Toolkit: Transform Your Talent Acquisition Strategy With Skills-Based Hiring
Streamline recruitment, decrease costs and turnover, and access tools and strategies to future-proof your workforce.
Why Skills-Based Hiring?
The workplace is evolving at an unprecedented pace, shaped by advancements in AI, shifting hiring trends, and the demand for a highly adaptable workforce. Thirty-nine percent of the core skills needed by workers will change or become outdated within the next five years, according to The Future of Jobs Report 2025 from the World Economic Forum.
Skills gaps exist in the IT field, as well as in the skilled trades, the latter consistently being one of the top three hardest-to-fill position types since 2016, according to SHRM’s 2024 Talent Trends report. Organizations are investing in upskilling and reskilling in addition to modifying their hiring practices. Learning loss within the K-12 education system associated with the pandemic has also disrupted the future talent pipeline.
The SHRM report also noted that over 75% of organizations struggled to fill full-time positions in 2024. At the same time, hiring norms remain outdated. For example, more than half of job descriptions still require a four-year degree, even though two-thirds of working-age adults in the U.S. don’t have one. As hiring practices evolve, employers that adopt a skills-first approach gain access to untapped talent, drive growth, and create more opportunities.
A skills-first hiring approach offers a solution to address critical workforce challenges and ensure strong talent pipelines for the future. When using a skills-first approach, talent pools expand nearly 10x on average according to a LinkedIn economic trends report. Organizations are also 107% more likely to place talent effectively and 98% more likely to retain high performers, according to Deloitte.
How Skills-First Talent Management Can Transform Your Organization
In this All Things Work podcast episode, Tiffany Nicholson, project director of Skills First Future for the SHRM Foundation, shares why prioritizing skills over traditional degrees can unlock access to untapped talent pools, dramatically reduce cost-per-hire, and improve employee retention.
The Center for a Skills First Future
The SHRM Foundation has launched the Center for a Skills First Future (SFF), a groundbreaking 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.
Challenges employers face in adopting skills-first practices include:
- Perceived lack of return on investment (ROI) and perceptions of risk inherent in skills-first adoption.
- Lack of trust and limited awareness of actionable practices among HR professionals.
- Difficulties of scaling and isolation both among employers and within industries that are implementing these practices.
The SFF hub offers a comprehensive, structured framework to guide organizations toward a fully integrated, skills-first approach. This model consists of eight key areas of organizational impact, beginning with recruitment, branding, and attraction. To align skills requirements with hiring processes, employers should:
- Prioritize skills in job descriptions.
- Collaboratively develop hiring criteria.
- Create and nurture partnerships with community organizations, educational institutions, and government agencies to tap into a broader talent pool.
Through the Skills Action Planner, organizations can receive a tailored road map for implementation:
- Quick wins: High-impact actions to start with immediately.
- Long-term goals: Structured objectives to build sustainable, skills-first practices over time.
- Curated resources: Tools, templates, and real-world examples for support.
Pro Tip
Organizations can map their skills-first journey and tailor their action plan by taking a 15-minute assessment within the Skills Action Planner.
The SHRM Foundation Skills First Future Hub
Hiring Strategies, Tools, and Templates
Adopting a skills-based hiring approach may require a mindset shift, but it is also key to diversifying the workforce. By screening out applicants who don’t have four-year degrees, companies exclude certain populations without knowing it.
Adopting a skills-based hiring approach may require a mindset shift, but it is also key to diversifying the workforce. By screening out applicants who don’t have four-year degrees, companies exclude certain populations without knowing it.
Most tools used to prescreen applicants, such as automated applicant tracking systems (ATSs), do not account for industry certifications or other credentials besides the four-year college degree. This can result in inconsistencies in how organizations’ ATS tools handle alternative credentials. SHRM has found that 45% of employees hold skilled credentials.
3 Steps Toward a Skills-Based Mindset:
- Ask whether someone really needs to have a college degree to fill an open position. Think about projects and the skills truly needed to complete them, not just degrees and job titles.
- Review how your automated systems are screening resumes or other information. Make any adjustments needed to enable scanning for skilled credentials and certifications.
- Begin to think about your organization’s work as a set of projects you’re executing. Log the specific skills you need to accomplish each project, and associate tasks with skill sets.
Using tools such as blind evaluations and assessments can also help expand the talent pool and create fairer and more objective hiring processes by focusing on abilities. Employers should note what the tools can and cannot do.
Blind evaluations and assessments can help:
- Support the overall goal of inclusion and diversity (I&D), which helps a company’s bottom line.
- Ensure qualified candidates are reviewed during the hiring process.
- Identify candidates’ specific experiences and skills in alignment with open roles.
Blind evaluations and assessments cannot:
- Provide a one-size-fits-all solution to remove bias from hiring.
- Ensure the diversity of the candidate pool.
- Identify all relevant skills that candidates possess.
The Secret to Hiring Smarter? Untapped Talent
In this All Things Work podcast episode, Clayton Lord, senior program director at the SHRM Foundation, unpacks how to reach and harness the potential of untapped talent pools — from military spouses to older adults to individuals with disabilities — to drive business growth and align your inclusion and diversity initiatives with new White House executive orders.
SHRM Resources
Skills Development and Access Policy Template
Skills-First Job Description Template
Skills-Based Interview Questions Bank
How to Make the Most of Hiring Candidates from Underemployed Groups
Inclusive Hiring Policy Template
Questions to Ask Yourself About Hiring Bias
Pro Tip
Make sure to verify candidate credentials and check that the prospective employee has the skills associated with the certification. Skilled credentials and certifications may come from any number of bodies, so it’s good practice to verify the certification’s quality.
