Skills-based vs role-based hiring: Sharpening your talent strategy to be future ready

In today’s challenging talent landscape, organizations globally are making the move towards skills-based hiring. By pivoting from a sole focus on candidates’ academic qualification and specific work experience to the skills needed to fulfil open roles, organizations can draw talent from a wider, more diverse talent pool to bridge their talent gaps. 

In APAC, India is gradually warming up to embracing a skills-based approach.

AMS recently held a roundtable session at SHRM India Annual Conference 2023 and spoke to some of the region’s leading talent acquisition (TA) professionals on skills-based vs role-based hiring. The panelists explored ways to create more flexible, scalable, and innovative TA teams, and to make business success a reality. They also outlined ways that organizations can hire the right people with a focus on skills, charting a path to creating future-ready teams.  

Below are the key points from the discussion.  

Transitioning from role-based to skills-based hiring
Moving to a skills-based hiring approach is a significant change for many businesses. As one of the panelists pointed out, “It’s not something that can happen overnight.” Good news is, many organizations in India have embarked on the journey, albeit in small steps.

Several panelists had slowly introduced skills-based hiring by combining both role-based and skills-based approaches. Many are trialing small pilot programs – shifting to skills-based hiring for some areas of the business where transferable skills are more apparent and relevant. But as skills-based hiring is not a one-size-fits-all approach, other business areas in which the case for change is not as obvious, have yet to adopt the approach.

Across the panel, the general sentiment was that a skills-based approach works well for roles in the mid to lower levels of seniority, as being in the management level would still require a level of experience. With that, role-based hiring will be more appropriate for the latter. As one expert point edit, “Experience adds to the depth of leadership.”   

Some speakers had gone much further in their skills-based transition journeys. One of the experts discussed how they have changed their new job descriptions and ads to highlight skills and capabilities, rather than experience and education. The business has now made this mandatory across all their new hires. “It’s a big cultural and management change, and it means rewiring people’s expectations”, the panelist explained.   

Improving time-to-hire
Adopting a skills-based hiring approach has helped many businesses open new channels of talent, as well as improve efficiencies in the hiring process.

Two key issues many panelists were facing were the long time to hire and ability to onboard candidates quickly. By switching to a skills-based approach, many said they were able to remove many common hiring barriers – such as losing out on skilled candidates due to the lack of specific experience, receiving applications with irrelevant skills, and minimizing the common (and costly) issue of ‘mis-hires’.

By being able to place the right person for the role at speed, TA teams have benefited from this more efficient hiring process.

Creating a wider talent pool 
One of the key discussion points from the session was highlighting how a focus on skills, rather than academic qualifications, creates a platform to drive better diversity, equity, and inclusion (DEI) within a business.

The approach allows people with transferable skills to fill roles that may previously have been out of reach for them, especially if the job requirements were based solely on experience or the institute a candidate studied at. This is especially true for typically overlooked talent groups, such as candidates from more diverse backgrounds. A skills-based approach enables organizations to make more equitable decisions based on an employee’s full range of skills, rather than the job description. Shifting the focus to value skills more than experience, education, or previous workplace, helps organizations to avoid biases against certain talent groups. 

As one of the roundtable experts highlighted, “By education, I’m an engineer. But I’ve spent most of my career in investment banking, and I’ve been working in HR only for the past five years.” By focusing on transferable skills, candidates and internal employees have the opportunity to excel in roles that they may not have been considered qualified to do historically, despite possessing all the right core abilities.

However, changing to a skills-based mindset can be challenging, and the approach needs to be driven from top-down. Leadership needs to bring this new approach to their TA and HR teams, and as one panelist said, “To drive changing biases within an organization, employees require need to break their circles first.”

Future-proofing through upskilling and reskilling 
With the intense competition in the market, more organizations are looking at upskilling and reskilling their incumbent staff. As one panelist put it, “You cannot buy talent endlessly. You will need to build it.” 

In addition, with technology driving the business’ ever-changing needs, employee skills need to keep up with the change too. One panelist emphasized that “Every skill set you see today is going to disappear very quickly. What we had 10 years ago is now obsolete.” 

Many panelists agree that adopting a skills-based approach can give employers the ability to upskill workers and provide learning opportunities. This enables internal mobility and boosts retention rates, demonstrating that the organization values the employees’ skills and potential.

Recognizing that skills are the future, not roles
In today’s challenging landscape, a skills-based approach can help close the talent gap for organizations by finding the right talent, more quickly.  

As most panelists agreed, there is a strong appetite to look at skills rather than roles. The next step is to convince those at the leadership level to get behind it. As one panelist said, “We have to shift and start investing in skills. If we only invest in role-based hiring, we will all fail.” 

Need help in making the transition to a skills-based approach?  Contact us today to learn more about how AMS can help drive forward your skills strategy.