According to a new initiative between the Society for Human Resource Management and the Charles Koch Foundation, skills-based hiring is the future of work. “Businesses looking to succeed going forward must continue to evolve their hiring practices,” said Wendi Safstrom, president of the SHRM Foundation. “The U.S. has entered a skills-based economy. And to fit this new environment, employers will need to adopt skills-based hiring practices in their HR departments.”
Doing many jobs doesn’t actually require degrees or licenses, but companies will use such traditional credentials as proxies for skill. SHRM Foundation’s aim, however, is to “engage employers to adjust hiring attitudes and processes toward individuals pursuing credentials and certifications instead of two- or four-year degrees.”
Indeed, in 2022, SHRM found that 45% of U.S. workers already have some sort of alternative credential (such as a SHRM-CP certification), while 49% of people without an alternative credential are interested in obtaining one.
Such certifications appear regularly on resumes, and recruiters must determine the value of these certifications to evaluate the candidate. As SHRM points out, they are “ any certification, microcredential, badging, apprenticeship, or other assessed learning opportunity beyond a 2- or 4-year college or university degree that formally indicates a worker has acquired specific skills or competencies.”
But such formal credentials are not the sole way of assessing candidates when it comes to skill-based hiring. Merely replacing degrees with credentials does not constitute hiring for skills.
For organizations looking to diversify their employee population, basing candidate evaluation on skills beyond credentials can help. SHRM found that 81% of executives, 71% of supervisors, and 59% of HR professionals believe doing so can “uncover untapped talent.”
Tamara Olson, workforce development chief at the Small Business Administration, explains, “I work in IT, and while certifications are helpful to see on a resume, skills assessments are the best tool we have identified thus far. Some assessments are more basic, and others are very sophisticated, especially for cyber professionals. I have found the bigger challenge is managers understanding how to prioritize staffing needs when balancing a rapidly evolving IT landscape with long-range planning and strategic priorities.”
Helping managers understand their hiring needs and helping them evaluate candidates is a core function of the skill-based hiring trend. It cannot be done easily or overnight.
“There needs to be an investment in training on effective interviewing,” says Jennifer Powell, former director of people and culture at The Dupont Circle Hotel. Powell asks, “How many managers know how to conduct a strong interview and assess responses?”
In other words, you cannot just tell managers to evaluate skills and expect them to understand how. Talent acquisition professionals must be at the forefront of training managers on hiring.
Amy Renhard, CEO of Trillium Hiring Services, a consulting company that helps startups learn to hire, wants people to undergo project-based skill evaluations. She’s not looking for “random trivia knowledge in the skill” but a “project similar to our work.”
The key is to find a project that is similar to work a candidate will do (could even be a recent project if it’s not sensitive), won’t take more than an hour, and has a lot of ways it could be done,” Renhard explains. She adds, “Then create a scorecard to measure the success of the outcome,” notably pointing out that the goal should not be to gauge whether it was done the way a hiring manager would necessarily expect it to be done.
Putting aside credentials, SHRM also created a 42-page toolkit that you can download for free. It discusses a 12-step plan to increase skills-based hiring.
