What is skills-based hiring?
A guide to workforce skills
In today’s evolving job market, traditional hiring methods that prioritise degrees and experience are being replaced with a more effective and inclusive approach around workforce skills. This recruitment strategy focuses on a candidate’s abilities, competencies and potential rather than credentials alone, helping businesses find the right talent while promoting workplace diversity.
This guide explores the benefits of skills-based hiring, how to implement it and how LinkedIn can help recruiters identify candidates with the right skills.
What is skills-based hiring?
Skills-based hiring is a recruitment approach that prioritises a candidate’s skills over formal education, job titles or years of experience. This method assesses an individual’s ability to perform specific job functions, ensuring that hiring decisions are based on competence rather than credentials.
This approach is particularly valuable in today’s dynamic job market, where skill sets evolve rapidly due to technological advancements, industry changes and digital transformation. Instead of relying solely on degrees or past job titles, employers focus on a candidate’s technical, cognitive and interpersonal skills to ensure they are a strong fit for the role.
The benefits of focusing on skills over credentials
Shifting towards a skills-based recruitment model provides numerous advantages for businesses, job seekers and the workforce as a whole.
1. Expands the Talent Pool
By removing rigid degree or experience requirements, businesses can tap into a broader, more diverse talent pool. Many highly skilled candidates lack formal qualifications but possess relevant experience gained through self-learning, certifications or on-the-job training.
2. Increases workforce diversity and inclusion
Skills-based hiring reduces biases related to educational background, socioeconomic status or career gaps, creating more opportunities for underrepresented groups.
3. Improves hiring efficiency and accuracy
By focusing on actual skills rather than credentials, businesses can make more accurate hiring decisions, reducing turnover and increasing employee retention rates.
4. Bridges skill gaps in the workforce
Many industries face a skills gap, where the demand for specific capabilities exceeds the available supply. Skills-based hiring helps businesses identify and train candidates with high potential, ensuring long-term growth.
5. Enhances Workforce Agility
In a rapidly evolving market, companies need adaptable employees. Skills-based hiring ensures businesses select candidates based on their ability to learn and apply new skills, rather than past job titles.
Implementing a skills-based hiring approach
To successfully transition to a skills-based hiring model, businesses should take the following steps:
1. Define job roles by skills, not just experience
• Identify the core competencies and technical skills required for each role.
• Use professional skills assessments rather than relying solely on CVs.
2. Conduct skills assessments
• Utilise skills testing platforms to objectively measure candidate abilities, but ensure you’re using an Australian skills assessment.
• Use structured interview techniques, such as behavioural and competency-based questions.
3. Prioritise continuous learning and development
• Invest in upskilling and reskilling programs to help employees grow within the organisation.
• Encourage professional skills development through certifications, online courses and mentorship.
4. Adjust hiring processes and mindsets
• Train hiring managers and recruiters on unconscious bias and the benefits of a skills-first approach.
• Ensure job descriptions focus on capabilities, rather than arbitrary requirements like “minimum 5 years of experience.”
How LinkedIn enhances skills-based recruitment
LinkedIn provides powerful tools that help businesses identify and assess candidates based on their skills:
• LinkedIn Skills Assessments: Employers can validate candidates’ technical abilities through assessments in areas like data analysis, coding, marketing and more.
• LinkedIn Recruiter: AI-driven algorithms match candidates based on their skills, endorsements and certifications rather than just job titles.
• LinkedIn Learning: Companies can support ongoing skill development, ensuring employees stay up to date with industry trends.
Skills Insights & Analytics: Businesses can track workforce skills and run gap skills analysis to pinpoint areas where training is needed, aligning hiring efforts with future demands.
Common questions about skills-based hiring
1. What are 5 soft and hard skills?
Soft and hard skills are equally important in hiring decisions.
Hard skills (technical abilities):
• Data analysis
• Programming (e.g., Python, Java)
• Digital marketing
• Financial modelling
• Graphic design
Soft Skills (interpersonal abilities):
• Leadership
• Critical thinking
• Adaptability
• Communication
• Emotional intelligence
2. How do you measure skill gaps?
Measuring skill gaps involves:
• Conducting skills assessments to identify strengths and weaknesses.
• Comparing employee skill levels against industry benchmarks.
• Using gap skills analysis tools to align workforce capabilities with business needs.
• Encouraging employee self-assessments and manager feedback loops.
3. What is an example of skill development?
A marketing professional learns SEO and data analytics through LinkedIn Learning courses, enhancing their ability to drive data-driven marketing strategies and improving their career prospects.
Conclusion and key takeaways
Skills-based hiring is transforming modern recruitment by shifting the focus from credentials to real-world abilities. Businesses that adopt this approach benefit from broader talent pools, improved hiring accuracy and greater workforce adaptability.
Key takeaways:
• Prioritise skills over experience to unlock untapped talent.
• Use skills assessments to objectively evaluate candidate abilities.
• Invest in employee skill development to bridge workforce gaps.
• Leverage LinkedIn’s hiring tools to find and engage skilled candidates.