Thought Leadership
Skills-Based Hiring: Transforming the Employment Landscape
Shay Dalton
Managing Partner
As the labour market evolves, organisations have been reconsidering the importance and relevance of degree qualifications in their hiring practices. A trend known as “degree inflation,” which saw an increase in job descriptions requiring degrees even when the roles hadn’t changed, was particularly evident in the early 2000s. However, the trend experienced a reset in the aftermath of the 2008-2009 Great Recession, reducing degree requirements across numerous roles. This shift is particularly noticeable in middle-skill positions, which require some post-secondary education or training but not necessarily a four-year degree. The reset is also evident, though to a lesser extent, in higher-skill positions. Two waves have driven this trend. First, a structural reset that started in 2017 and was characterised by a move away from degree requirements in favour of demonstrated skills and competencies. Second, a cyclical reset that began in 2020, prompted by the Covid-19 pandemic, and involved employers temporarily relaxing degree requirements to find skilled workers during the health crisis.
Impact on equality
In the case of Ireland, the shift away from degree requirements has been particularly impactful in increasing female participation in the workforce. According to the latest Labour Market Pulse published by IDA Ireland in partnership with Microsoft and LinkedIn, skills-based hiring and flexible working conditions are integral to increasing female participation in the Irish labour market. The adoption of a skills-first hiring approach has the potential to increase the overall talent pool in Ireland more than six-fold and 20% more for women than men in traditionally male-dominated occupations.
Hard skills Vs soft skills
Despite the promising trends, it’s important to note that the degree inflation reset is a work in progress. A significant percentage of job descriptions still list degree requirements, effectively walling out a vast number of potential employees from the candidate pool. Additionally, while many companies have announced the removal of degree requirements, they often still exhibit a higher-than-average demand for college degrees in practice. This suggests that, while hard skills can be easily confirmed, degrees are still seen as a proxy for soft skills, which are harder to assess.
However, the shift away from degree-based hiring compels companies to think more carefully about the skills they need. More explicit descriptions of desired capabilities in job postings are increasing awareness among applicants about the importance of developing soft skills. This could influence skills providers to consider how they can update their curricula to include these skills.
Diversified talent pool
The elimination of inflated degree requirements is a critical step towards achieving equity in the labour market. Companies should reassess the assumptions underlying their recruitment strategies, reconsidering the use of blunt and outdated instruments in favour of more nuanced, skills-focused approaches. This shift is already opening attractive career pathways for traditionally overlooked workers due to the lack of a four-year degree. The potential result is a win-win situation: greater equity for job seekers and a more robust, diversified talent pool for companies to draw from.
Skills-first approach
This trend is particularly beneficial in the Irish context, where the government has set ambitious targets for gender equality and equal representation in leadership. A skills-first approach could be instrumental in activating the skills of underrepresented groups, including women, people with disabilities, and those without third-level education. Ireland can pave the way for a more inclusive, equitable future by eliminating barriers to well-paying jobs.
If you wish to introduce skill-based initiatives, it is critical to contextualise these ideas within your company’s unique circumstances, set clear objectives, and develop strategies for implementation. Here are some actionable insights based on the above points:
Develop a Learning & Development Strategy: Understand your company’s current capabilities and identify the areas where there’s a skill gap. Invest in the creation of learning and development programs that target these gaps. These could be in-house training, online courses, or educational partnerships.
Empower Employees to Shape Their Career Path: Create platforms or mechanisms that allow employees to share their interests and career goals. This could be an annual employee survey, open discussions, or a tool integrated into your HR system.
Empower Employees to Shape Their Career Path: Create platforms or mechanisms that allow employees to share their interests and career goals. This could be an annual employee survey, open discussions, or a tool integrated into your HR system.
Create Cross-functional Opportunities: Make it a point to allow employees to participate in projects or tasks outside their usual scope. This will not only allow them to broaden their skills but also to get a better understanding of the overall company operations.
Incentivise Learning: Make learning an integral part of your company’s culture. Encourage employees to take time out of their work schedule to engage in training and learning activities. Offer rewards or recognition for those who actively participate in these programs or demonstrate new skills.
Revamp Your Hiring Process: Transition from a credentials-based hiring approach to a skills-based one. Re-evaluate your job descriptions to focus more on the skills required to perform the job rather than academic or professional credentials.
Introduce Skills Assessments: Implement mechanisms to measure a candidate’s skills during the hiring process objectively. This could include technical assessments, practical exercises, or situational judgement tests.
Promote Lifelong Learning During Recruitment: During interviews, discuss the company’s learning and development programs and the opportunities for career growth within the organisation. This can make your company more attractive to potential hires.
