On paper, the candidate seemed like an ideal fit for the open financial reporter position. They had all the job description skills necessary to be successful in this role, plus previous experience — not an easy combination to find in a competitive talent market. But the candidate lacked a “Chartered Accountant” designation. Even though this role did not require that level of certification–they would not be a signatory for financial statements–the company still insisted on the requirement and refused to meet with the candidate.
This example is one of many we’ve seen, where companies sometimes place arbitrary experience or education requirements on open positions, excluding candidates who have the skills to succeed but lack a certain background. Instead of excluding outstanding candidates because they don’t tick a specific box that isn’t essential for a role, companies can increase chances of finding better candidates by switching to skills-based hiring.
What is skills-based hiring?
Skills-based hiring is an approach that screens for specific competencies and adjacent or transferable skills. A candidate for a tech role might not have a computer engineering degree, for example, but might be proficient in three coding languages or have other transferable skills. Or, in the case of our accountant, they lacked the Chartered Accountant designation but were proficient in recording financial data, tracking transactions and performing market research. Skills-based hiring expands the available talent pool by uncovering skilled professionals who would otherwise be overlooked, and this is particularly important for businesses hiring at scale.
Adopting a skills-based approach to hiring is a contemporary business imperative. The global talent shortage is chronic: by 2030, a predicted shortfall of nearly 85 million people could lead to about $8.5 trillion in unrealized revenues. Businesses that act now will gain a critical competitive advantage. But acting now means doing more than simply searching resumes for skills-based keywords.
“To truly make skills-based hiring work for your business, you need to change how you find resumes, evaluate them, and interview applicants. It’s a comprehensive, integrated shift,” says Greg Todesco, Managing Consultant, Korn Ferry.
Here’s where to focus your efforts first.
1 Find the right resumes: how to make applicant tracking systems (ATS) work for skills-based hiring
Applicant tracking systems (ATS) make it possible to review thousands of resumes quickly and efficiently. But an ATS is only as effective as its algorithm.
“Putting too much credibility on your system without understanding how it works can be risky,” says Greg Todesco. “Companies often assume their systems are working in their best interests without fully understanding how to modify them to screen for the right skills.”
Be aware of potential ATS blindsides. For example, your system may eliminate nontraditional candidates who are switching fields or re-entering the workforce after time off. Resume attributes like PDF formats or the use of graphics may also confuse the system. Consider which job description skills, certifications or experiences are truly essential and which are nice to have, but not deal breakers.
Finally, consider the threshold for calling a resume a “match,” especially for candidates coming from adjacent industries. For example, an IT cloud security candidate in the Oil & Gas industry may use a different vocabulary than someone at Amazon or Google but have identical skills. Their resume might only be a 50% match for the terms you’ve required, but they could be a 99% match for the skills-based jobs you are sourcing. You’ll only know if you take the time to read the resume.
2 Pick the right candidates: how to read resumes for skill-based recruitment
ATS can help narrow your candidate pool, but it should not have the final say on whether a candidate gets an interview. A thoughtful approach to reading resumes can help you select higher quality candidates and prepare for a better interview experience.
Some hiring managers only scan for titles and education. Then they end up using interview time to ask about details already on the resume or information that could easily be fact-checked after the conversation. Instead, look at how the candidate describes their skills and experience. Do they show their comfort with a certain skill by using industry vernacular or common acronyms? If they are in an industry-adjacent role, how strong are their transferable skills?
As you adopt a skills-based approach to resume review, challenge yourself to separate tenure from candidate potential. Time spent in one place isn’t a great yardstick for assessing knowledge or skill acquisition. Someone might be with a company for five years but stagnate in their role after the first year. Another candidate might be with a company for only two years, but actively grow in their position the entire time. Both could be strong fits–– but you’ll need to dig deeper into their resume to find out, rather than making assumptions off past job tenure.