TestGorilla LogoTestGorilla Logo
Pricing

THE STATE OF SKILLS-BASED HIRING 2024

Skills-based hiring is the #1 way to recruit, with 81% of companies now using it.

Scroll down to read The State of Skills-Based Hiring 2024, which discusses who's doing it most, who's doing it best, and how candidates across countries, generations, and industries feel about the transformation.

Keen to dive deeper? Join our webinar on the 20th of June as Wouter Durville (TestGorilla co-founder and CEO) and Katrina Collier (Author of Reboot Hiring) discuss the report.

A woman traveling up an escalator which is part of a three dimensional number 1.

As featured in

The HR Director

01 Executive summary

We started our annual State of Skills-Based Hiring reports in 2022, when skills-based recruitment methods first emerged as an alternative to experience and education-based hiring. In 2024 it’s well and truly come into its own, and we’ve put together our most global and comprehensive report yet. Here are the key headlines:

01.1

01.1

Skills-based hiring is the #1 way to hire

81% of employers use skills-based hiring (up from 73% in 2023 and 56% in 2022). Adoption rates are highest in Australia and Latin America and lowest in France, and mid-sized companies use it most. 

A higher percentage of skills-based employers than ever are seeing improved diversity, retention, mis-hire rates, and cost-to-hire with this hiring strategy. 94% agree that skills-based hiring is more predictive of on-the-job success than resumes.

0 %

agree that skills-based hiring is more predictive of on-the-job success than resumes

smiling woman with hat on

0 %

of employers are using skills-based hiring in 2024

0 %

of employers were using skills-based hiring in 2023

0 %

of employers were using skills-based hiring in 2022

01.2

01.2

Outstanding benefits = time and money saved

US employers hiring for roles salaried at $60,000 are saving between $7,800 and $22,500 by reducing mis-hires with skills-based hiring. They’re also saving between 412 and 792 hours per senior management hire with skills-based hiring, and between 339 and 660 hours per hire for non-senior roles.

Employers see better benefits across all metrics when they do multi-measure testing, an approach that involves combining skills-based tests and assignments to measure multiple job-relevant skills. Assessment scientists recommend that this approach is most predictive of job success. [1]

$7,800 – $22,500 saved

by reducing mis-hires with skills-based hiring

412 - 792 hours saved

per senior management hire with skills-based hiring

339 – 660 hours saved

per hire for non-senior roles with skills-based hiring

“Employers see better benefits across all metrics when they do multi-measure testing, an approach that involves combining skills-based tests and assignments to measure multiple 
job-relevant skills.”

Skills-based hiring in tech

Tech employers are seeing better results than the industry-wide average. Read The State of Skills-Based Hiring in Tech to learn more.

01.3

01.3

Candidates want a skills-based hiring process

More employees than ever prefer a skills-based hiring process (68%, an increase of 21% from last year). Candidate preference for skills-based hiring is strongest in the US and Latin America, where over 80% of employees prefer skills-based hiring

Hiring bias is up by 48%, and 84% of employees agree that skills-based hiring can help prevent it. 90% feel as though they’re more likely to secure their dream job because of it, and 81% say it’s helped them gain access to new employment opportunities.

Candidate preference for skills-based hiring by country

Latin America

82%%

US

81%%

Australia

70%%

UK

69%%

Spain

68%%

France

64%%

Canada

57%%

Germany

56%%

90%

of candidates feel as though they're more likely to land their dream job with skills-based hiring

84%

agree that skills-based hiring can help prevent conscious and unconscious bias in the hiring process

81%

say that skills-based hiring has helped them gain access to new employment opportunities

Skills-based hiring in finance

80% of finance employees prefer a skills-based hiring process (12 percentage points higher than the industry-wide average). Read The State of Skills-Based Hiring in Finance to learn more.

Director roles human resources

01.4

01.4

Moving from what, who, and why to how

Overall, skills-based hiring dominates hiring practices in every locale and industry we surveyed this year, and a vast majority see impressive benefits. Still, employers increasingly face the same challenges, chief amongst which is how to adopt a skills-based hiring process at scale. As skills-based hiring matures, employers and skills-based hiring solutions providers need to work hard to overcome challenges together, especially in a job market that’s proving challenging for employers and candidates alike. 

