The hiring landscape has been tough. Recruiters and hiring managers have been scrambling to fill job vacancies since the pandemic lockdowns were lifted. Job seekers have been in control of the process, asking for and getting higher salary and benefits packages and more flexibility in where and when the work is done.

Even though the consensus on the latest jobs reports is that employment and hiring is returning to pre-pandemic levels, recruiting isn’t a walk in the park. Recall that before the pandemic hiring was tight, and the best talent had options.

August, 2023 Jobs Stats

In August, jobs increased by 187,000, beating the predictions, but the unemployment rate jumped to 3.8%. That’s the highest it’s been since February 2022.

Partly in response to recruitment challenges, businesses are becoming more open to hiring candidates without college degrees or a minimum number of years of experience. It’s a trend called Skills-Based Hiring and a recent report shows that 76% of employers have implemented it for at least some positions. LinkedIn job postings increasingly advertise skills and responsibilities instead of qualifications.

Skills-Based Hiring Reduces Costs

The same report notes that companies that implement skills-based hiring see a reduction in their mis-hire rate because the quality of applicants is improved.

It also results in a larger pool of candidates, a benefit when workers are scarce. The cost of a college education continues to increase, and candidates may forgo the traditional college route to avoid starting their career in debt. Others are just not able to afford the time a college education requires. Because people in these groups can still be highly qualified for many roles, employers are able to increase the diversity of their workforce by tapping into this often neglected pool of candidates.

Time to hire, a key metric for recruiters, is often less when using skilled-based hiring. Assessing candidates early in the process allows hiring teams to quickly rank the applicants based on their skills. Reducing time to hire reduces hiring cost. Candidates hired for their skill set don’t require as much training to become productive, another cost savings.

And Improves Retention

In addition, skills-based hiring improves retention. According to a McKinsey report, workers without degrees tend to stay in their jobs about 34% longer than workers with degrees. Hiring based on skills can provide a path for workers to advance their career within the company. For companies that provide the ability to train and advance internally, hiring for open positions becomes less urgent.

Employees Also Benefit

The benefits of skills-based hiring extend to the workers, who are better able to find jobs based on their skills rather than their education or years of experience. It encourages a culture of learning, growth and development which is a benefit to both employers and employees.

Companies willing to reimagine their recruiting process and implement skills-based hiring will be setting the stage for resilience in the face of an uncertain future of work.