Beyond Degrees: Unlocking Talent with Skills-First Hiring

A skills-first focus is emerging as a transformative approach to talent acquisition and development. 

According to recent SHRM research, 1 in 4 employers indicated that they have had to switch to a skills-first mentality largely because they are seeing that their new hires are not able to keep up with the skills demands needed after one year on the job, explained Alex Alonso, Ph.D., SHRM-SCP, chief data & insights officer at SHRM.  

“In today’s rapidly evolving workforce, traditional hiring practices often fall short of identifying the true potential of candidates,” he said during a June 25 SHRM webinar.  

“Degrees and credentials, while important, may not fully capture the skills, competencies, and unique value that many people bring to the table,” Alonso explained. “Focusing on skills rather than just qualifications can help employers build a more inclusive, diverse, and high-performing workforce.”   

SHRM CHRO Jim Link, SHRM-SCP, added that he’s been anecdotally hearing about the implementation of a skills-first approach from other HR leaders. “We are in an environment where the skills we need are changing under our feet,” he said. “The right alignment of skills with the organization’s needs are hard to identify and hard to come by.”  

It’s not just technical skills that are important, Link added, but also what he calls “power skills,” such as decision-making, collaboration, negotiation, innovation, and persuasion. 

“The power skills play a much longer-term role in organizational success than they are given credit for,” he said.  

Alonso shared SHRM research showing there has been a rise in a diverse number of skills across professions. “Growth in skills like data analytics, customer service, and training AI are all on the rise,” he said. 

Toolkit: Transform Your Talent Acquisition Strategy with Skills-Based Hiring

Shifting to a skills-first approach will lead to the outcomes organizations really want from their workforce, Link said. “The days of a set, defined job description and list of tasks are coming to an end,” he explained. “Task orientation is moving to an outcome orientation. Employers are now playing catch-up with that shift. It will be important to be able to parse resumes for the skills underlying the work experience to help move the business forward. I’d like to see hiring managers in the future seek out the skills assessment of a candidate rather than their resume.” 

Alonso agreed, saying that employers have been using degrees and credentials as proxies that hamper hiring efforts.  

Resumes are the best representation of a person that can possibly be put on a sheet of paper, Link said. A quality skills assessment, on the other hand, provides a different picture — the capabilities and competencies that a person will bring to the workplace. 

Steps to Take

Link said that moving to a skills-based methodology is an exercise in change management, and   that HR has to communicate about the objectives and talk relentlessly about the benefits. 

“Before you begin the hard work, you must absolutely ensure that the work you are about to undertake aligns with the business,” he said. “Then conduct a job analysis. Build a skills taxonomy. Figure out how to assess candidates and employees. Find the gaps. Once you know what your critical skills are and what you need, then you can train, hire, and promote against that knowledge.” 

Link suggested running a pilot program first, beginning with a select group of roles that will generate value for the organization. While managing the pilot, continue to test it and make it better,. Measure the results. The outcomes should end up being much better aligned with business goals, not just today but in the future. 

Template: Skills-First Job Description

“One of the most critical parts of the process will be training hiring managers,” Link said. “It must be an organizationwide effort. Everyone must move with an agreed mindset.” 

Recruiters will also have to change the way they source. “But I don’t see a problem with that,” he said. “If you give effective recruiters a target, such as, ‘Find me a person who demonstrates skills A, B, and C,’ they will do that. That is how they are wired.”  

The Center for a Skills First Future 

In June, the SHRM Foundation launched the Center for a Skills First Future, an initiative that equips employers with the tools, resources, and insights to implement and scale skills-first hiring and talent development strategies in one centralized hub. The hub offers a comprehensive, structured framework to guide organizations toward a fully integrated, skills-first approach.  

The Foundation also partnered with SHRM’s education division to develop the Skills First Specialty Credential.