What are the Benefits of Skills-Based Hiring in Tech?
An Alternative to Role-Based Approaches
Role-based hiring is the status quo on most teams and implies that the hiring team predicates much of the hiring process on former job titles and education. Title inflation, degree inflation, unconscious bias, and inefficiency are all ways that the current role-based hiring system fails us. However, as discussed in the previous section, skills-based hiring offers a better way to source candidates, getting around many of these challenges and bringing with it several undeniable benefits.
Growing Your Tech Candidate Database
Removing the filters that limit a candidate pool without increasing candidate quality can radically increase the number of eligible candidates. Suddenly, you can take a look at a software engineer with two years of experience doing a similar job you are trying to fill, but who would have been disqualified in the past because they only have an associate's degree or a handful of bootcamp certifications.
The skills-based lens can be especially useful to add internal candidates to your hiring pool. A marketing technologist or an HR data analyst may have the right skills profile for an open IT role. In the past, you would not have noticed them because their title did not signal the right fit. A skills-based approach uncovers those opportunities. This includes opportunities to recruit AI talent, as we highlight in our new Technical Recruiter's Guide to Building an AI Team.
Accessing More Diverse Tech Talent
Women and BIPOC continue to be underrepresented in technology compared with white men. Recruiters may unintentionally add to that imbalance when they enforce degree requirements, since both women and non-white professionals are less likely than white men to have a bachelor’s degree in the science, technology, engineering, and math fields. Bias against people with less tech experience or those who have made career pivots can also come into play if job postings require candidates to have had certain job titles in the past. A skills-based approach can mitigate those sources of bias by emphasizing what the candidate can do, not how or where they gained those skills. The benefits of diversity translate not only into a larger candidate pool but also into more productive teams.
Elevating the Importance of Soft Skills
The traditional trend of evolving skills in tech often focuses on hard skills like coding in Python or cloud technologies like Kubernetes. Yet hiring managers are also looking for soft skills such as social skills, active learning, and originality. Pearson research on the future of skills finds that these soft skills will be in higher demand by 2030 than hard skills. Soft skills are also less vulnerable to skills obsolescence than hard skills, which may be supplanted by a competing approach, such as a specific programming language or management methodology.
Increasing Employee Loyalty
Filling the open roles in their organizations will always be an extremely high priority for HR leaders. It is equally important to most HR leaders, however, that those candidates stay in their roles. If employee turnover begins happening too frequently, the HR and talent acquisition teams know they will be in a vicious cycle, constantly filling and refilling the same open positions.
Interestingly, skills-based hires are also more loyal hires. They stay slightly longer with the same company and they get promoted at a slightly faster rate than traditional hires. While there are likely other factors that play into it, any adjustments that lead to higher retention should be of great interest to human resources professionals, especially in the current environment.
Aligning Employee Needs with Those of the Business
For so many tech professionals, a good job is not just one that offers competitive pay and attractive benefits. A good job also presents opportunities for tech professionals to grow, learn and upskill themselves. In fact, learning is one of twelve indicators Gallup uses to measure engagement in its annual engagement survey. Pearson also finds that employees want learning and development opportunities. Their motivations reflect the other side of the trend in changing — they know their jobs are evolving and want to develop themselves ahead of the changes in order to stay relevant. With a skills-based focus, organizations create opportunities to leverage upskilled employees in new roles. That benefits everyone.