Over the last few years, much has changed in the labor market. As the Harvard Business Review shares, degree requirements are diminishing for employees in a variety of industries as a new focus on skills has emerged. But why are employers transitioning to skills-based hiring?

Now more than ever, employers are beginning to see that degrees and even prior work experience aren’t everything. Holding a high position in a company or working for a well-known brand doesn’t necessarily mean that an employee has the critical skills needed to fulfill their role in a new job. And, lacking either a degree in a relevant field or prior experience in the exact role to which a candidate applies doesn’t mean that he or she lacks the skills necessary for success.

For employers in 2022 who are looking to improve their businesses across the board, skills-based hiring is the way to go. Choosing employees based on their skills drives company growth, allows for easier accommodation of business pivots, creates equity in the labor market and helps employers satisfy their hiring needs much more quickly.

Drive company growth

Unlike degree-based or even experience-based hiring, skills-based hiring can provide companies with employees who are certain to have the skills that the company needs to move to the next level. As companies look toward expansion, choosing employees based on their abilities rather than their previous titles will allow companies to fill the gaps in their team’s skill set more quickly with less training. Saving this time and money supports company growth and increases revenue, especially with the additional expertise of new, skilled employees.

While technical skills certainly can help a business grow in needed areas, a recent report by the DeBruce Foundation and Urban Education Resource Center has identified a number of critical soft skills that are needed for growth in all aspects of a business:

• Communication.
• Collaboration.
• Critical thinking.
• Interpersonal skills.
• Proactivity.
• Executive function.

Though these skills can be learned through a variety of educational, workplace, personal, or other experiences, DeBruce’s report confirms that “essential skills are largely being acquired outside the high school and college environment.” In order for companies to acquire and use these skills to drive growth, the hiring process should be centered around candidate skills rather than a college degree or former job position.

Accommodate business pivots

Another reason that employers are turning to skills-based hiring is that employees with skills rather than titles may offer an advantage in accommodating business pivots. Employees who lack a degree or experience at a prestigious company may exhibit a more robust group of skills than an individual with a title in a single area of expertise. By hiring the candidate with the skills rather than the title for the job, businesses can ensure that they’ll be prepared for any future pivots.

In addition, employees who know that they were chosen for their skills rather than their experience or degree will understand that they may be required to take on some level of flexibility in applying their skills to the new job environment. Emphasizing the importance of skills in the hiring process will make it easier for employees to know how and where they can add value and be less attached to a title that may change as the business adapts. 

Provide marketplace equity

Like skills-based hiring, diversity, equity and inclusion also have come into greater focus as workplace trends of 2022. Choosing employees based on their skills can help businesses to adopt this trend by improving equity in the marketplace. Skills-based hiring eliminates educational barriers for skilled workers who otherwise would not have the opportunity to be considered for certain positions.

Just last year, LinkedIn CEO Ryan Roslansky shared an update about how LinkedIn has been accommodating and pushing the transition to a skills-based hiring approach by offering different programs that highlight members’ skills and encourage them to pursue more. “An approach like this means job seekers with no advanced degree — or no degree at all — now have a fairer shot at getting hired.” As skills-based hiring continues to increase, both employers and employees will gain more access to the resources they need.

Meet hiring demands

Perhaps the best reason to choose skills-based hiring over a degree or experience-based hiring is that it makes it much easier for businesses to fill positions. And, in the face of a national labor shortage, those positions are very likely to otherwise remain vacant. 

What’s more, HRForecast.com notes that skills-based hiring also allows open positions to be filled much more quickly by accessing a wider talent pool and screening for necessary skills earlier on in the hiring process. According to Recruitment.com, skills-based hiring also improves employee retention, which saves money by preventing the need to hire and train new employees. In order to be successful in quickly hiring and effectively retaining qualified employees, businesses should switch to a skills-based hiring approach.

As employers select employees based on their skills instead of their degrees, company growth will increase, business pivots will become easier, equity will increase in the labor market and employers will better meet their hiring demands. If you’re looking for new employees in 2022, stick with a skills-based system to make the most of your hiring process.

Peter Ord is the founder of GuideCX, a client implementation and onboarding project platform based in Lehi, Utah.

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