This year’s report data shows that best practices are indeed emerging (using multi-measure testing, for example, and using skills-based screening tools before screening resumes), marking a turning point in the skills-based hiring conversation. Skills-based hiring is, bluntly, here to stay – 81% of employers are using some form of skills-based hiring in 2024, and 95% agree that it’s the dominant recruitment method of the future. We can stop talking about it being ‘on the rise,’ and instead should start talking about how to do it best.

0 %

of employers agree that skills-based hiring is the dominant recruitment trend of the future

confident woman with curly hair

02 A word from Wouter Durville, TestGorilla co-founder and CEO

02.1

02.1

Welcome to The State of Skills-Based Hiring 2024! I’m beyond excited to share this year’s findings with the world. Adoption rates for skills-based hiring are soaring, with 81% of organizations across the globe using it, and industries like marketing are leading the charge with 95% adoption.

The majority of candidates, especially the younger workforce, now prefer skills-based assessments, and 90% see it as a fairer way to showcase their abilities and secure their dream jobs. If this isn’t evidence that revolutionizing the way we hire has the power to change lives for the better, I don’t know what is. I feel more strongly than ever toward TestGorilla’s mission to place 1 billion people in dream jobs with skills-based hiring, and it’s energizing to be witnessing and tracking the skills-based movement’s reach and impact in real-time.

I also feel strongly that this year’s report represents a turning point in the skills-based hiring conversation. Skills-based hiring is now the #1 way to hire. The transformation isn’t on the horizon anymore. We’re not ‘on the brink’. We are inside the shift, and the new standard of hiring is all around us. Next, we need to begin to focus on and figure out how to do it really, really well.

This report is more than just statistics. It's the foundation of a roadmap for the future of skills-based hiring – which, one day, will just be synonymous with ‘hiring’. As leaders, innovators, and disruptors, we are not just participants in this change; we are its architects. We have our what and our why, and now it’s time to hone in on the how. To learn and build together, to embrace this change and harness skills-based processes to the max in order to unlock the full potential of our greatest asset: Our people, their potential, and their skills.

Skills-based hiring is now the #1 way to hire. The transformation isn’t on the horizon anymore. We’re not ‘on the brink’. We are inside the shift, and the new standard of hiring is all around us.

03 An outlook on hiring in 2024

Today’s hiring landscape is not an easy one to pin down. Persistent economic pressure, rapid technological advancements, and shifting workforce expectations have led to a flurry of challenges and a tight labor market characterized by low unemployment rates and fierce competition for skilled talent. 

This being said, opinions on and predictions for 2024 are mixed. Whilst the tight labor markets in the UK and the US are beginning to loosen up, with fewer UK employers struggling to fill vacancies and US unemployment rates slowly nudging lower [2,3], job seekers in both countries report that it’s hard to find work. [4] Meanwhile, Europe is facing a labor market imbalance. Some industries face widespread staff shortages, whilst others have a surplus of unemployed skilled professionals and too few jobs. [5] 

Although signals vary and uncertainty is rife among employers and job seekers, the data we’ve collected this year shows that a few key trends define the state of hiring in 2024 for the global West. Here’s the big picture.

03.1

03.1

It’s harder to find top talent than it was last year, but employers are satisfied with the hires they’re making

51% of employers are finding it harder to find top talent in 2024 than 2023 (30% say it’s easier, and 19% say there’s no change). This is unsurprising given the tight labor market, but 84% of them are satisfied with the hires they’ve made in the last 12 months. This is only slightly less than last year (87% of employers were satisfied with their hires in 2023). 

Satisfaction is high; skills-based hiring is becoming well-established, and employers now have a battery of tools available to them that they can use to measure and validate the skills that they’re looking for. However, the fact that it’s harder to find great talent in the first place speaks to a real need for a) talent discovery tools of the same caliber, and b) upskilling and reskilling initiatives that will generate the skills that employers are after. 

Our data also shows that retention is slightly higher overall than in 2023: 79% of employees plan to stay in their role for 3+ years in 2024, an increase of 6 percentage points from 2023. The rise of skills-based hiring, economic conditions that render job stability necessary, or the fact that 50% of employees say it’s harder to find a job in 2024 are a few likely reasons for this.

0%

say it's harder to find top talent in 2024

0%

say it's easier to find top talent in 2024

0%

say there's no change

03.2

03.2

Degree requirements aren’t going away yet

When hiring, 59% of employers say it’s more important for candidates to have degree requirements than it was five years ago, and the majority (70%) have not removed degree requirements.

