How can HR leaders implement skills-based hiring?
Research from Test Gorilla has found that the use of skills-based hiring across workplaces is accelerating as employers find it more difficult to recruit capable talent using resumes.
The global research, which included respondents in Australia, found that 73% of employers are now implementing skills-based hiring in 2023, a 17% jump from the year prior.
Skills-based hiring is an alternative recruitment process where candidates are screened based on their ability to perform the job through a series of skills-based tests or exercises.
Its growing popularity comes as more employers report various challenges when using resumes to screen talent, including:
- Accuracy
- Difficulty in ranking applicants
- Problems with unconscious bias
Wouter Durville, CEO and co-founder of Test Gorilla, described the growing shift to skills-based hiring as "seismic," given that resume screening has been the norm for decades.
"Skills-based hiring has been around for a fraction of the time that resumes have. We are seeing a tipping point which could mark the death of the resume as a way to get work in the next two to three years," he said in a statement.
Death of resumes
But will the growing popularity of skills-based hiring put an end to the era or resumes?
"I think we're seeing the death of resumes especially on the top of the funnel," Durville told HRD. "Just using resumes to make the initial selection of candidates, I think that's becoming history pretty fast."
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Resumes usually include five basic sections, namely personal information, education, work history, skills, and professional summary or objective.
Durville noted that there's still value in such fields, especially with work experience, which gives resumes a use in the ongoing shift to skills-based hiring.
"I think that will play a role. Work experience is still relevant but later in the process [but] not like when you start a recruiting process," he said.
"I think initially the first step you want to do is you want to give everyone a fair chance with a skills test and ideally we could double click on that with multi-measure testing for different things."
Once job candidates are screened based on who can do the job, that's when employers can look at their previous work experience and assess them on that, Durville said.
"So, there's still value [with resumes], I think, later in the process. But not at the at the start.”
Implementing skills-based hiring
With more employers implementing a skills-based hiring approach, Durville recommended a process that would include three parts, namely assessment, structured interviews, and then take-home assignments.
The assessment stage would include different types of tests of a candidate's hard skills and soft skills. The process should also include structured interviews, where a variety of job candidates are asked similar questions so employers can compare their answers.
Another part is providing take-home assignments, where candidates are given an actual piece of work for their role that they can submit or present later.
Durvill noted, however, that there will be differences in implementing skills-based hiring depending on the open role.
"My advice to employers would be to take that skills-based first approach across your funnel to really test for skills and then remove the bias from your process as much as possible," he said.
Starting slowly with skills-based hiring
For employers looking to shift to skills-based hiring this year, Durville suggested starting small, such as piloting the process on one vacancy.
"You want to transition slowly. I think the main thing is just start doing it, start experimenting. Don't make it too complex, you could just start for example by introducing an assessment in the process," he said.
Test Gorilla's findings said employers for skills are now reporting the following benefits:
- Higher levels of staff retention (89%)
- Reduction in mis hires (88%)
- Time to hire as less (82%)
- Reduced cost to hire (74%)
Another 84% of employers also said skills-based hiring had a positive impact on workplace diversity, according to the report.
"It's also in self-interest of companies, that's the great thing. It's a win-win," Durville said.