More than one-third of organizations now regularly use skills-first hiring strategies that prioritize demonstrated abilities over traditional education credentials, according to new research released this week by SHRM Foundation.
The report, titled The Skills-First Movement: Redefining How Organizations Hire and Grow, found that 34 per cent of organizations reported often or almost always using skills-first strategies in their hiring processes. Among organizations that rarely or never use these approaches, 55 per cent expressed interest in adopting them.
The research builds on data collected in 2021 and examines how skills-first talent management has evolved from an emerging trend to a more widely adopted practice. The approach focuses on evaluating candidates based on their competencies regardless of where those skills were acquired.
Experience and demonstrated skills now outrank degrees
Human resource professionals and supervisors now rank relevant work experience and demonstrated skills as the primary factors in hiring decisions, surpassing educational background, according to the findings.
“As organizations navigate an increasingly dynamic labor market, we are witnessing a fundamental transformation in how talent is identified and nurtured,” said Wendi Safstrom, president of SHRM Foundation.
The research indicates that about two-thirds of HR professionals using skills-first strategies receive a higher number of qualified applicants for open roles.
Artificial intelligence reshaping skills requirements
More than 80 per cent of HR professionals, HR executives, supervisors and workers agreed that artificial intelligence will change which skills are valued in the workplace.
Additionally, 80 per cent of HR professionals said they expect companies to prioritize hiring workers with AI-related competencies in the next three years.
Upskilling linked to higher engagement and satisfaction
Workers whose organizations promote upskilling opportunities throughout the year reported significantly higher levels of workplace engagement compared to those at organizations without such programs, according to the research.
Among workers at organizations that promote upskilling, 59 per cent said they feel engaged at work, compared to 31 per cent of workers at organizations that do not promote such opportunities. Job satisfaction also measured higher among the upskilling group at 59 per cent versus 37 per cent.
Workers at organizations promoting upskilling also reported feeling more committed to their employers, with 61 per cent expressing commitment compared to 47 per cent of workers without access to upskilling programs.
Barriers remain for some organizations
Some organizations face obstacles to adopting skills-first strategies, including a lack of tools to support effective skills assessment and pressure to hire quickly, according to the report.
The research was funded by Walmart and conducted by SHRM Foundation, the nonprofit arm of SHRM, a professional society with nearly 340,000 members in 180 countries.