Employer discourse around degree requirements has taken something of a U-turn recently: New research found that 47% of employers who remove them aren’t actually hiring more degree-less workers, and the majority of employers are not in favor of removing them. [6] 

With college fees getting more expensive and younger generations attending university at a lower rate than millennials, application rates are falling, degree programs are shutting down, and some institutions are struggling to get people through the door. This means employers need to think about what will happen to increasingly large cohorts of non-degree holders.

I have seen hiring managers push back on eliminating degree requirements because they don’t understand the alternatives for screening applicants. We need to teach hiring managers about good assessments and proper interviewing techniques.

Mark A. Smith, Ph.D., Author of “A Better Choice: The Manager’s Guide to Skills-First Hiring”

If HR teams and hiring managers don’t give these candidates a chance to demonstrate their skills, they’re in danger of becoming an untapped pool of talent – a risk that can’t be afforded in the tight labor market conditions we’re facing. Employers should think hard about why they’re holding on to them, and ensure they’re only doing so for roles where it’s really necessary.

03.3

03.3

Skills-based hiring is the dominant recruitment method

81% of employers are using some form of skills-based hiring in 2024 (up from 73% in 2023 and 56% in 2022), and 95% agree that it’s the dominant recruitment trend of the future. Skills-based hiring is well and truly here to stay.

It’s important to acknowledge that employers differ in how they do skills-based hiring: For example, 33% use skills-based assessments before screening resumes, and 67% use them after.  Additionally, only 30% of employers have removed degree requirements.

This highlights an important distinction that is often overlooked: Skills-based hiring and removing degree requirements are not synonymous. Skills-based hiring entails replacing (or adding to) traditional recruitment methods like degree requirements or resumes with a different indicator for candidates' skills. Such an indicator might be the results of a talent assessment or a work assignment, for example.

Year

2022

2023

2024

Percentage of employers using skills-based hiring

56%

73%

81%

33%

of employers use skills-based assessments before screening resumes

67%

of employers use skills-based assessments after screening resumes

30%

of employers have removed degree requirements from the hiring process

03.4

03.4

Candidates experience more hiring bias than last year

Today’s is a tough market for candidates to navigate. 31% of candidates report experiencing unconscious bias in the hiring process, an increase of 48% from last year. This is despite a 85% of companies reporting that diversity is an objective for them (85% of last year’s cohort also said it was a goal).

On top of that, 50% of the employees we surveyed told us that it’s harder to find a job in 2024 than it was last year (22% say it’s easier and 28% say it’s the same). Although caused by a combination of factors, increased hiring bias could certainly be at play. Many companies have a disconnect between their public stance on DE&I and their actual employee diversity, and “diversity washing” is on the rise.

0 %

of candidates say it's harder to find a job in 2024 than 2023

0 %

more candidates are experiencing hiring bias in 2024 than in 2023

About twenty years ago, I worked at a Fortune 10 company in the US. The company always advertised its diverse workforce, and there were classes and refreshers to promote diversity. However, it became clear that the company did not really practice diversity. Perhaps as a result, there was a toxic culture in the company. I quit after about two years.

Anonymous candidate

03.5

03.5

Gen Z enter the workforce en-masse

Over 17 million Gen Zers entered the workforce last year, and by the end of this year they’re are expected to make up more of the workforce than baby boomers. [7] A new generation in the workforce brings new challenges, and data shows employers are finding it hard to hire and retain Gen Z – a challenge they’ll need to overcome in the near future. 

Luckily, Gen Z have some clear preferences for how they like their hiring. Our data shows that GenZ are amongst skills-based hiring’s biggest advocates, a fact that’s unsurprising given that a) diversity is so important to this ‘radically inclusive’ generation of people, and b) they are, on average, more skeptical of higher education than other generations. [8][9] 82% of 25-34 year olds prefer a skills-based hiring process.

Smiling GenZ person

03.6

03.6

52% of employers are hiring for AI-related skills

An aggressive wave of AI has hit the world of work’s coastlines in recent years, and most employers have their surfboards out. They’re rising to the challenges that such rapid technological advances bring, and adding AI-related skills to job requirements is high on the list of things they’re doing. 

84% of employers are taking steps to help their workforce embrace the rise of AI. 64% are integrating AI tools into workflows, 55% have implemented upskilling initiatives for employees, and 52% are hiring for AI-related skills. Interest in AI skills is growing exponentially, and there are a huge range of new skills that need to be developed and hired for, rapidly. Employers need not worry: this is something that skills-based hiring solution providers have their eyes on. (Learn more about TestGorilla’s AI-related skills tests)

84%

of employers are taking steps to help their workforce embrace AI

64%

of employers are integrating AI tools into their workforce

55%

of employers have implemented AI upskilling initiatives

52%

of employers are hiring for AI-related skills

03.7

03.7

Soft! Skills! Matter!

