Traditional hiring methods that focus on a candidate’s education, degrees, and certifications consume a great deal of both the recruiter’s and the candidate’s time, and still fail to adequately assess a prospect’s skills.
Job seekers spend hours tweaking resumes, catering cover letters to specific positions, and sitting through interviews, just to be ghosted down the line or ignored completely.
Recruiters spend their days sifting through these materials for each candidate without gathering any relevant information about what a candidate’s actual skills are.
Skills-based hiring, however, cuts right to the chase by skipping the resume and instead assessing and hiring for a candidate’s skills by using multi-measure assessments and structured interviews.
Skills-based hiring has a positive impact on hiring speed because it removes arbitrary barriers, keeping top talent interested and enabling employers to fill positions quickly, for the long term.
Table of contents
What’s slowing companies down?
Degrees, resumes, cover letters, unstructured interviews, outdated HR practices, selective DEI programs – all of these slow down the hiring process.
These unnecessary requirements eat away at an employer’s time and resources while providing little understanding, interpretation, or appreciation of a candidate’s skills. A resume, for example, might give you a window into a candidate’s experience, but it does not reveal much about what a candidate’s actual skills are.
Of course, hiring managers want skilled employees whether they use skills-based hiring or not. But relying too heavily on practices that are not proven to predict future job performance ends up costing valuable time for employers and candidates alike.
Employers’ dependence on degrees as catch-all indicators of a candidate’s skills is known as degree inflation. Degree inflation slows companies down in several ways.
- It ignores swathes of candidates who may have the desired skills but do not have degrees, resulting in more time spent searching for candidates who meet archaic degree requirements.
- It increases the risk of hiring a less qualified candidate based on bias. When employers shrink the talent pool to only those candidates who can afford college, they are excluding more diverse candidates that did not attend college but may be more qualified for the position.
- Hiring an unqualified candidate based on their degree can waste employers’ time finding, hiring, and training a replacement.
Skills-based hiring does not find degrees inherently useless; rather, it acknowledges that while degrees may contribute to candidate skills, they do not actually prove a candidate has those skills or can learn them.
In fact, half of all workers in the U.S. are learning on the job or on their own to develop skills and transition to higher-paying work without ever having received a degree.
Resumes and cover letters
Resumes and cover letters aren’t all they’re cracked up to be. While they can be helpful tools for candidates to organize their work experience and educational background, they don’t measure a candidate’s hard or soft skills, and they waste companies’ time.
If hiring managers spend their limited time screening hundreds of resumes and cover letters, they are not using that time to assess candidates’ actual ability to perform required tasks and demonstrate soft skills.
With that in mind, do candidates and recruiters even want cover letters?
According to a study by Glassdoor, 58% of 13,000 surveyed professionals said that cover letters are unnecessary.
When it came to recruiters, opinions were split. Some recruiters said it was worthwhile to take the time to read an applicant’s cover letter. Other recruiters said they despised the practice, labeling it obsolete.
According to Frank L. Schmidt, a psychology professor at the University of Iowa, resumes are actually the worst way to predict whether new hires will be successful. Relying on such a faulty skills metric slows companies down by forcing them to let go of new hires who may have looked good on paper, but did not possess the relevant skills.
It’s common for technical jobs in research, engineering, and finance to require anywhere from two to seven interviews for a single position. Companies may feel that they are being thorough, but they are actually wasting time and money when implementing unstructured interviews.
Unstructured interviews waste time because they are poor predictors of job performance.
Here are four reasons why:
- Predicting the future is quite difficult even when you have access to a lot of information about a candidate. But an interview only provides a tiny sample of interaction and reveals little about a candidate’s overall behavior.
- Interviewers can’t tell when candidates provide random answers to interview questions. In fact, research shows that most people lie in job interviews.
- Interviews favor extroverts when extroversion is not what most jobs require. So, interviewers inadvertently reward behavior that may not reflect what is required for the actual job.
- Research shows that these interviews are prone to confirmation bias. Most interviewers form an opinion about a candidate within the first ten seconds and spend the rest of the interview trying to confirm that initial opinion.
In a 1998 meta-analysis by John Hunter, an American psychology professor, unstructured interviews were ranked as some of the worst assessments, predicting only 14 percent of an employee’s job performance.
If the goal of the interview is to “see if we like them,” skills are already thrown out the window, which is not a good way to hire qualified candidates quickly.
Diversity and inclusion hiring is crucial to developing a business or brand that is ethical, flexible, and financially successful. But how you implement diversity in your hiring practice could be slowing you down.
DEI programs can backfire and end up diminishing the talent pool if their understanding of diversity is too limited.
DEI programs that only focus on specific gender and racial diversity and ignore other categories like gender nonconformity, class, faith, upbringing, and physical/cognitive ability, are actually shrinking the talent pool and making it harder to find a qualified candidate.
