In a previous article, I highlighted how skills-based hiring can help employers find potential talent that they would ordinarily overlook. This is because, when ignoring the credentials of candidates, employers tend to focus on attributes that are more evenly distributed than credentials are.
This presents a considerable market for employers, as there are an estimated 70 million people across the United States “skilled through alternative routes”. With labor markets tight, more and more employers are looking to skills-based hiring to find the talent they need. This is aptly illustrated by a recent report from the professional social network LinkedIn, which shows the growth in the practice across Europe.
Skills-based recruitment
The report suggests that EU companies that prioritize skills over traditional credentials such as degrees and job titles could significantly expand their talent pool. On average, adopting a skills-first hiring approach could result in a six-fold increase in the available talent for EU member states.
This shift not only opens up career opportunities for individuals without bachelor’s degrees, but also benefits women and Gen Z workers, thereby fostering a more diverse workforce.
The trend towards skills-based hiring is already gaining momentum, with nearly half of recruiters worldwide on LinkedIn utilizing skills data to identify potential candidates in the past year. This represents a notable increase of 12% compared to the previous year.
Skills-first
The latest data from LinkedIn reveals that transitioning to a skills-first approach to recruitment has the potential to amplify the talent pool for EU member states by a substantial margin.
This information is particularly relevant as countries grapple with labor shortages. Spain, Italy, and the Netherlands stand to experience remarkable double-digit (11x) increases in the number of available candidates for any given role, with France (10x), Germany (9x), and Belgium (7x) following suit.
The essence of skills-first hiring lies in evaluating candidates based on their skillsets, rather than solely relying on formal academic qualifications or previous job titles. By expanding the search criteria to include individuals with relevant skills, companies can unlock more opportunities for job seekers and gain access to a wider array of talent to select from, ultimately cultivating a workforce that is more diverse and inclusive.
“We’re still in the early days of the paradigm shift to skills-first, but the findings in this report suggest a skills-first labor market can benefit both employers and employees in the long run,” the authors explain. “Even amid today’s more uncertain economic conditions, businesses are realizing the competitive advantages of taking a skills-first approach to hiring.”
Making the change
The report emphasizes the pivotal role that policymakers, business leaders, and professionals can play in facilitating the transition towards a skills-based approach:
Policymakers have a distinct opportunity to foster improved engagement and collaboration with pertinent stakeholders, encompassing businesses, social partners, civil society, and education providers. By doing so, they can gain deeper insights into the demands of the labor market and formulate strategies to address existing gaps. A pivotal aspect involves the development and implementation of policies that prioritize skills, thus aligning the workforce with the evolving needs of industries.
Business leaders bear the responsibility of mapping out the requisite skills for various roles within their organizations. Utilizing this information, they should embrace practices that prioritize skills when hiring new employees. Furthermore, empowering existing employees to cultivate and enhance their skillsets within the workplace is crucial for long-term success.
Individual workers across Europe must proactively invest in their skill development in order to secure desired positions. This can be achieved by effectively showcasing their skills to potential employers, be it through optimizing their LinkedIn profiles or presenting their skills prominently in job applications.
By collectively embracing these key actions, policymakers, business leaders, and professionals can contribute to fostering an environment that values and prioritizes skills, ultimately propelling the transition towards a skills-focused paradigm in the labor market.
“As our economies undergo the twin digital and green transition, there is a need to rethink how we prepare the workforce for the jobs of the future, and how we match talent to opportunity more efficiently and equitably,” the authors conclude. “In this regard, the European Year of Skills 2023 provides a unique opportunity to highlight how taking a skills-first approach can help ensure that skills match the needs of the labor market and people’s aspirations.”
With this transformation not only occurring in low-paid parts of the economy, there is a real prospect of moving beyond the credentialism that has consigned many to the career slow lane and towards not only a more equitable and fair labor market, but also a more efficient one for employers too. It’s a change that’s long overdue.