89% of employers think it’s more important for candidates to have soft skills than it was five years ago. This is the third year in a row that our data has demonstrated an almost unanimous agreement that soft skills matter. 

It’s a pattern that we can’t ignore, and the case for measuring and accounting for soft skills as well as technical skills and cognitive abilities in the hiring process is as strong as ever. This, alongside the rise of AI and high demand for all sorts of new technical skills, underlines why multi-measure testing is the optimal way to approach skills-based hiring. Employers can’t afford to overlook soft skills in favor of hot-topic technical skills – and they don’t need to since there are straightforward ways of identifying both in one go.

% of employers who say it's more important to have soft skills

2022

81%

2023

91%

2024

89%

Since we're a training company, we're less concerned with applicants' technical skills being fully developed, as we plan to teach them from scratch anyway. We prioritize soft skills and personality, especially early in the hiring process. Assessments support our initial impressions and reveal any surprises we might not have discovered during the interview.

Adam Hartles, Technical Services Manager at Solid Solutions Management

04 Skills-based hiring adoption rates rising steadily, but the same challenges persist

04.1

04.1

81% of employers are using skills-based hiring

More employers than ever are using skills-based hiring. 81% of employers are using skills-based hiring in 2024, up from 73% last year and 57% in 2022. 59% of those employers started using skills-based hiring in the last two years.

This steady increase across three years includes the adoption of all forms of skills-based hiring – from cognitive ability and personality tests, to role-specific tests, combinations of different tests types (known as multi-measure testing) and skills-based work assignments.

Cognitive ability tests have seen the greatest increase in usage compared to last year, and 40% of employers told us they are using multi-measure testing (where multiple test types are combined in a holistic talent assessment that’s used for hiring).

What percentage of employers are using..?
32%
41%
49%

Cognitive ability tests

42%
50%
49%

Role-specific skills tests

33%
37%
38%

Work sample assignments

31%
46%
42%

Preference tests

32%
41%
49%

Cognitive ability tests

42%
50%
49%

Role-specific skills tests

33%
37%
38%

Work sample assignments

31%
46%
42%

Preference tests

Adoption rates 
by country

Latin America

94%

Australia

91%

US

87%

Spain

86%

Germany

85%

UK

84%

Canada

80%

France

67%

04.2

04.2

Marketing top industry for skills-based hiring adoption

Marketing, scientific and technical services, and construction are the industries using skills-based hiring the most in 2024.

Which industries are using skills-based hiring the most?
Marketing

95%

Scientific and technical services

89%

Construction

89%

0 %

of finance companies are using skills-based hiring.

0 %

of tech companies are using skills-based hiring.

The industries using skills-based hiring the least are hotel and foods services (54%), wholesale (56%), and government and public institutions (61%). Whilst adoption rates are low in the public sector when compared with other industries, federal agencies and 14 US states and counting have moved to skills-based hiring practices for public sector jobs – a notable step since federal hiring has historically relied on educational credentials and self-assessments to evaluate candidates’ abilities. [10]

04.3

04.3

In-person companies are finally buying in to skills-based hiring

Due to increased availability and quality of online skills-based testing tools, skills-based hiring has historically seen higher usage amongst hybrid and remote-only companies that operate entirely online. Last year, for example, we found that over 20% more hybrid organizations than in-person ones were using skills-based hiring. 

Slowly this is changing, and this year we’re seeing the greatest increase yet in skills-based hiring usage at in-person companies.

75%

of remote companies are using skills-based hiring

85%

of hybrid companies are using skills-based hiring

70%

of in-person companies are using skills-based hiring

Percentage using skills-based hiring
52%
64%
75%

Remote

62%
78%
85%

Hybrid

53%
57%
70%

In-person

52%
64%
75%

Remote

62%
78%
85%

Hybrid

53%
57%
70%

In-person

04.4

04.4

Mid-sized companies are doing skills-based hiring most

When it comes to company size, adoption rates are fairly consistent – at least 70% of all company sizes are using skills-based hiring. That said, companies with between 250 and 1000 employees are using skills-based hiring the most in 2024.

