Skills-based hiring and workforce education. These two powerful practices are gaining momentum separately, but when strategically aligned can deliver significant value to both employers and their people.
Skills-based hiring is a method for acquiring talent based on candidates’ skills and potential, rather than focusing solely on their educational background and work experience. It allows employers to expand their talent pools with more qualified candidates and fill vacancies more quickly. This also opens opportunities for individuals who may not have had access to education to be considered for jobs that they have the right skills for, regardless of their educational background.
But hiring is just the first step. To reap the benefits of this approach, it’s critical to continue developing and enhancing your people’s skills long after they’ve joined the company. That’s where workforce education comes in.
Let's delve into the three ways skills-based hiring and workforce education create a winning combination that paves the way for a talent strategy that delivers greater impact for both your people and your business.
Why skills-based hiring and workforce education build the strongest teams
In the past year, LinkedIn has seen a 21% increase in job postings advertising specific skills and responsibilities as opposed to only qualifications and requirements, and the number of positions that don’t require a degree increased by nearly 40% in 2020 compared to the year before.
The rise in skills-based hiring does not diminish the value of degrees, which are still critical for career advancement. Those with bachelor’s degrees generally earn 75% more with a median of $2.8 million over their lifetimes compared with $1.6 million if they only had a high school diploma. Furthermore, the higher the level of educational attainment, the larger the payoff.
Based on these figures, consider the additional impact on a family and a community where more employees are able to achieve this level of income growth. This doesn’t account for the social and economic benefits of higher education including increased social mobility and stronger health outcomes.
Benefit #1: Provides access to a wider, more diverse talent pool
A hiring process that heavily focuses on certain types of education or experience can result in a homogenous workforce, as people from underrepresented groups often lack access to quality education. For example, 61% of Black workers and 55% of Latinx workers are STARs, individuals who acquired Skills Through Alternative Routes. This means they have the skills needed to take on many hard-to-fill roles but lack a bachelor’s degree.
By removing traditional degree requirements from job descriptions and evaluating candidates based on their skill sets, you’re able to tap into a wider, more diverse pool of qualified talent. This includes the STARs mentioned earlier, who represent a strong talent pool of 70+ million individuals, which is nearly half of the U.S. workforce. In doing so, organizations reduce their time-to-fill, increase diversity and equity at all levels, and strengthen the pool of potential candidates for open positions.
However, just attracting diverse talent isn’t enough. Companies also need to ensure they have an inclusive culture that promotes learning and a commitment to employees’ ongoing career growth. This is why a workforce education program is an important element that allows employees to progress forward with the organization after they’ve been hired.
Benefit #2: Strengthens employee retention
Companies continue to struggle with retention as 50.5 million individuals in the U.S. chose to resign from their jobs in 2022, marking a notable increase from 47.8 million who did so in 2021.
Skills-based approaches have proven to improve a company’s ability to retain workers. According to research, organizations that prioritize skills-based approaches are 2x more likely to retain top-performing employees. Another report revealed that over 90% of organizations experienced improved retention rates and reduced time-to-hire after adopting skills-based methods.
Here are some ways that skills-based approaches make an impact on talent retention.
- Prioritizes skills: Candidates are a better fit for their roles and employers have a better understanding of employee skills, enabling them to offer more relevant development opportunities that encourage them to stay.
- Emphasizes “culture add”: Instead of hiring employees based on traditional “culture fit,” organizations select employees who share values but think differently, minimizing the risk that silos form.
- Advances workplace diversity: Creates a more diverse workforce, which is connected to better retention.
- Focuses on candidates’ potential: By giving employers an overview of the skills in their organization, they can identify high-potential talent and connect them to opportunities for internal mobility.
Benefit #3: Paves the way for effective career pathing
Combining workforce education with skills-based hiring is a talent strategy that can be further elevated by successfully integrating career pathing into the mix. Career paths empower your employees with knowledge of what skills they need to advance, as well as how to clearly attain them.
This promotes clarity and transparency, giving employees tangible career outcomes to strive towards throughout each step of their learning journey. This also helps employee learners avoid costly missteps, such as choosing the wrong path to a degree or certificate program, that doesn’t ultimately align with their career goals.
Best of both
Here’s the bottom line – organizations don't have to choose between skills and degrees. With this approach, you hire based on skills and competencies, then equip your people with the education they need to continuously advance through a workforce education program.