As some industries struggle with finding the talent they need, employers looking to stay competitive are realizing the value of tapping into new talent pools by implementing a skills-based approach.

Recent research has shown skills-based hiring is up 63% in the past year – here’s why your company should follow suit and ditch outdated hiring methods that rely on proxies for skills, such as degrees, previous titles, and background.

Traditional Hiring Practices Leave Out Potentially Great Talent

Approximately 75% of American businesses have been affected by the labor shortage, forcing companies to turn down business, cut back operating hours, and deal with their inability to fill crucial roles and high turnover rates.

Traditional hiring practices encourage employers to require a four-year degree in their job postings, even for jobs that don’t require college-level skills. This requirement significantly narrows a company’s talent pool because more than two-thirds of the population does not have a bachelor’s degree. These requirements also hurt efforts to increase Diversity, Equity and Inclusion (DEI), because Black and Latino workers are less likely to hold degrees. Research from Opportunity@Work has shown that adding a four-year degree requirement automatically screens out 76% of African Americans, 81% of Americans in rural communities, and 83% of Latinx workers.

So, if your business is struggling to find the right talent, your hiring process may be hindering rather than helping you.

Skills-Based Practices Can Help You Find the Talent You Need

A skills-based approach to hiring, which focus on a candidate’s skills rather than their background, can help you access talent that is generally overlooked by traditional hiring methods, such as people of color, women, people with disabilities, people with criminal records, people who have paused their careers to care for family members, and people who lack a four-year degree.

Using skills-based practices can help you reduce recruiting costs and time-to-hire, fill open positions faster, improve diversity, increase employee retention and engagement, and find the talent your company needs in a constantly changing labor market. Even when economic times are tough, focusing on skills can help you find the people you need to weather the challenges a recession brings. According to McKinsey & Company, in the face of a potential recession, skills-based practices provide a road map for workers to make advancements internally, allowing employees to progress within their current companies during a time when external hiring could slow down. What happens when you provide workers with advancement opportunities? They are more likely to stay! This means you won’t have to slow down operations or spend time and resources searching for talent to fill open positions.

Six Easy Steps You Can Take to Start Using Skills-Based Hiring Practices

If you’re ready to start implementing skills-based hiring practices, below are some steps you can take today that can help your business transition from traditional hiring methods:

• Learn what skills-based practices can do for your organization by taking a free, online training course
• Check out resources that support the end-to-end process of connecting workers to good career opportunities, created by the Rework America Alliance
• Identify new talent pipelines by connecting with local workforce centers and other worker-serving organizations
• Quickly and easily find the skills candidates need to bring to a role by using the Skillful Job Posting Generator, which identifies an open job’s required skills and competencies and incorporates them into a job posting. It also eliminates the guesswork out of writing job postings and makes it much easier for employers to efficiently source and retain talent
• Update old job description to focus on skill and develop internal progression roadmaps
• Update and publish new skills-based job postings using inclusive language, start by creating a skills-based job posting for one or two roles, and see what happens