% of employers using skills-based hiring

26-50

72%

51-100

79%

101-250

70%

251-500

87%

501-1000

88%

1001-5000

86%

>5000

77%

04.5

04.5

Employers face more of the same challenges

Overall, more employers are facing multiple challenges when adopting skills-based hiring. Despite high adoption rates, skills-based hiring is still a relatively new approach to hiring, and anything new comes with its teething issues. 

Below is a breakdown of the challenges employers are encountering and the percentage of employers who are experiencing each challenge with annual comparisons.

Challenges when implementing skills-based hiring

2022

2023

2024

Lack of budget

62%

78%

26%

Concern about adding an additional stage to the hiring process

62%

78%

26%

Difficulty evaluating assessments from a large number of candidates

52%

64%

23%

Unsure about the quality and integrity of the tests and assessments

52%

64%

23%

Lack of software to implement

52%

64%

23%

Unsure which tests or assessments to use

53%

57%

8%

Lack of buy-in from internal stakeholders

53%

57%

8%

Other

62%

78%

26%

In 2024 the top 3 most common challenges faced by employers when implementing skills-based hiring are:

0 %

have difficulty evaluating assessments from a large number of candidates

0 %

are concerned about adding an extra step to the hiring process

0 %

are unsure about the quality and integrity of assessments

Effectively evaluating a high volume of applicants with skills-based hiring is consistently the most common challenge

41% listed this as a challenge in 2024, and it ranked as the biggest concern in 2022 and joint biggest in 2023, too. This is the top concern in all the locales that we surveyed apart from Germany, where ‘adding an extra step to the hiring process’ was top.

kind smiling man in black tee

For me, the biggest problem was assessing and comparing the quality of the candidates. When you have to hire twenty people in one process, it’s difficult to remember how each applicant scored on their tests by the time they get to the interview.

Jonathan Couverchel, VP of customer care at Click&Boat

05 A higher percentage of employers than ever are seeing benefits with skills-based hiring

Despite consistent challenges, those who adopt skills-based hiring continue to see impressive results: In 2024, higher percentages of employers reduced mishires and cost-to-hire and improved both diversity and retention than last year.

05.1

05.1

Improvements across key metrics in 2024

We asked employers to compare their hiring with skills-based hiring to times when they hired using more traditional hiring methods. Of those employers who are now using skills-based hiring practices:

  • 90% are seeing improved diversity, up from 85% last year

  • 91% are seeing improved retention, up from 89% last year

  • 81% have reduced time-to-hire, down from 82% last year

  • 78% have reduced cost-to-hire, up from 74% last year

  • 90% have reduced mis-hires, up from 88% last year

0 %

said skills-based tests let them see the potential of a candidate, rather than just 
the experience they have had so far

0 %

said it helps them verify applicants’ soft skills, 54% say it helps them verify hard skills, and 53% say it helps them verify cognitive abilities

0 %

said it helps them get to a smaller pool of qualified applicants quickly and reduce my time-to-hire

Experience the true power of skills-based hiring

The best way to fully experience the true power of skills-based hiring is to get TestGorilla and start making more informed hiring decisions today.

05.2

05.2

98% of employers agree that skills-based hiring is more effective than relying on resumes

To shed even more light on why so many employers are turning to skills-based hiring and how they perceive it compared to other hiring practices:

94%

agree that skills-based hiring is more predictive of on-the-job success than resumes (89% said so last year)

88%

agree that skills-based hires stay longer in the role (82% said so last year)

98%

agree that skills-based hiring is more effective for identifying talented candidates than resumes (92% said so last year)

05.3

05.3

Reducing mis-hires could save US companies thousands

The cost of a mis-hire is notoriously hard to calculate, but a recent SHRM study states that “employers will need to spend the equivalent of six to nine months of an employee’s salary in order to find and train their replacement. [11] That means an employee salaried at $60,000 will cost the company anywhere from $30,000 to $45,000 to hire and train a replacement.”

The largest proportion our respondents told us that, after implementing skills-based hiring, they reduced their mis-hires 'significantly' (a 26-50% improvement) This could mean US employers hiring for roles salaried at $60,000 will, on average, save between $7,800 and $22,500 by reducing mis-hires with skills-based hiring.