A candidate that identifies as a transgender man, for example, may have more relevant skills than a candidate that identifies as a cisgender woman. A diversity program that is targeted at one specific demographic goal (i.e., hiring more women) can become reductive, ignoring the role that intersectionality can play in the hiring process.
As it relates to hiring speed, the majority of the hiring manager’s time ends up being spent searching for a single candidate type who may or may not have the relevant skills, while other diverse, skilled candidates are excluded from consideration.
Diversity without inclusion is also ineffective and time-consuming. Introducing qualified, diverse candidates into an environment where they do not feel included is not an effective way to retain employees. On the other hand, if employees are nurtured, respected and properly motivated in an inclusive environment, there are lower turnover rates.
Retaining employees eliminates the need to go out and hire more employees, giving HR more time to focus on other tasks while saving companies money.
Inefficient HR processes
Inefficient HR practices, such as not having hiring software that centralizes all of your candidate information and documents, poor communication, and only placing job posts in a single place, can all have negative impacts on hiring speed.
These inefficiencies can result in recruiters ghosting qualified candidates, which slows hiring and can damage a company’s brand.
But according to Devon Lall-Perry, a former recruiter, recruiters who ghost are likely dealing with issues that have nothing to do with the candidate:
- Recruiters may not have a true applicant tracking system in place, preventing them from keeping track of candidate conversations and stages
- Recruiters may be uninformed about the ins and outs of a particular position and are unable to provide candidates with all of the necessary information
- The company may have over-hired and implemented a hiring freeze without properly informing the recruiter
All of these factors indicate poor communication between the people involved in the hiring process, which contributes to a slower hiring process.
5 ways skills-based hiring speeds up the hiring process
Hiring faster has become even more critical to employers during the Covid-19 pandemic.
In some instances, companies like Home Depot have sent job offers out only 24 hours after candidates apply.
Other employers have dropped their degree requirements, background checks, and experience requirements altogether. But this isn’t necessarily a good thing.
Increasing hiring speed shouldn’t mean filling open positions with anyone that is available. Ideally, increasing hiring speed should match speed with precision.
Skills-based hiring is understood as any hiring practice or practices that assess a candidate’s hard and soft skills through efficient tasks, metrics, and/or tests.
Our own data at TestGorilla shows that 91.4% of organizations saw a reduction in time-to-hire when using skills-based hiring. Let’s take a look at some benefits of skills-based hiring that impact hiring speed.
1. Widens the funnel
Hiring for skills instead of degrees saves on recruitment costs by cutting the time it takes to assess a candidate’s skill set. Even companies like IBM, Accenture, and Dell have all reduced their educational requirements for certain positions in favor of experience and skill requirements.
By widening the funnel to include candidates who do not have degrees or are otherwise inexperienced on paper, hiring managers can focus on testing candidates for relevant skills and the potential to learn new skills once hired.
Widening the funnel with skills-based hiring leads to a more accurate hire, saving you valuable time and resources that could have been wasted hiring the wrong person.
It ensures employers hire candidates that have the skills needed to perform the job well. It also relieves recruiters of the grueling task of seeking ways to limit the talent pool based on arbitrary requirements.
Take Laura, for example. Laura is the head of customer success at TestGorilla. Having worked in recruitment, Laura had hands-on experience with the vices of resume-based hiring. She recalls having to shrink the hiring funnel at her old job by nit-picking things like resume formatting or files not being uploaded properly.
When Laura herself made a shift into the startup world, she encountered skills assessments that changed the hiring game for her. She admits that with only a resume she would have had no chance of landing a position at the startup.
But because the employer chose to test Laura for skills rather than how glitzy her resume looked, she was able to fill the position quickly while building her employer’s confidence in her abilities.
2. Talent springs to the top
With a skills-based hiring approach, employers can begin the recruitment process with a skills assessment or scalable screening rounds where tests happen simultaneously without requiring HR’s attention. Every candidate gets the same assessment and the grading process should take the same amount of time for each candidate.
The candidates with the most talent naturally spring to the top – no need to get bogged down in meandering cover letters or interview quagmires. There is also a reduced need for references because your SBH recruitment process proves whether a candidate is up to the job.
The benefit for hiring managers is twofold: They get to do their jobs more efficiently and they get to spend more time engaging with talented candidates.
Having a diverse pool of qualified job candidates is a competitive advantage in attracting younger, sought-after talent. Instead of solely fishing for new candidates with skills-based job postings, companies can utilize talent pipeline programs for skills-approved candidates that can join the workforce in the future.
3. Post-hire benefits
Widening the funnel to include candidates with diverse backgrounds, transferable skills and the ability to learn new skills leads to benefits even after the candidate is hired. But widening the funnel to secure talent is only the first step.
Companies must facilitate a new hire’s individual growth and learning so that they feel supported, stimulated, and invested in, which decreases the likelihood of voluntary employee turnover.
