Companies focusing on credentials over skills may be left behind

November 13, 20205

Skills-first hiring should be treated as a companywide transformation rather than just an HR project, researchers said.

Employers may risk falling behind if they still prioritize the traditional credentials of job candidates over their capabilities and skills, according to a Nov. 6 report from The Conference Board and OneTen, a nonprofit organization focused on helping talent without four-year degrees.

As artificial intelligence tools continue to transform work and workforce skills change rapidly, employers need to take a skills-first approach that prioritizes candidates’ abilities, the report found. To do it successfully, though, this focus should be a companywide approach rather than “just an HR project,” researchers said.

“Roughly 62% of Americans lack a four-year degree. By focusing on skills rather than credentials, organizations can gain a competitive edge, all while opening the door to a far broader range of capable talent,” Allan Schweyer, principal researcher of human capital at The Conference Board, said in a statement.

Skills-first hiring is already transforming talent pipelines from recruitment to advancement, according to a Coursera report. By focusing on competencies, employers can more effectively find job-ready talent, reduce turnover and streamline career pathways, the report found.

In a recent roundtable, led by executives from The Conference Board and OneTen, HR leaders focused on embedding skills-first practices across their organizations. They noted the importance of securing visible CEO sponsorship and cross-functional alignment on skills-first goals and measures, as well as anchoring the approach in leadership, culture and governance as part of overall business and talent strategy — not as an HR program or a parallel initiative.

Starting small is also important, the roundtable found. Leaders can pilot one to three roles where hiring is slow or quality is low, first by mapping the roles to specific and measurable skills and outcomes and then rewriting job descriptions with those skills at the forefront. After demonstrating early wins, such as faster hiring and better onboarding, leaders can build momentum across the organization.

As part of the companywide approach, leaders can train managers to conduct skills-based interviews and coach workers based on defined capabilities. To further build momentum, executives can highlight quick wins and recognize managers who drive results, including measurements such as time to hire, quality of hire, early productivity, retention at 6-12 months, engagement and internal mobility.

Despite an increasing focus on skills-based hiring, few companies feel effective at skill validation, according to a report from Hirevue and Aptitude Research. Rather than relying on inferred skills from resumes, talent leaders can confirm competency through structured evaluations, simulations and assessments driven by AI tools, the report found.

In addition, hiring employees who show promise can help close skills gaps, according to a Gartner report. Talent management and learning and development leaders can work together to boost internal mobility when they don’t require workers to show proficiency in every skill before shifting them to new roles, the firm said.