I&D Compliance: The SHRM BEAM Framework
In response to the January 2025 executive orders from President Donald Trump that directly impact inclusion and diversity programs in the workplace, SHRM introduced the Belonging Enhanced by Access Through Merit (BEAM) framework to assist HR professionals in aligning their programs with federal laws.
The framework, which supports a skills-based hiring approach, is based on four core principles and allows HR departments to take proactive steps to align their inclusion and diversity (I&D) initiatives with evolving legal standards while fostering inclusive, merit-based workplaces:
- Merit as the Primary Lens: Talent identification focuses on measurable skills and performance, using skills-based assessments to eliminate biases and ensure decisions reflect true potential.
- Access Over Identity: Expand recruitment pipelines by partnering with community organizations to access skilled, nontraditional talent from vocational programs, apprenticeships, and upskilling platforms.
- Continuous Calibration: Use performance data and feedback loops to optimize talent management, foster development, and eliminate systemic biases in hiring, retention, and promotion processes.
- Operationalizing Inclusion: Embed inclusion as an operational strategy driven by a skills-first approach, leveraging AI tools to align talent capabilities with business goals while ensuring unbiased decisions.
There are five steps to an inclusive skills-based hiring approach using the BEAM Framework:
- Hiring policy: Start at the beginning by prioritizing an inclusive hiring policy.
- Job descriptions: Highlight the skills needed to do the job and list requirements based on competencies, not degrees or traditional credentials.
- Interviewing: Design interview questions that prioritize problem-solving abilities, critical thinking, and relevant expertise, rather than educational background, work history, or surface-level traits.
- Overlooked talent pools: Partner with community organizations to access untapped talent pools such as veterans, military spouses, or other individuals with nontraditional career paths.
- Avoiding bias: To avoid discriminating against potential candidates, focus on knowledge, skills, and ability instead of factors such as age, criminal history, or disability.
Breaking Through Bias: Ethical and Inclusive Hiring
In this All Things Work podcast episode, host Anne Sparaco and Michael Cohen, a partner in law firm Duane Morris’ employment, labor, benefits, and immigration practice group, explore modern hiring practices while tackling the subtle challenges posed by barriers such as affinity bias. Learn innovative approaches which range from broadening hiring criteria to moving beyond traditional four-year degree requirements.
Pro Tip
Asking candidates to respond to hypothetical scenarios provides a deeper understanding of their competencies and skills, enabling more equitable and effective hiring decisions.
SHRM Talent Acquisition Specialty Credential
Validate your expertise as a strategic talent acquisition partner. This credential addresses the specialized and rapidly evolving field of talent acquisition and is designed to develop your skills in creating a sustainable, high-performing workforce.
Expert Advice
Find more insights on skills-based hiring from SHRM thought leaders and industry experts in the podcast and webinars below.
Tips for Using Technology to Transform Recruitment
In this All Things Work podcast episode, Lori Kleiman, managing director of the HR solutions platform HR Topics, dives into how automation, AI, and data analytics are reshaping hiring processes, from screening to onboarding. Discover strategies for balancing technology with a personal touch, building inclusive practices, and keeping candidates engaged.
Have questions on implementing skills-first hiring?
Webinar
Beyond Degrees and Credentials: Unlocking Talent with Skills-First Hiring
Join the experts at SHRM for an engaging session on skills-first hiring that will uncover practical strategies to identify, assess, and hire candidates and offer resources to support your transition.
Webinar
How to Choose the Best AI Tech for Your Hiring Team
Gleb Tsipursky, the “Office Whisperer,” explores how generative AI tools can make recruitment more efficient, enhance the candidate experience, and help you make informed hiring decisions.
Webinar
7 Trends Shaping HR
SHRM President and Chief Executive Officer Johnny C. Taylor, Jr., SHRM-SCP, and Chief Data and Analytics Officer Alex Alonso, Ph.D., SHRM-SCP, explore trends defining the HR landscape in 2025, including the rise of skills-based hiring.
Webinar
Navigating the Two DEI Executive Orders: Merit-Based Practices and Belonging in the Evolving Policy Landscape
Learn how to apply the SHRM BEAM Framework to integrate merit-based practices and foster inclusive workplace cultures with actionable strategies and expert insights.
Webinar
Future Trends in HR: Essential Insights for 2025 and Beyond
Join Paylocity’s senior thought leader Shari Simpson to explore emerging HR trends, address the skills gap, and leverage AI innovations to stay ahead in the evolving workforce landscape.
Technology
AI is fast becoming an essential tool in modern recruiting strategies, but there are important legal considerations surrounding bias, accuracy, and privacy. Make sure the data you input for AI to use does not discriminate against certain groups.
AI in hiring: Set up anonymous application screenings to reduce unconscious bias and focus on evaluations of skills. Leverage AI and structured assessments to objectively measure candidates’ alignment with job qualifications.
AI for calibration: Data can help quantify the effectiveness of your hiring strategy. Important metrics include length of employment, retention rates, and promotion patterns.
AI recruiting tools: AI tools such resume parsers, which scan resumes and cover letters for words or phrases that match job descriptions, as well as chatbots can be game changers when it comes to automating time-consuming tasks.
AI best practices: When integrating AI tools into your recruitment workflow, include training on AI for the HR team and make sure you select the right tools for your specific needs. Start by assessing gaps and opportunities.
The Rise of AI-Powered Talent Acquisition
In this episode of The AI+HI Project podcast, host Alex Alonso interviews Adam Jackson, founder and CEO of Braintrust, a company that recently launched an AI-based recruiting platform. Discover how talent acquisition networks powered by AI are poised to revolutionize hiring with the promise of more efficiently and effectively connecting employers with the right candidates for the job.
Pro Tip
Implement fair-use practices to ensure AI algorithms are unbiased and continuously audited. Customize educational paths with AI to meet the needs of individual employees.