Skill Based Hiring vs. Experience Based Hiring

In the evolving landscape of talent acquisition, the debate between skill based hiring and experience based hiring is gaining prominence. Skill based hiring prioritizes a candidate’s specific abilities and competencies relevant to the job at hand, while experience based hiring emphasizes a candidate’s work history and tenure in similar roles. Research indicates that skill-based hiring is more than twice as effective in predicting job performance compared to experience-based hiring. This approach aligns with the dynamic nature of today’s job market, where the rapid pace of technological advancement often renders specific past experiences less relevant. 

The shift towards skill based hiring can be traced back to the early 2000s when companies began inflating degree requirements for jobs that traditionally did not require them. This trend, known as “degree inflation,” was particularly pronounced after the Great Recession of 2008-2009. However, in recent years, there has been a concerted effort to move away from such requirements, with many organizations now focusing on the skills that candidates can bring to the table. This transition is especially beneficial in middle-skill jobs, which do not necessarily require a four-year degree but do require specialized skills that can be verified through certifications, assessments, or practical demonstrations. 

Skill based hiringThe Harvard Business Review highlights that many companies are moving away from degree requirements and toward skills-based hiring, which is advantageous for both workers and employers. This approach not only helps in tapping into a wider talent pool but also promotes diversity and inclusivity by providing opportunities to individuals who may not have traditional educational backgrounds but possess the necessary skills. Moreover, it encourages a culture of continuous learning and development, as employees are motivated to acquire new skills to remain competitive. 

A skills based approach is particularly relevant in the aftermath of the Covid-19 pandemic, which has led to significant job displacement. For instance, food servers who lost their jobs during the pandemic were found to possess over 70% of the skills required for customer service roles, one of the most in-demand jobs on platforms like LinkedIn. Recognizing the transferability of skills across different sectors can facilitate a smoother transition for workers into new industries and roles that are in high demand. 

Furthermore, skill based hiring is 2.5 times more predictive of future performance than hiring based on work experience. This statistic underscores the importance of identifying the skills gap, which is the difference between what a job requires and a candidate’s background and experience. The skills gap is most pronounced in STEM roles, where the rapid evolution of technology demands a workforce that is adaptable and skilled in specific areas. 

In conclusion, the transition from experience based to skill based hiring reflects a broader change in the workforce landscape. It emphasizes the importance of adaptability, continuous learning, and the recognition of transferable skills. As organizations strive to remain competitive in a fast-paced world, adopting a skills-based approach to hiring and development is not just a trend but a necessity for future success. This article, drawing upon recent research and expert insights, provides a comprehensive overview of the merits of skill-based hiring and its implications for the modern workforce.  

 References: 

  • Skills-Based Hiring Is on the Rise – Harvard Business Review 
  • You Need a Skills-Based Approach to Hiring and Developing Talent – Harvard Business Review 
  • Skills vs. experience: What matters more for hiring? – TestGorilla 
  • Skills-Based Hiring: What It Is and Why It Works – Built In 
  • What is skills-based hiring? – Handshake 

At 360 Talent, we believe that the future of work demands a fresh perspective on talent management. In this era of constant change and innovation, traditional approaches are no longer sufficient to empower your workforce and drive organizational success. Our mission is to guide you through this transformation, offering modern strategies that will redefine how you manage and develop your most valuable asset—your people.  Contact us or book a discovery call today to learn how 360 Talent can help your organization grow.

Author: Chris Stanzione
Chris Stanzione is the Managing Partner and co-founder of 360 Talent, a recruiting and people ops consulting firm in Atlanta, GA. You can connect with Chris on LinkedIn, Instagram, or the old-fashioned way at Chris@360talent.io.

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