“Employers will need to spend the equivalent of six to nine months of an employee’s salary in order to find and train their replacement. That means replacing an employee salaried at $60,000 will cost the company anywhere from $30,000 to $45,000”

05.4

05.4

US employers are cutting cost-to-hire by up to $2,342 per role

The average cost-to-hire in the US, according to SHRM’s 2022 benchmarking report, averages at $4,683. [12]

Since the largest proportion of our employer respondents cut cost-to-hire by 26-50% by switching to skills-based hiring, this hiring strategy could save US employers, on average, $1,218 to $2,342 per role.

05.5

05.5

Employers in the US could save up to 792 hours per hire

According to SHRM’s 2022 talent access benchmarking research, time-to-hire in the US averages at 66 days for senior managers and 55 days for other roles. [13] The majority of employers we surveyed told us that they reduced their time-to-hire by 26-50% with skills-based hiring, which translates to:

412-792
34% Reduction in time-to-hire by using our platform

Hours saved per senior management hire

33-660
34% Reduction in time-to-hire by using our platform

Hours saved per hire for non-senior roles

412-792
34% Reduction in time-to-hire by using our platform

Hours saved per senior management hire

33-660
34% Reduction in time-to-hire by using our platform

Hours saved per hire for non-senior roles

06 Results differ according to how skills-based hiring is used

There are many different ways to implement skills-based hiring – at the top of the hiring funnel, for example, or further down it, after a round of resume screening. This year, we’ve gathered data that reveals how employers should use skills-based hiring in order to see the best possible results.

06.1

06.1

Employers who use skills-based hiring before screening resumes are happier with their hires

67% of the employers we surveyed this year told us that they’re using skills-based hiring tools after screening their applicants’ resumes and using them to shortlist. This is a comfortable majority, but our data shows that the 33% who use skills-based hiring first are happier with their hires.

87% of employers who use skills-based assessments before resumes are satisfied with their hires, versus 78% of those who use them after resume screening. That’s a 12% improvement in hiring satisfaction if you use skills-based hiring in the right place.

0 %

are satisfied with their hires when they use skills-based assessments BEFORE resumes

0 %

are satisfied with their hires when they use skills-based assessments AFTER resumes

06.2

06.2

Better results for the 40% of employers who make it multi-measure

Another way of using skills-based hiring that leads to better results across the board is the use of multi-measure testing. Only 40% of employers are using multi-measure testing in their hiring processes, but 92% of employers who use multi-measure testing are satisfied with their hires. This is compared to the 84% of employers who are satisfied on average.

Not only are employers who are using multi-measure testing more satisfied: A higher percentage of them see improvements in retention and diversity and a reduction in mis-hires, cost-to-hire, and time-to-hire.

This result supports a consensus amongst assessment scientists that testing for multiple job-relevant measures – cognitive ability, soft skills, and job-relevant technical skills, for example, rather than for job-relevant technical skills alone – is the best way to predict job success. [1]

Metric

% of employers who see improvements

% when using multi-measure testing

% change

Reduction in mis-hires

90%

91%

+1.1%

Reduction in cost-to-hire

78%

83%

+6.4%

Reduction in time-to-hire

81%

87%

+7.4%

Improved retention

91%

94%

+3.3%

Improved diversity

90%

94%

+4.4%

The purpose of using multi-measure is to get the most accurate picture of a candidate’s strengths and weaknesses, and to predict their job performance using those measures. It’s research backed: It’s empirically proven that it offers the most effective and reliable way of assessing a person’s capabilities for a specific job. So if you’re worried about making valid hiring decisions that lead to better job performance, I strongly recommend using multiple measures of assessment.

Kim Severinsen

Head of TestGorilla’s Science and Assessment Innovation CoE

07 A clear majority of candidates now prefer skills-based hiring – and 90% associate it with dream jobs

07.1

07.1

68% of candidates across the globe prefer skills-based hiring

68% of the employees we surveyed told us that they prefer a hiring process that includes skills-based assessments, an increase of 12% from last year’s survey cohort.

% of candidates who prefer skills-based hiring
2024

68%

2023

56%

2022

54%

Latin American and US employees are keenest on skills-based hiring

Although a majority of employees prefer skills-based hiring in all of the countries we surveyed, a breakdown demonstrates that candidate preference for skills-based hiring is stronger in certain locales – notably in the US and Latin America, where over 80% prefer skills-based hiring. Canadian and German candidate cohorts have the lowest percentage preference.

Of the Latin American employees we surveyed, 51% report experiencing unconscious bias – 20% higher than the global average – which explains why there’s a strong preference for skills-based hiring in this region. Additionally, 73% of Latin American employees say it’s harder to find a job in 2024 than it was in 2023 (23 percentage points higher than the global average).

