Toolkit: Transform Your Talent Acquisition Strategy with Skills-First Hiring
Streamline recruitment, decrease costs and turnover, and access strategies and tools to future-proof your workforce.
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 Thirty-nine percent of the core skills needed by workers will change or become outdated within the next five years, according to The Future of Jobs Report 2025 from the World Economic Forum. Research by Microsoft and LinkedIn puts the figure at 50% by 2030, with generative AI expected to accelerate this change to 68%.
A skills-first hiring approach, which de-emphasizes academic degrees, offers a business-oriented solution to address critical workforce challenges and ensure a strong talent pipeline for the future. It focuses on what candidates can do, rather then where they have worked or studied. The strategy offers more than an alternative to traditional hiring methods — it brings higher key performance indicators (KPIs) related to an organization’s financial performance and company culture. Skills-first talent management, which expands the approach to the employee lifecyle, has emerged as a strategic advantage, according to the SHRM report: A Skills-First Movement: Redefining How Organizations Hire and Grow. The report noted the following:
- More than one-third of organizations reported often or almost always using skills-first strategies in their hiring processes.
- HR ranks relevant work experience and demonstrated skills as the primary factors in hiring decisions, surpassing educational background and interview performance.
- Over 80% of HR professionals agreed that AI will change which skills are valued and that companies will prioritize AI-related competencies in hiring.
- Organizations that often or always use skills-first strategies were more likely to exceed financial objectives (35% versus 27%) and report positive company culture (86% versus 78%).
As hiring practices evolve, employers that adopt a skills-first approach have the advantage in accessing untapped talent, drivring growth, and creating new opportunities. Explore different implementation strategies, best practices, and resources to faciliate a shift to skill-first talent acquistion using this toolkit.
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 Rise of Skills-First Hiring
Skills-first hiring evaluates candidates primarily on their competencies and skills, regardless of how the skills were acquired. This becomes more important in widening the talent pool as organizations continue face a persistent talent shortage. Nearly half of organizations have had to modify or update roles that need to be filled with new skills, with 4 in 5 organizations having difficulty filling those roles, according to SHRM’s 2025 Talent Trends report. Skills-based hiring:
More than a third of HR pros are often or almost always using skills-first hiring, and more than half of those who said is is rarely used at their organizations are interested in implementing it as a part of their process, according to the skills-first report.
Skilled Credentials Dramatically Expand
Skilled credentials, sometimes referred to as alternative or nondegree credentials, can be defined as micro-credential, industry or professional certification, acknowledgment of apprenticeship (registered or nonregistered), or badging that indicates one’s competencies and skills within a particular field. Skilled credentials do not include traditional academic degrees or required occupational licensures (e.g., medical licenses or law licenses).
Skilled credentials are increasingly used in hiring decisions, and workers are responding to the trend. The number of unique credentials in the U.S. has more than tripled from 334, 114 in 2018 to over 1.85 million in 2025 as current and future employees seek to hone their skills and become more marketable. The perceived value of skilled credentials in hiring has shifted significantly upward since 2021.
Have a question about skills-first hiring?
Pro Tip
The surge in skilled credentials makes it more difficult for employers to determine their value and use them as a standard for hiring, slowing the adoption of a skills-first approach. HR must be thorough in credential sourcing to esnure credentials are reputable, and can develop relationships with reputable credential providers to create channels that help connect emerging talent with opportunities.
Hiring Strategies
Adopting a skills-first 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.
Both supervisors and HR professionals have indicated that a skills-first hiring approach is nearly as effective as educational requirements in attracting successful candidates.
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 undestand what the tools can and cannot do, such as provide a one-size-fits_all solution to remove bias and ensure the diversity of the candidate pool.
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.
Skills-First Hiring Recommendations
The Center for a Skills First Future
The SHRM Foundation Center for a Skills First Future (SFF) equips employers with the tools, resources, and insights to implement and scale skills-first hiring and talent development strategies in one centralized hub. The resource is designed to address key challenges employers face in adopting skills-first practices.
Addressing Key Challenges
- 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.
Integrating Skills-First Hiring Practices
The SFF hub offers a comprehensive, structured framework to guide organizations toward a fully integrated, skills-first approach using a model that 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.
Creating a Roadmap for Implementation
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.
SHRM Foundation Skills First Specialty Credential
Lead the shift to skills-based talent management, ensuring fairer, more effective hiring and development practices. Empower your organization to unlock hidden talent and foster agility by prioritizing skills over traditional credentials or degrees.
Tools and Templates
Use these curated form templates, checklists, quizzes and policies to stay at the forefront of skills-based hiring best practices.
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
- Inclusive Hiring Policy Template
- Questions to Ask Yourself About Hiring Bias
- Quiz: What Do You Know About Unconscious Bias?
- Unbiased Interview Checklist
- Inclusive Leadership Interview Questions for Executives
Leveraging AI in Skills-Based Hiring
AI as the need for AI-related skills increases, it is simultaneously fast becoming an essential tool in modern recruiting strategies. However, 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, discover how talent acquisition networks powered by AI are poised to revolutionize hiring by more effectively connecting employers with the right candidates.
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.
I&D Compliance: The SHRM BEAM Framework
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-first 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.
There are five steps to an inclusive skills-first 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, explore modern hiring practices and learn innovative approaches to tackling the subtle challenges posed by barriers such as affinity bias.
SHRM Resources
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.
Expert Advice
Find more insights on skills-first 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, discover strategies for balancing technology with a personal touch, building inclusive practices, and keeping candidates engaged.
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