Why Skill-Based Hiring is On the Rise?
We live in a new world where archaic rules no longer apply. This is the era of the gig economy, remote workplaces, technological expertise, and high stakes. The modern age workforce is also a lot more evolved than a decade or two ago when people used to stick to one job throughout their lives. The market has evolved rapidly with the advent of digitization. Skilling and reskilling are more important than ever to maintain an upward trajectory in one’s career.
Quite naturally, the hiring practices have transformed too. Especially after the pandemic, which led to significant transformation in the workforce dynamics, there has been a major push towards skill-based hiring as opposed to the traditional route. The static parameters like CV and experience no longer move the needle like they once did. For employers, it’s all about how quickly one can adapt to the dynamic environment and evolving industry needs.
Enter the Era of Skill-Based Hiring
Skill-based hiring, as the name implies, prioritizes a candidate’s specific skills over qualifications or past experiences. This approach delves deeper than traditional markers like degrees and job titles, focusing on the abilities required for the job and matching them with the candidate’s competencies. According to a recent McKinsey report, skill-based hiring is five times more effective in predicting job performance than educational qualifications and twice as predictive as work experience.
Another study indicates that over three-fourths of employers use skills assessments in their hiring process, with more than half employing role-specific skill tests. This shift towards skill-based hiring is driven by the need to ensure candidates can navigate complex regulatory frameworks while driving innovation and delivering value in sectors like finance and technology.
Mutually Beneficial for Employers and Employees
Both employers and employees benefit from skill-based hiring. On one hand, employers gain access to a larger talent pool by focusing on skills rather than static criteria like educational qualifications. On the other, this approach levels the playing field for candidates from diverse backgrounds. Creating skills-based job postings leads to more applications and a broader set of talent. Additionally, skill-based hiring results in reduced costs, improved retention rates, and faster hiring processes.
Also, employment opportunities in sectors such as BFSI or Insurtech not only bank on innovation but also have to work within stringent regulatory frameworks. So, the employers here are looking for candidates who can strike a balance between the two. In these sectors, the stakes are exceptionally high, and both employers and employees cannot afford any lapses. Consequently, employers prioritize domain expertise and specialized skills, leading to a preference for skill-based hiring.
In these industries, every individual hired must adeptly navigate complex regulatory landscapes while simultaneously propelling innovation and delivering substantial value to customers. So, this entails that the employee might need to regularly upgrade their skills with necessary certifications and courses. When employers assess candidates on their demonstrated skills and abilities, it naturally leads to better alignment with organizational objectives, and thus, higher job satisfaction and opportunities for growth for employees.
How Employers are Facilitating Skilling and Reskilling
Employers are actively spearheading initiatives to facilitate skilling and reskilling, recognizing the imperative of a continuously evolving workforce in today’s dynamic landscape. Acknowledging the swift pace of technological advancements and industry transformations, companies are investing in programs that empower their employees to acquire new skills and adapt to emerging trends.
One prominent strategy involves the implementation of dedicated training programs and workshops tailored to the specific needs of the organization. These initiatives aim to bridge skill gaps, ensuring that employees possess the competencies necessary for current roles and future challenges. Additionally, employers are leveraging online platforms, courses, and certifications, making learning opportunities accessible and flexible for their workforce.
Promoting a culture of continuous learning, employers encourage employees to take ownership of their professional development. By fostering an environment that values learning and growth, companies inspire individuals to actively seek out opportunities for upskilling and reskilling. It is a holistic strategy that not only helps companies find and retain the right talent but also ensures a dynamic workforce, keeping all stakeholders competitive and satisfied in the long run.