Percentage of employees who prefer skills-based hiring by country

Latin America

82%

US

81%

Australia

70%

UK

69%

Spain

68%

France

64%

Canada

57%

Germany

56%

07.2

07.2

Candidates want a hiring process that lets them demonstrate their skills

We asked the employees who do prefer a hiring process that includes skills-based assessments why they feel this way. Three reasons stood out:

85%

of employees prefer skills-based hiring because it gives them a chance to demonstrate their skills

67%

of employees prefer skills-based hiring because they get a chance to see which skills they’ll be using on the job

45%

of employees prefer skills-based hiring because it reduces hiring bias

If you’re applying for a remote job, chances are you're competing against hundreds, if not thousands, of other candidates for one position. It’s very easy to go unnoticed. But with talent assessments, I know I have a chance to show that I’m a great fit for the role.

Joan Pelayo

Marketing Specialist

GenZ and millennials are skills-based hiring’s biggest advocates

Unsurprisingly, younger employees are more in favor of skills-based hiring: In fact, a significant majority (82%) of 25-34 year-olds prefer skills-based hiring.

% of employees who prefer skills-based hiring
Age 25-34

82%

Age 35-44

72%

Age 45-54

63%

Age 55+

49%

% of employees who have changed job or career in the last 12 months
Age 25-34

52%

Age 35-44

46%

Age 45-54

39%

Age 55+

34%

There are a few reasons why younger employees are more likely to prefer a skills-based hiring process:

1. Younger workers are more likely to switch job or career. Skills-based hiring is a favorable approach for career-switchers since it takes the emphasis away from qualifications and years of experience, acknowledging that relevant skills can come from alternative places.

2. GenZ cares more about diversity than other generations: In fact, 56% of them say they wouldn’t accept a job at a company without diverse leaders. Skills-based hiring appeals since it’s a more inclusive way to hire that improves diversity for 90% of the companies that use it. [14]

3. Fewer young adults are going to university. Undergraduate enrollment has been dropping in the US since the pandemic, and skills-based hiring represents a future where young people without degrees get a fair shot at landing their dream job. [15]

07.3

07.3

90% see skills-based hiring as a route to securing their dream job

As well as appreciating a chance to demonstrate their skills, exercise job-relevant skills, and avoid hiring bias, 90% of the employees in this year’s survey cohort feel as though they’re more likely to secure their dream job with skills-based hiring.

84%

of employees agree that skills-based hiring helps to reduce conscious and unconscious bias in the hiring process

85%

of employees agree that skills-based hiring helps them to better understand the requirements of a role

81%

say they have gained access to new employment opportunities because of skills-based hiring

07.4

07.4

Anxiety is the top reason for candidates who don’t like skills-based hiring

Of the 15% of candidates who prefer a hiring process that does not include skills-based assessments:

0 %

say it’s because skills-based assessments make them anxious

0 %

say it’s because they end up taking assessments that aren’t relevant

0 %

say it’s because they take up too much time

Anxiety stands out as the top reason for not liking skills-based assessments, speaking to the realities of test anxiety but also a need for employers to administer skills testing in a way that is transparent and approachable. With irrelevant assessments coming in second, employers should also focus on sending candidates job-relevant skills tests – an impetus that also correlates with better predictions of job success.

Empathy is key when utilizing skills-based hiring. Companies should create a transparent, low-pressure environment that empowers candidates to showcase their abilities without undue stress.

Nginda Nganga

Co-founder at ToffeeTribe

08 Skills-based hiring can help solve the diversity problem

To recap, 31% of employees are experiencing unconscious bias this year – a 10% increase from 2023. 85% of employers have diversity as an objective, but only 30% have removed degree requirements, and most think these qualifications are more important than they were five years ago. This paints a troubling picture of the diversity problem in 2024, and seems to confirm suspicions that companies are, explicitly or tacitly, pulling back on DE&I. [16]

Other sources have highlighted the rise of “diversity washing.” A recent working paper that analyzed over 5,000 public US companies, for example, concluded that any companies were all talk and no action, with a “significant disconnect” between their DEI commitments and actual employee diversity (the researchers labeled these companies “diversity washers.”) [17] If employers' stated objectives differ from their behavior when it comes to diversity, how can skills-based hiring help?

