• Xaana ARIMA

Is skills-based hiring the future?

When finding the right person, it’s important to find people with the right skills to get the work done. In such a tight labour market, it is more and more important to remember that it doesn’t necessarily matter how they acquired those skills.


We asked on a LinkedIn poll if employers should prioritise skills over education. An overwhelming 45% of people said yes, skillset matters way more with only 9% saying education, first and foremost. 24% said that they’re equally important and 21% think if the degree isn’t necessary employers should prioritise skills.

Should employers be prioritising skills over education?
Results of a Xaana Arima LinkedIn Poll

People obviously value demonstrated skills and, in many cases, more than educational degrees and certificates. But what are the actual benefits of skills-based hiring? Should we even consider it, and if so, what steps can we take to enable it?


Skills-based hiring creates increased retention and diversity


Research by LinkedIn in 2021 found that Australian non-graduates spend on average 51% more time with an organisation compared to graduates. Looking beyond qualifications and at a person’s proven abilities nurtures their loyalty and retention. Graduates can command a 11-30% wage premium despite no evident increase in productivity.


With diversity becoming a big focus, skills-based hiring helps broaden an organisation’s diversity. Looking beyond education can capture underrepresented and diverse backgrounds otherwise cut-off from the process. Regardless of their circumstances and reasons, these candidates can hold the ability to competently accomplish tasks and roles just as well, or in some cases better, than graduates.


At the end of the day, when organisations are finding the right person for a role, they should look at the people who can best get the work done. The people with the right skills and abilities - regardless of their educational backgrounds.


Skills shift


The benefits of not limiting employment to those who align with educational baselines is immense, especially when they’re not specifically required. But what skills should organisations look for?


Below are the top 15 increasingly important skills in Australia from the World Economic Forum Future of Jobs 2020.


1. Analytical thinking and innovation

2. Active learning and learning strategies

3. Critical and social influence

4. Technology use, monitoring, and control

5. Emotional intelligence

6. Complex problem-solving

7. Resilience, stress tolerance and flexibility

8. Creativity, originality, and initiative

9. Technology design and programming

10. Systems analysis and evaluation

11. Service orientation

12. Reasoning, problem-solving, and ideation

13. Quality control and safety awareness

14. Troubleshooting and user experience


Embrace the change?


The benefits of skills-based hiring are becoming increasingly acknowledged and accepted after an age of degree inflation. Paired with a skills shortage across various industries, especially in Australian technology, it makes more sense now than ever to start hiring regardless of education for many situations. You wouldn’t want to be operated on by a surgeon who didn’t make it to medical school. But for the right roles, it can effectively fill essential positions with higher retention and diversity, without suffering losses to productivity.

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