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Why Skills-first Hiring is the Solution to the Global Talent Shortage

Currently, the world is facing an acute shortage of talent in the work environment. Due to a combination of factors such as the COVID-19 pandemic and an overall aging population, many organizations find themselves grappling with a talent shortage. A solution to combat this issue may lie in the skills-first hiring approach, in order to remain competitive in this environment, organizations broaden their hiring horizon and look at a wider range of candidates. Viewing workers not as merely a human resource, workers who are used to fulfill certain roles and responsibilities, but as human capital which holds potential for exponential growth and future GREATness.


As it currently stands more than 50% of the American population is unemployed despite the fact that as of February 2023, there were roughly 9.9 million job openings. This discrepancy is caused in large part by organizations using traditional hiring. Using this method eliminates 64% of those of working age, purely due to a lack of adequate educational background. A majority of these open positions require applicants to have, at minimum, a bachelor’s degree. As a result, this requirement excludes roughly 80 million Americans who are of working age. If this trend continues it could further increase the gap of income inequality, as well as create an environment where individuals without a degree are at a disadvantage. As it stands, there is a mismatch between the demand and supply of talent, leading to a global talent shortage. The shortage issue is being exasperated by other disruptions which worsen the situation. Due to the uncertainty of the economy, it has become increasingly vital that businesses identify their opportunities and threats. In order to address this imbalance between demand and supply for talent, adopting a skills-first approach when hiring is the best option.


Skills-first hiring is not a new concept but will most likely gain in popularity, however, it should be viewed as a mindset rather than merely a hiring strategy. The thought process behind this method of hiring is to look at the skill and ability of the candidate, rather than focusing on mainly their academic qualification and background. Many employers, roughly more than 45%, have already begun to embrace this new method of hiring. Adopting skills-based hiring allows the organization to employ individuals in positions in which they are skilled, tackling the talent shortage problem, while simultaneously increasing opportunities for those who may not have an educational background to increase their work experience. According to a report by Intelligent, 53% of hiring managers report their companies have eliminated a bachelor’s degree as a requirement for certain roles. Although this is a step in the right direction if organizations which to fully submerge themselves in the skills-first hiring mindset there are other things they can do. An article written by Forbes suggests prioritizing skills development over the long term. Allowing entry level employees opportunities and options to gain new certifications, learn new skills and develop other abilities, or take classes or online courses. Allowing them to branch out and increase their abilities also shows the employees that they are valued within the organization.


Hiring based on skill and ability allows the organization to expand their talent pool in the long term. It also creates an opportunity for non-traditional candidates to qualify and be hired into the workplace, which in the long term, would help reduce both the inequality in hiring and imbalance between demand and talent. With a skills-first hiring approach, this increases the source of potential recruits, limiting the amount of time and money needed to train these employees. Those hired based on the skill needed for a certain position will require little to no training in the area, saving time during the onboarding process. Despite some candidates having a degree, that does not necessarily mean they will be best suited to the position. Especially in the current job climate, there are other methods for a company to judge a candidate’s hard and soft skills; pre employment testing, certifications, and past employment history. Individuals hired through skill-based hiring are also more likely to stay at the organization, leading to a longer retention of high quality talent. A study published by the Harvard Business Review found that those without a traditional four year degree remained at their companies 34% longer than those with a degree.


As the amount of empty positions begins to increase within companies, it is time for organizations to embrace a new mindset in regard to hiring. Skills-based hiring is a mindset that will benefit the organization in both the short and long term. Whether or not the candidate has a standard four-year degree should not be the determining factor in the eligibility. If the gap of inequality is to be closed, organizations need to come to terms with the fact that skill is not limited to those with degrees. Employees and their abilities can longer be viewed as merely a resource but as human capital.

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