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Skills-based vs Experience-based Hiring

Recruitment hiring practices are anything but stagnant. They are constantly evolving for efficiency, effectiveness, and time and money purposes. One shift we have seen recently is the move from experience-based hiring to skills based-hiring. Experience based hiring is the more traditional recruitment strategy where your workforce is simply made up of employees with a particular education and experience background. Whereas skills-based hiring involves evaluating candidates based on their skill sets. This is usually done through tests, case studies, and assessments. Like many things, this has some benefits as well as some pitfalls.

First, let’s start with the pros:

1. Reskilling and Upskilling Potential

Practicing a skills-based hiring approach essentially gives you an opportunity to see the candidate’s performance before they are hired on. By doing this, the talent pool broadens up to candidates with matching skillsets as well as the potential to upskill and reskill. The purpose of the skills assessment is not to determine if the knowledge is memorized but the ability to know where to find the solution or answer to the problem. If the candidate can do so in a timely manner, it is a pretty good indicator that the candidate can perform the job well.

2. Diverse Talent Evaluating employees and new hires based on their skill sets instead of their work history can help level the playing field, which makes talent pools more diverse. Having requirements such as education can leave out a considerable number of minorities from your talent pool when they may very well possess the skills needed to succeed in the role. For the most part, assessments are objective, and every candidate receives the same test and is graded based on their answers. This essentially eliminates employment discrimination based on the protected categories such as race, religion, and location.

3. Employee Retention

Assessing the candidate’s skills increases the probability of hiring the right candidate, as they will already possess the appropriate skills and once hired, will need less time and resources to be fully operational. A well-placed candidate is also more likely to be content and fulfilled in their position especially when the organization prioritizes reskilling and upskilling as they will see this as a learning opportunity within their role. This will ultimately mean greater employee retention and lower turnover for your organization.

Now let's talk about the cons:

1. Tests Can Scare Off Good Candidates

Depending on the level of the role, a skills assessment might suppress some of your best candidates. It might seem like too much work depending on the level of the role. For example, it might not make much sense to provide a skills assessment for an entry level role when the candidates’ objective is to get their foot in the door and eventually possess or develop the appropriate skills. Candidates may also feel that assessments are too time consuming as there are added days of turnaround time during the hiring process. Although this can weed out candidates who might not be a great fit for your organization, it can still drive away perfectly good candidates.

2. Test may be Invalid

While tests are used to evaluate the candidate to perform the job the best, the assessment used can still be inaccurate for several reasons. The testing questions could be irrelevant to the job, could be out of date, and or even easy to pass (especially with our access to the internet). While assessments are used to hire the best candidate for the job, it could all be erased by not providing appropriate tests to capture the candidates’ skills. Testing needs to be valid and relevant to your role. As such, at least for skills assessments, there is no single test that applies to your whole organization. Each department will need its own assessments tailored to the level of the role at hand. And lastly, some things simply cannot be tested!

3. Expensive Testing Software

Although we discussed before how assessments can save your company money in the long run, testing software can be quite pricy depending on the type you purchase and for the roles you may be testing. Perhaps more importantly, the costs can vary wildly depending on your usage and your needs. Some skill assessment platforms maybe more useful for technical roles such as a Developer but not as applicable for support roles such as HR or Marketing. If your organization is interested in testing every role, you may need more than one testing platform. This can essentially make testing a challenge for your organization financially.

Recruitment is constantly changing, and it is imperative to put practices in place that best suit your organization and roles within your organization. While there are some downfalls to a skills-based approach, the increase in diversity, cost savings and potential for reskilling will set your organization up for long term success.

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