Skills-based hiring becomes more popular as companies recruit for potential rather than degrees

A recent report by Remote, an HR company that specializes in remote work matters, said hiring decisions are now more often based on skills rather than academic credentials, and this trend has increased by 63% in the last year.

The report said employers’ access to a larger talent pool is increased by skills-based hiring, which also lowers salary and career barriers for workers without a bachelor’s degree.

Employers benefit from skills-based hiring because it increases hiring efficiency, diversifies the workforce’s perspectives, and widens the talent pool.

This shift is speeding up as more and more occupations, like those in computer support and software engineering, don’t require a degree to be employed. According to an analysis of millions of online job postings by the Burning Glass Institute, the proportion of positions requiring a college degree has decreased.

The shift toward this type of hiring will increase in 2023 as skills emerge as the currency of the labour market.

What it means for candidates: Many candidates appear to prefer a hiring process that includes skill-based assessments. This is because this type of hiring provides candidates with a better understanding of the requirements of the role they are applying for, as well as the opportunity to determine how well-suited they are for the role and whether it aligns with their career objectives.

• Stephen Bamidele, the HR lead of an NGO, commented on the report saying: “many people begin their careers only to discover that they dislike the job, are not well-suited to it, or lack the necessary skills”.

What it means for employers: Skill-based hiring streamlines the hiring process because the longer and more complicated the hiring process, the less likely candidates are to complete it and remain invested in your brand and position.

• Bamidele said: “for employers, it provides them with the ability to understand a candidate’s culture fit and motivation to join the company for better long-term alignment. This sort of hiring ensures new team members bring new skills, backgrounds, and perspectives”.

To save time, consider using a pre-employment testing platform that is unbiased and accurate as well as an applicant tracking system.

What is driving it in Nigeria: This shift in hiring practices is partly driven by the high rate of youth unemployment in Nigeria, which has led to a large pool of talented and skilled young people seeking employment opportunities.

• Many of these young people may not have had the opportunity to pursue formal education or training, but have developed valuable skills through practical experience or self-directed learning.
• Another factor driving skills-based hiring in Nigeria is the increasing demand for digital skills and technological expertise in the workforce.
• As Nigeria continues to develop as a hub for innovation and entrepreneurship, employers are seeking candidates who have practical skills in areas such as software development, digital marketing, and data analysis.

Tech also drives skill-based hiring: The move towards skills-based hiring is also being driven by technological advancements in the recruitment industry.

• Artificial intelligence (AI) and machine learning tools are being increasingly used by recruiters to analyze resumes, applications, and social media profiles to identify the skills and experience of candidates.
• This helps to reduce the time and resources needed for manual screening, making the hiring process more efficient.

Be smart, it is not all rosy: However, there are some potential downsides to skills-based hiring. It could lead to a lack of diversity in the workplace, as candidates without formal education or training may be excluded from certain job opportunities.

• Additionally, it could lead to a skills gap, as employers may struggle to find candidates with the specific skills they require for their business.
• It also can be a challenge, particularly in industries where formal education and qualifications are still highly valued.
• Some employers may be reluctant to hire candidates without traditional degrees or certifications, even if they have valuable skills and experience.
• To address these issues, employers need to ensure that they are using a range of recruitment methods, including skills-based assessments and formal education or training requirements, to attract a diverse range of candidates.
• They should also invest in training and development programs to help bridge any skills gaps in their workforce.

Overall, the shift towards skills-based hiring in Nigeria is a positive development, as it can help to create more inclusive and diverse workplaces and provide opportunities for talented young people who may have been overlooked in the past.

Experts also suggest it is important for employers to ensure that they are not inadvertently discriminating against candidates based on factors such as age, race, gender, or socioeconomic background.

Skills-based hiring should be used in conjunction with other measures, such as blind resume screening and diversity and inclusion training for recruiters, to ensure a fair and inclusive hiring process for all candidates.