Skills-Based Hiring’s Advantages

In the early 2000s, “degree inflation” happened because some companies added degree requirements to job descriptions where they hadn’t been before. The rate of inflation was made worse by fast technological progress and automation in almost every field. Employees needed good social skills in order to solve problems, talk to clients, and work with their coworkers.¬†

Suddenly, the use of computers and software was necessary for many occupations. Companies chose the easier route of using a four-year college degree as a stand-in for those specific people and technological abilities rather than looking for people with those exact skills. Employers often took it for granted that workers with four-year degrees could use computers, were knowledgeable in the Microsoft Office Suite, and had strong interpersonal skills.


While some applicants were hired using this technique, many more highly competent people without college degrees were also unemployed as a result. Many talented and qualified people were not even considered for jobs because they didn’t have the degree that was needed. Degree inflation has been especially bad for middle-skill jobs, which require more than a high school diploma but less than a college degree.


When the job market is tight, like it was during and after the epidemic, employers need to find better ways to find and hire workers. One such strategy is to waive the degree requirement for available jobs if it really isn’t necessary for the role to be performed. Employers can check technical or “hard” skills with pre-employment tests and employment histories.¬†

They can check “soft” skills by adding more information to job descriptions about the skills they really want, like the ability to work with others, lead, and think critically, instead of just hiring based on a degree. Why not take a close look at the talents and abilities a job truly demands and develop a job description that correctly and openly reflects those competencies instead of making assumptions about a candidate with a college degree?


Enterprising person


People who don’t have a bachelor’s degree but have work experience and skills that qualify them for higher-paying jobs are rewarded for their hard work. The name “STARS” (Skilled Through Alternative Routes) was first used by the National Bureau of Economic Research in 2020. STARs have skills they’ve learned at community college, on the job, in bootcamps, certificate programs, the military, or on the job, but employers often overlook them, and degree requirements limit them.


There are presently more than 70 million STARs in the U.S., according to Opportunity@Work, whose stated aim is “to rewire the U.S. labor market so that all persons skilled through alternative routes (STARs) may work, study, and earn to their full potential.” STARs are made up of people from every race, ethnicity, gender, location, and generation in the US. According to Opportunity@Work, STARs make up the bulk of black, Hispanic, rural, and veteran employees. Byron Auguste, who made Opportunity@Work, says that when employers “demand” that all their employees have a four-year degree, they miss out on skilled and diverse people. Both the employees and the company suffer from it. This is not always the case. Smart businesses are increasing “screening in” talent based on performance and potential rather than “screening out” people based on lineage.


Opportunity@Work has done a lot of research that shows how bad it is that companies have been ignoring STARS and the workforce in general for a long time. The discriminatory practice makes it much harder for businesses to find talented people and limits economic mobility for half of the workforce. According to their research, a STAR must work for 30 years before earning what a college graduate does on their first day of employment.


Skills-Based Hiring’s Advantages


Opportunities for recruiting diverse candidates:


As was already said, hiring based on skills greatly increases a company’s pool of talent. Entry-level positions rarely require a four-year degree. Companies severely restrict their access to qualified candidates and impede their recruiting efforts by requiring a degree for these positions. The Bureau of Labor Statistics says that more than 60% of working adults over the age of 25 do not have a four-year college degree.


Higher Retention


Anything a company can do to keep good talent should be a priority because it can be difficult to attract and keep top talent. It’s interesting to note that research has shown that non-four-year degree holders typically stay with their employers for a long time. Candidates without four-year degrees stay with companies 34% longer than their degree-holding peers, according to LinkedIn research. Employees with college degrees have shorter retention times than those without degrees, according to a Harvard Business School study. The fact that non-degree holders have a higher retention rate could be due to a number of things, such as being more engaged and willing to help the business.