If new hires stay and grow with the company, they are less likely to need to be replaced, freeing up recruitment efforts and saving time. Skills-based hiring also improves efficiency by more quickly upskilling workers to address evolving workforce needs, instead of hiring new employees.
In an article examining the relationship between higher education and skills-based hiring by Sarah DeMark and Joann Kozyrev, the researchers argue that employers utilizing skills-based hiring could more swiftly upskill workers to fulfill changing organizational needs in the workforce.
By emphasizing reskilling and upskilling from hiring, employers can evaluate where employees’ skills may be easily transferred into more valuable fields that are growing but are experiencing talent shortages.
As a case in point, in 2016 it was estimated that about 250,000 workers globally were laid off from the oil and gas industry due to oil price changes. Luckily, due to the increasing interest in sustainable energy products, many new positions in renewables opened up.
Recently laid-off oil and gas operators were quickly hired for their transferable skills, like their foundational knowledge in STEM fields, as well as their potential to be upskilled.
The post-hire benefits of skills-based hiring can transcend individual companies, and even industries, to quickly locate available, transferable talent.
4. Fewer mis-hires
According to a 2017 CareerBuilder Survey, 74% of employers say they hired the wrong person for a job. Not so surprisingly, picking an unqualified candidate for the job can cost employers significant time and money.
Mis-hiring also means employers are wasting time onboarding, training, and managing the poor performance of unfit employees, on top of all of the time already spent reviewing their resumes, cover letters, and interviewing them.
In our State of Skills-Based Hiring Report for 2022, 92.7% of companies reported reductions in mis-hires when using a skills-based hiring approach. Skills-based assessments can reduce mis-hiring and speed up the hiring process by:
- Eliminating the guesswork that comes from processing resumes and focusing on university names or past career titles. With skills tests, candidates who may have leaned on their history instead of their abilities can be easily identified and removed from consideration.
- Avoiding recruitment bias and the potential for mis-hiring unskilled candidates. Skills-based assessments focus on the candidate’s skills instead of physical, cultural, or financial factors that are prone to bias.
- Comparing candidate scores to benchmarks set by current employees to make sure that new hires can keep up with the quality of work that is being done by their peers. Skills tests can quickly predict whether or not a candidate can keep up with the rest of the team.
- Identifying where a candidate may fall short in one role, but may have the skills to succeed in another. Skills-based hiring can help you hire the right candidates for the right positions.
5. Reduced candidate ghosting
Candidates who ghost companies can cause major disruptions across an organization, according to Sarah Smart, Vice President of Global Recruitment at Hilton in McLean, VA.
A business head might think that they’re ready to launch a project, HR may have closed the position prematurely, driving away other candidates, or a recruiter might think that their work is done but has to start all over again. Any one of these hiccups can cause major delays in the hiring process, let alone all of them at once.
Also, not enough HR teams advertise open positions with a defined compensation range or an explanation of what the day-to-day responsibilities of the role are. This causes many candidates to jump ship once they get all of the relevant information further into a broken hiring process.
Skills-based hiring reduces candidate ghosting by:
- Shortening the hiring process to keep hiring on track, instead of stringing candidates along until they decide to ghost.
- Improving the candidate’s experience by giving them the opportunity to demonstrate their skills through assessments or paid trials. Our State of Skills Based Hiring report shows that employees actually prefer skills-based hiring to traditional hiring methods because they feel more engaged in the process.
- Empowering recruiters and hiring managers to provide candidates with feedback as soon as possible so the process can move forward efficiently and candidates are aware of how they are performing.
- Communicating to candidates that the company values culture add over culture fit. There is a common misconception that having a strong company culture means hiring people that all think and feel the same way. In fact, this strategy, known as “culture fit,” often leads to groupthink, lack of innovation, and bias.
This last point is important to emphasize because if candidates do not feel they fit in the existing company culture, they will be less engaged and less productive, which is estimated to be a $7.8 trillion global workplace problem.
They will also look for a better fit elsewhere. More turnover also means more time spent trying to fill openings, which means more money wasted.
Culture add is more than just hiring who you would like to have a beer with. Culture add is ensuring that your workplace accommodates candidates from all walks of life to foster ingenuity, learning, and a desire to grow careers without leaving the company.
Hire better and faster with skills-based hiring
Skills-based hiring positively impacts hiring speeds by reducing the time it takes to determine whether a candidate is right for a position while keeping candidates informed and engaged throughout the hiring process.
Companies that move on from degree inflation, resumes, cover letters, and unstructured interviews to embrace skills-based hiring strategies, like skills assessments, trials, and behavioral interviews, experience significant reductions in time-to-hire and turnover rates.
Updating HR processes, improving internal and candidate communication, and focusing on skills are great ways to reduce candidate ghosting and hire the right candidates faster.
Ready to get started on a better hiring process? Try our Culture Add test to hone in on top talent.
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