One of the biggest challenges recruiters face with hiring today is that there appears to be a significant labor shortage, with nearly 80% of employers currently facing challenges in finding and hiring the right talent. As of October 2023, according to the Bureau of Labor Statistics, there were 0.7 persons per job opening compared to April 2020, when there were 4.9. The demand for goods & services remains high, making this a challenging time for organizations needing service workers. A JobGet analysis showed that in the state of New York in 2023, there was a ratio of nearly 22 candidates for every available role as a cashier, demonstrating that a promising solution to this labor shortage could be adopting skills-based hiring practices.
Why are Transferable Skills so Important?
Transferable skills, also referred to as marketable, cross-over, or universal skills, are abilities and competencies that can be carried (or transferred) from one role or industry to another. These skills are often associated with, but not limited to, “soft skills” in any given industry. Think communication, customer service, leadership, etc. Focusing on transferable skills can unlock talent pools internally when considering internal mobility & externally.
Skills-based hiring provides a practical solution to address the ongoing labor challenges by leveraging the versatility of transferable skills. In the face of changing workforce dynamics post-COVID and a mismatch between traditional hiring criteria and the actual needs of evolving industries, skills-based hiring allows employers to tap into a broader talent pool, and more and more enterprises are leaning in. Recruiters are now 50% more likely to search by skills than they are to search by years of experience. Skills-based hiring allows employers to hire candidates who are sometimes considered “hidden workers,” who are also sometimes referred to as STARS (Skilled Through Alternative Routes), helping to reduce this disconnect between those employers and job seekers.
By prioritizing transferable skills over rigid (and potentially outdated) educational requirements, organizations can identify qualified candidates who possess the adaptable competencies needed to excel in various roles. Deborah Elam, president and CEO of Corporate Playbook, shares, “Many candidates will gain competencies from experience outside the bounds of traditional education and work. Certificate programs, community college, workforce development training, the military, volunteering, or caretaking – all of these are opportunities for acquiring skills…The old way of thinking doesn’t work anymore.” These candidates are not just qualified; they are potentially more successful and loyal than candidates hired based on traditional requirements.
“The current labor market is full of missed opportunities where incredible candidates are not getting matched to positions that could positively impact companies, the economy, and society.
We must minimize these missed opportunities and focus on building a deep understanding of people’s potential. We collectively need to shift our mindset so that we hire based on skills and learning, and not solely on degree or job title.
How to Assess Transferable Skills
Mindset
The first step in switching to a skills-based approach is to shift the mindset around hiring. If you can shift to a skills-based mindset, you not only gain access to a wider and richer set of job applicants but also help future-proof your organization. By using a skills-based approach to assess the transferable skills of candidates rather than the face value of their experience, you can help your enterprise diversify your talent pool, increase the chance of making a hire, and lower turnover rates. Skills-based hiring isn’t new - in fact, the entire state of Maryland altered its policies in 2022 to open up thousands of positions in various industries by removing archaic educational requirements. Embracing a skills-based hiring approach can quadruple the number of applicants, ensuring a more diverse talent pool of candidates that have higher retention rates - proving that skills, not degrees, are the true markers of success in today's workforce landscape.
Evaluate Hiring Practices
It is also important to streamline your hiring process for skills-based hiring. Evaluating your current approach can highlight areas that might not be skills-based friendly. For example - automation that screens resumes and candidates for experience and education rather than skills misses up to 27 million non-traditional candidates who have valuable experience and competencies. Sometimes, these changes take hard work - we all have the capacity to fall victim to our own implicit biases. Managers often prefer to recruit individuals who share similar educational or experiential backgrounds to themselves, and recruiters might be hesitant to take a chance on a candidate from a non-traditional path (such as STARS) as well. In fact, research from Burning Glass Institute indicated that although, at face value, a company or job posting might not require a traditional degree, more than half of the hiring managers did. These cultural hiring practices perpetuate the problem at hand and leave qualified candidates out of the talent pool. Evaluating your hiring practices is a critical step in working towards hiring using a skills-based approach.
Job Descriptions
In 1990, only those earning over $100,000 were more likely than not to have a four-year degree. By 2022, the lowest salary for those holding a four-year degree dropped to $65,000 (adjusted for inflation). This “degree threshold” highlights a real challenge for job seekers - and service industry roles are not exempt. Job descriptions that require years of experience and specific educational requirements for roles that may not truly require those skillsets only contribute to the hidden worker dilemma. Thankfully, within the last five years, there has been a noticeable change in the way we think about how we advertise open positions. More than 20% of current job listings on LinkedIn don't require a four-year degree, an increase of more than 30% over a six-month period. Instead, relying on outcomes and shifting the thinking to responsibilities instead of requirements can not only help you find the right candidate - it can also help you find them faster, with skills-based job descriptions receiving 14% more applications.
Behavioral Interviewing
Behavioral interviews can be a powerful tool for recruiters to assess a candidate's transferable skills and abilities. By asking questions about past experiences and behaviors, recruiters can gain insight into a candidate's ability to communicate, problem-solve, and collaborate. According to a study by the National Association of Colleges and Employers (NACE), 80% of employers believe that behavioral interviewing is effective in predicting a candidate's future job performance. Pre-employment assessments can also be a helpful part of this process - they assess knowledge and skills rather than screening words on a resume. Companies using pre-employment assessments report a 39% increase in job performance and a 26% decrease in employee turnover.
Resources for Skills-Based Hiring
As the evidence of the current labor market challenges increases with each year, many organizations have worked to come to the table with promising solutions and, more importantly, resources. For employers ready to make the changes necessary to adopt skills-based hiring, there are abundant toolkits and playbooks available to kick-start the process. To list a few:
By adopting a skills-based mindset and streamlining hiring practices, enterprises can make informed hires and contribute to building a workforce that thrives on versatility and adaptability. The shift to skills-based hiring is not just a response to the current labor shortage; it is a forward-looking strategy that aligns organizations with a more inclusive, efficient, and successful future.
Reach out to us today if you are interested in learning more about how JobGet can help you fulfill your need to hire hourly workers using a skills-based approach. Your next great hire is just a click away.