Why Shifting To Skills-Based Hiring Makes Sense In A Tight Labor Market

Labor shortages have become increasingly common in recent years. In fact, as Julia Pollak, ZipRecruiter chief economist, stated in the release of the firm’s first annual employer survey in October, “Employers increasingly understand that labor shortages are here to stay, given current demographic trends and government policies. In response, they have made a dizzying array of changes to their hiring processes, tech stacks, benefits offerings, and remote work policies over just the past year.”  

Besides offering new benefits, higher pay, and alternative working arrangements to entice applicants, what else can employers do? Switching to skills-based hiring might be the answer companies are looking for. 

The term “skills-based hiring” refers to a hiring method that focuses on a candidate’s competencies, rather than their educational degrees or certificates. The ZipRecruiter survey found that 72% of respondents now prioritize skills over degrees.  

With skills-based hiring, employers search for candidates with great soft skills and a willingness to learn, with the intent to teach them some necessary skills while on the job. The survey found that employers are making investments in candidates with the right soft skills, such as student loan assistance (10%) and tuition assistance (15%); and 30% said they added new employee training and development programs in the past year. 

Seeking candidates in this way requires a shift in perspective. Rather than looking for a match in qualifications first, you’re looking for a match in values and character. “When you talk about hiring somebody and judging how good of a fit they are, it comes down to three things: what they know, what they’ve done, and who they are,” says Bob Coppedge, CEO of Simplex-IT, an MSP in Stow, Ohio. “Everything falls under at least one of those three categories when you’re evaluating people. When you talk about skills-based hiring, what they know becomes less important. What you’ve done is interesting, but I really want to know who you are. Who do you aspire to be? What are the things that make you passionate; what sparks your interest? Because those are the things that really compel you to learn.”  

Juan Carlos Bosacoma, CEO of CIO Landing, an MSP in Chicago, adds that a focus on customer service is critical. “At the end of the day, the people that pay our bills are the clients. So [the candidate] has to be willing to be service-oriented. The other crucial elements are a learning mindset and a willingness to collaborate with other people.”  

Every company is different in the specific personality traits that they prioritize, but the overall focus on soft skills is clear. 

Because the organization takes on the task of educating its employees in this hiring format, the company must have a system in place to make continuing education a key element of the company culture. CIO Landing works with each employee to create a career path; this includes both short- and long-term goals. Simplex-IT uses incentive programs for personal development, where bonuses and raises are awarded when employees learn new skills or earn certifications. Beyond this, says Coppedge, “We also teach each other. I want my senior people to be just as focused on helping the junior people get better as they are on improving themselves, because the smarter everybody is, the smarter everybody is.”  

Many employers are literally paying their employees to learn. By allotting time each week to continuing education, it becomes a crucial part of the company culture, from the very top of the organization. “It’s about making learning a priority,” says Coppedge. 

This does require an investment. “The investment is the time that they need to put into training,” says Bosacoma. “An employee who is training is obviously not producing anything. When they’re shadowing other people, it also takes time from that colleague.”  

Besides this investment in time, there is also a financial investment—in the company’s infrastructure, training tools, resources, and employees. “Your people are probably the biggest cost of your organization,” Coppedge says. “But it’s like that old adage: ‘The champion lumberjack spent a quarter of his time sharpening his ax.’ If your people are not spending a good amount of time constantly improving, if they’re not learning anything new, then your people are a year behind. That’s because in the tech industry, everything changes every year.”  

To stay at the cutting edge of the tech industry, then, investing in the knowledge of your staff is simply not optional. 

Training Employees Your Way Vs. ‘Unlearning’ 

While it is true that selecting candidates with plenty of industry experience and education mitigates some of those investments that less-experienced candidates require, hiring choices like these come with challenges of their own. Rigidly requiring candidates to meet a specific set of qualifications will result in a smaller candidate pool in an already-tight labor market. Additionally, “when you hire people with certain skills,” says Bosacoma, “sometimes they’ve learned to do things in a way that may not be aligned with how you want something done. Each company has certain processes and procedures, and those may run counter to what that new hire is used to. Sometimes, it’s easier to train someone from scratch, rather than have them unlearn things.” 

Regardless of the pros and cons of each hiring method, “we tend to make the topic of hiring people too technical sometimes,” says Coppedge. “We’re too focused on metrics and measurements. The bottom line is: You want to hire people. IT is a field that is based on growth, new technology, and constant learning. If you do not hire people who love that, then you’re either going to have to drag them kicking and screaming, or your company is going to fall that much further behind every year. You have to develop the organizational culture and structure so that the organization as a whole is always learning, always improving. The employees will follow that.” 

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ABOUT THE AUTHOR
Sarah Jordan is a freelance writer, editor, and Fort Worth, Texas, local. When she’s not writing blogs or articles for clients, you can usually find her working on her novel’s manuscript.

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