How Skills-Based Hiring Can Transform Your Business

Lauren Lyman
55 minutes ago
3 min read

In 2025, there is no doubt that the workforce is changing. Human resources professionals are approaching hiring practices based on skills rather than education degrees. When crafting a job description, recruiters are prioritizing competencies and adaptability over credentials and titles.

What is the reason for this change? Due to innovations in technology and other advancements, 58% of the workforce needs new skills or to be reskilled in order to get their jobs done. In fact, the skill sets for positions have changed by at least 25% since 2015. By 2027, this number is expected to double.

Therefore, business models have to adjust and pivot to skill-based hiring. In this blog, we will go into the specifics of skill-based hiring and how it can benefit and transform your business.

What is Skills-Based Hiring?

Skills-based hiring is a recruitment approach where employers prioritize a candidate’s skills, competencies, and experience over formal education, degrees, or job titles. This method focuses on assessing a candidate’s ability to perform specific tasks and contribute effectively to the role, rather than relying solely on traditional qualifications.

Employers are closing the skills gap by focusing on candidates with experience in AI, digital roles, and data analytics. They are finding qualified talent who adapt, collaborate, and have multi-disciplinary skills. The work requirements have changed, and lifelong learning is now essential. As for degree-based hiring, those practices will continue with jobs that require a specific knowledge base and study, such as law, finance, medicine, and engineering.

Here are some key aspects of skill-based hiring:

Competency Over Credentials – Emphasis on practical skills, certifications, and hands-on experience instead of requiring specific degrees.
Skills Assessments – Use of tests, case studies, and real-world projects to evaluate a candidate’s abilities.
Micro-Credentials & Certifications – Employers value industry-specific courses, bootcamps, and online certifications (e.g., Coursera, Udemy, AWS certifications).
Job Descriptions Shift – Job postings focus on required skills rather than years of experience or educational background.
Greater Workforce Diversity – Reduces bias by allowing non-traditional candidates, career changers, and self-taught professionals to compete.

Benefits of Skills-Based Hiring

If your organization is having difficulty finding qualified employees, then skills-based hiring will open up a broader pool of candidates as well as create more alignment between the workers’ experience and the roles you’re needing to fill.

Here are some of the benefits of skills-based hiring:

Expands the talent pool by considering non-traditional candidates
Leads to better job-role alignment and improved employee performance
Encourages lifelong learning and continuous upskilling
Supports diversity, equity, and inclusion (DEI) initiatives

Furthermore, skills-based hiring shortens the amount of time and cost to hire, allowing you to retain employees and reduce the amount of mis-hires. According to a report by BCG, the cost-per-hire can drop by 25% if companies implement skills-based hiring.

Transform Your Business with Skills-Based Hiring

With a skills-based hiring strategy, your business can transform and improve overall performance for the long-term. Skills-based hiring is especially effective if your organization operates in a fast-changing industry or requires specialized skills for each role.

Here is an overview of a skills-based strategy that you could implement for your business:

Shift the mindset internally. Educate your leadership and hiring managers on the benefits of skills-based hiring.
Redefine your job descriptions. Focus on required skills and outcomes and not just degrees, titles, and years of experience.
Build a skills framework. Work with your hiring teams and build a list of required skills, preferred skills, and teachable skills.
Implement the skills-based assessments. Use platforms such as E Skill and Test Gorilla to help automate and filter the screening process for your candidates.
Revamp the screening process. Screen resumes based on skills keywords rather than job titles and degrees.
Source your talent differently. One of the best places to source is through LinkedIn.
Train your hiring teams. Make sure your hiring managers keep a scorecard during interviews, tying each question to a specific skill.
Track and improve. Measure and evaluate your process by tracking metrics, such as quality of hire and employee retention.