Growing Diversity


One of the worst things about degree requirements is that they make the workplace less diverse and widen the gap between rich and poor. All racial and ethnic groups in the United States have seen an increase in the number of people with bachelor’s degrees. But the proportion of people with bachelor’s degrees varies considerably by group. By racial identity, the proportion of Americans with bachelor’s degrees in 2021 was as follows:


among Asian Americans, 61%

of White Americans, 42%

28% of Americans of color

Among Hispanic Americans, 21%

The key to creating a diverse workforce is skills-based recruiting because it does away with the concept of the “ideal applicant.” If a person can do the job, they will be treated the same.


The Best Practices for Skill-Based Hiring


Determine Required Skills


The employer needs to say what qualifications are needed for each job in the organization. In 2021, the DeBruce Foundation and KC Rising did research together to find the six skills that are most important for getting into and doing well in the workforce. KC Rising is a regional economic development effort in Kansas City. As part of the study, a group of researchers from the Urban Education Research Center got together with young professionals who had just started their careers to talk about the skills they needed to do well in their jobs based on what they had learned on the job. The young professionals were between the ages of 21 and 35. The resultant six crucial talents are as follows:

Communication: The capacity to establish successful connections with coworkers, customers, and superiors via a variety of channels

Collaboration is the ability to get people to work together in a way that takes advantage of everyone’s skills and knowledge.


Critical thinking is the capacity to solve problems and foresee future difficulties and possibilities.

Building trustworthy connections and showing people respect and dignity are examples of interpersonal skills.

Proactivity: The capacity to act independently and contribute to an organization

The capacity for autonomous work, accountability, task management, and meeting deadlines

These basic skills, or some version of them, are probably needed for most jobs, so they should be taken into account when figuring out what skills are needed for a job. Once these skills are learned, hiring managers need to learn how to spot them in an interview. They can do this by asking behavioral questions that give applicants a chance to talk about their skills and abilities.


Establish Talent Management Pipelines


Talent management pipelines may be established after the skills necessary for positions have been identified. For talent pipeline management to work well, there needs to be a pool of possible applicants before a new job is open. In other words, recruitment and sourcing are ongoing processes. To build a talent management pipeline, you can use modern sourcing platforms like Reddit and Meetup, go to recruitment events with a polished recruiting presentation focused on the future (rather than trying to fill existing jobs), and consider rejected prospects for other positions that may be a better fit for them.


Associating with community-based organizations


Collaboration and corporate achievements Teamwork Businesses may choose to work with community-based organizations in their area that have access to STARs instead of relying on college degrees to get skills. There are groups in many towns that help “opportunity youth,” or young people between the ages of 16 and 24, who are not enrolled in school or employed. By establishing connections between service members, military¬†

Spouses, veterans, and companies: Hiring Our Heroes offers employment services to the military community and helps both groups economically.


Retraining and Counselling


Retraining and upskilling are quite popular right now. According to McKinsey, about 70% of enterprises are investing more in talent development today than they were before COVID-19. What does it really entail, and how do upskilling and reskilling differ from one another? Upskilling and reskilling are both ways to get new skills, but there are important differences between the two. Employees that are upskilled gain information and acquire new abilities that are relevant to their existing positions. The goal of reskilling is to give workers new skills they can use in a different job within the company. Employers can fill open positions with people they already know, and people can do well at work by upskilling and reskilling.

Employers and employees alike don’t always realize how easily an employee’s skills can be used in a different job. For instance, 5.9 million restaurant employees lost their jobs as a result of the epidemic, with a significant number of them being food servers. One of the top careers on LinkedIn right now is customer service, which requires a skill set that more than 70% of those servers possess. There could have been a lot fewer unemployed former food servers if servers and recruiting managers for customer service representatives had known this.


Upskilling and reskilling workers might be the answer for the 87% of organizations that either already have or anticipate having a skills gap among their present workforce. Data shows that most modern workers think that opportunities for growth and learning are the most important parts of a good business culture. Employees are more likely to stay with a company if they have the chance to move up or around within it.


Contact Mishkaat Solutions


The workplace is always developing and changing. Trends develop over time. Trying to keep a ship steady may be scary for the leaders and HR people in companies today. The commitment of Mishkaat Solutions to its customers, however, is constant, steadfast, and unrivaled. Planning your 2023 HR retention and recruitment strategy is now necessary. Call now.




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