tradition, regiment and, don’t get me wrong, I loved it, but [after years of training] there was not much diversity.”

At his new employer, however, diversity seemed baked into the very business model. Despite the initial shock, Mr Robertson soon realised the work had more in common than he had expected.

“Funny enough, both those sectors [advertising and military] use similar language,” he said.

“They both talk about strategies and targets. Deadlines were [still] important. Purpose, of course, was still really important. Outcomes and, most importantly, teamwork [too].”

In advertising, as in the military, “you are working as a member of a team, whether you’re leading that team or contributing to that team and bringing your own skills and attributes, it’s all about teamwork at the end of the day”.

Mr Robertson’s experience attests to the idea, now increasingly understood by hiring managers, that skills are as good an indicator of competency as are experience and qualifications.

Towards skills-based hiring

Increasingly, employers are hiring for skills rather than specific kinds of experience or qualifications. So-called “skills-based hiring” is a growing practice, as is evidenced by the range of online materials on the subject, and it means that employees are growing increasingly mobile.

According to TestGorilla, 76 per cent of employers now use some form of skill-based hiring in their recruitment, while 55 per cent use role-specific skills tests. As testing continues to develop, jobs are being seen more and more for their component parts – the tasks that comprise them and the skills best suited to those tasks.

Being skills-oriented in hiring means employers are more willing and likely to hire from outside their specific industry. According to a 2019 survey from Adecco USA, 78 per cent of US-based organisations said they would consider applicants with transferable skills even if they don’t fit the precise job description. In 2022, LinkedIn reported a 21 per cent increase in job postings that advertised for skills and requirements as opposed to qualifications.

Fortunately, employees, too, are open-minded about skills-based industry changes. SEEK data found that 43 per cent of Australians, if forced to look for a new role, would transition to another industry or job type.

And there might be a good reason to make the switch, as some research suggests that a diverse career correlates with individual success. For example, according to Russel Reynolds Associates, approximately 67 per cent of business leaders came from a different industry.

Most skills-based hiring looks to assess “soft” skills, said Paul Marshall, general manager at Drake Recruitment Services, though “hard” skills are increasingly being targeted.

“Some of the most useful soft skills across different industries are communication, adaptability, the capacity to prioritise tasks and manage your time, having a strong work ethic, being able to work in a team and problem solving,” said Mr Marshall.

Despite the name, soft skills are not to be underestimated. In fact, sometimes they’re more relevant than hard skills, said Mr Marshall. For example, “You might be looking for someone with 10 years’ experience and a candidate has five years’ experience.”

“If you look at their growth over the last five years – how they communicate within their team, their strong work ethic and how they adapt to change – and how they fit from a cultural standpoint, you might realise they’re better suited than the person with more experience,” he said.

According to Forbes, the benefits of skills-based hiring are enormous. Apart from playing a crucial role in helping employers find suitable candidates amid ongoing skills shortages, skills-based hiring can lead to the following:

1. Better quality candidates
2. Faster hiring
3. Cheaper hiring
4. Improved retention
5. A more diverse workforce

The transcript of this podcast episode was slightly edited for publishing purposes. To listen to the full conversation with Larry Robertson, click below:

Nick Wilson

Nick Wilson is a journalist with HR Leader. With a background in environmental law and communications consultancy, Nick has a passion for language and fact-driven storytelling.