Your 10 Step Guide to Implementing Skills-Based Hiring in Tech Teams

During our most recent Transform Meetup, Digital Transformation community, the discussion started on GenAI but quickly pivoted to skills-based hiring. Two CIO’s at $1b+ companies and a Programme Director shared how when building tech teams they ditched job specifications and job titles to focus on skills hiring. Then two days later at an event run by Matt Alder, Recruiting Future Podcast as well as the infamous Chad and Cheese there was a great discussion with numerous Heads of Talent Acquisition at companies such as EY, Fanduel and Barclays around the hype of skills-based hiring. Those sessions inspired this guide.

As we know, hiring the right talent is more critical than ever. Traditional hiring methods, often reliant on CV’s and interviews, can sometimes overlook a candidate’s true capabilities. Skills-based hiring is a new(ish) approach that prioritises a candidate’s skills and competencies over formal qualifications or work history. This is something I have been passionate about since I was at Gartner and read all the research on this topic. This guide will walk you through the essentials of skills-based hiring and provide a step-by-step process for implementing it in your tech team.

What is Skills-Based Hiring?

Skills-based hiring is an approach that focuses on the specific skills and abilities needed for a job rather than traditional markers such as degrees, certifications, or past job titles. This method evaluates candidates based on their actual ability to perform tasks and solve problems relevant to the role. It’s a more inclusive and effective way to identify top talent, as it opens up opportunities for individuals from diverse backgrounds who may not have followed conventional career paths but possess the necessary skills.

5 Benefits of Skills-Based Hiring

1. Improved Job Performance: By hiring individuals who have demonstrated their capabilities, you ensure that your team members can hit the ground running and contribute effectively.
2. Diverse Talent Pool: This approach encourages applications from a wider range of candidates, promoting diversity and inclusion within your team.
3. Reduced Hiring Bias: Focusing on skills rather than backgrounds helps to mitigate unconscious biases that can influence hiring decisions.
4. Enhanced Retention: Employees who are hired based on their skills are likely to be more engaged and satisfied in their roles, leading to higher retention rates.
5. Increased speed of hiring: Breaking a job down into a task and outcomes then matching skills is quicker than traditional hiring, in some cases by 20+ days.

Step-by-Step Guide to Implementing Skills-Based Hiring in Your Tech Team

Step 1: Identify Key Skills

Start by identifying the critical skills required for the roles you are hiring for. These should be specific, measurable abilities directly related to job performance. For example, for a software developer role, key skills might include proficiency in certain programming languages, problem-solving abilities, and knowledge of development frameworks. The easiest way to do this is to implement a white-label Internal Talent Marketplace such as Gigged.AI or implement new modules from the likes of Workday and Eightfold. 

Step 2: Develop Skills Assessments

Create assessments that accurately evaluate these skills. These could be coding challenges, problem-solving tasks, or project-based assignments. Ensure these assessments are standardised to provide a fair comparison between candidates. The best way is based on competence and not just years of experience. Good internal talent marketplace should have this as a feature.

Step 3: SOW over the traditional Job Spec

Ditch your job descriptions for a Statement of Work. A SOW is used often to hire a consultant or a team of consultants but rarely for a full-time employee or even a contractor. A good SOW will have deliverables and outcomes. This is an eay way to then match the right skills. I wrote a free custom GPT that can help in the short term break a job description into a Statement of Work with deliverables and outcomes. This is super important to adopting skills-based hiring.

Step 4: Implement Screening Tools

Use screening tools and platforms that support skills-based assessments. Platforms like Codility, HackerRank, or your own in-house tools can help you administer and evaluate skills tests efficiently. 

Step 5: Train Your Hiring Team

Also super important. Ensure that everyone involved in the hiring process understands the principles of skills-based hiring. Provide training on how to evaluate skills assessments objectively and how to conduct interviews that probe deeper into a candidate’s abilities. Our advice is always to start with a small pilot of 3-5 hiring managers that are respected in the company.

Step 6: Conduct Structured Interviews

Use structured interviews to further assess the skills identified as critical for the role. Prepare a set of questions and scenarios that allow candidates to demonstrate their abilities in a practical context. Ensure that all candidates are asked the same questions to maintain consistency and fairness.

Step 7: Evaluate and Compare Candidates

Compare candidates based on their performance in the skills assessments and structured interviews. Use a scoring system to objectively evaluate how well each candidate meets the required skills.

Step 8: Make Data-Driven Decisions

Base your hiring decisions on the data collected from skills assessments and interviews. This approach minimises bias and ensures that you are selecting the best candidate based on their proven abilities.

Step 9: Provide Feedback

Offer constructive feedback to candidates who participated in the skills assessments. This not only helps them improve but also enhances your employer brand by showing that you value transparency and development.

Step 10: Continuous Improvement

Continuously review and refine your skills-based hiring process. Gather feedback from your hiring team and candidates to identify areas for improvement. Stay updated with industry best practices to ensure your process remains effective and competitive.

Bonus Tip: 

The best way to start skill-based hiring is to pilot the approach when hiring contractors and freelancers. Full-time hiring is emotive and involves various teams where contingent hiring is often quicker and can lend itself to skill-based hiring. When the behaviours have been piloted in contingent then the approach can be translated to full-time hiring.

Conclusion

Skills-based hiring is a powerful approach to building high-performing tech teams. By focusing on what candidates can do rather than where they come from, you can unlock a diverse talent pool and ensure that your team is equipped with the necessary skills to thrive in today’s dynamic tech environment. Implementing this approach requires a strategic shift in how you evaluate and select candidates, but the rewards in terms of job performance, diversity, and employee satisfaction are well worth the effort.

Embrace skills-based hiring today and position your tech team for success in the future.