08.1

08.1

84% of candidates believe skills-based hiring can reduce hiring bias

To be clear, skills-based hiring is not a silver bullet for diversity and inclusion. Meaningful commitments to DE&I go beyond how you hire. However, 90% of employers who use skills-based hiring report improvements in diversity, with 34% reporting a significant positive impact (26-50%). What’s more, 84% of the employees we surveyed agree that skills-based hiring helps reduce conscious and unconscious bias in the hiring process.

I'm a staunch supporter of skill-based hiring. It ensures that candidates are evaluated based on their actual abilities and competencies rather than traditional metrics like education or experience, leading to more qualified and diverse teams.

Shalabh Jain

GMAT Expert, SJ Consultants

08.2

08.2

Improved workplace diversity by country

Employers in France and Spain are seeing the most improvements in diversity with skills-based hiring.

Percentage of employers who have improved workplace diversity using skills-based hiring

US

91%

UK

89%

Canada

90%

Australia

88%

Latin America

92%

Spain

97%

Germany

84%

France

94%

08.3

08.3

Companies that use skills-based hiring are doing more for diversity

92% of companies who use skills-based hiring have documented processes, training, and/or data collection in place to prevent unconscious bias from impacting their hiring decisions, compared to 70% of companies who don’t use skills-based hiring – an increase of 31%. This is a bigger gap than in previous years (14 percentage points in 2023 and 11 in 2022).

09 What to expect next

09.1

09.1

Candidates want to see more skills-based hiring

68% of employees want skills-based hiring usage to increase in the future. 25% want it to stay the same, and only 7% want to see it decrease.

The message is loud and clear: Candidates prefer skills-based hiring, recognize its benefits, and want to see more of it. This is crucial at a time when 50% of them are finding it harder to find work, and 31% of them are experiencing hiring bias.

0%

of employees want skills-based hiring usage to increase

0%

Want it to stay the same

0%

Want it to decrease

0%

0%

0%

09.2

09.2

Employers are set to invest even more in it

Luckily employers are aligned here: 60% of them expect their budget for skills-based hiring to increase in the next 12 months, and 35% say it will stay the same. This, on top of the fact that 94% of them agree that it’s the future of hiring, indicates that employer commitments to skills-based hiring will continue to strengthen and deepen.

09.3

09.3

But they need to do it differently if they want to see the best results

The future of skills-based hiring, then, is secure: It’s the dominant hiring practice in 2024 with an 81% majority of employers using it, the benefits are consistently significant for employers, and every year more and more candidates say that they prefer it. The next step is for employers to understand how it’s done best, so that hiring processes continue to adjust and evolve in a positive direction.

This year’s report found that using multi-measure testing and using skills-based hiring before screening resumes brings the best results for employers; but only 40% of them use multi-measure, and only 33% use skills-based hiring before screening resumes.

4 clear best practices for skills-based hiring from our data:

Measure for multiple job-related skills

(i.e. practice multi-measure testing). Employers who make it multi-measure see better results according to our data, and it has ben empirically proven that this is the best way to predict job success.

Screen resumes after testing for skills

This reduces the chances of hiring bias creeping in, and our data shows that employers who use resumes beforehand are less satisfied with their hires than those who use them after.

Automate assessment evaluation at the top of hiring funnel

This will help employers to overcome their most common challenge: evaluating a large number of skills-based assessments.

Be transparent about what your hiring process entails

Anxiety is the top reason for candidates who don’t like a skills-based hiring process, and transparency and communication is crucial to alleviating this.

09.4

09.4

… and require more education around how to overcome challenges

Employers are consistently running into the same challenges when implementing skills-based hiring – a point that emphasizes the need for continued research that incorporates candidate experiences and the expertise of skills-based hiring experts and can help companies evolve their approach effectively.

Using skills-based hiring to evaluate a large volume of candidates is consistently a problem for employers, with more of them than ever citing it as a concern this year. As skills-based hiring matures, equipping employers with the tools and education to overcome this is crucial. If employers aren’t confident in how to evaluate a large number of candidates with skills-based hiring, it won’t become the standard to use it at the top of the hiring funnel – which is ultimately where it’s best used.

The same goes for challenges within candidates’ experiences of skills-based hiring. Designing hiring processes that are transparent, job-relevant, and don’t exacerbate anxiety should be a focus for the year ahead.

10 Sources

  1. Sackett, P. R., Zhang, C., Berry, C. M., & Lievens, F. (2022). Revisiting meta-analytic estimates of validity in personnel selection: Addressing systematic overcorrection for restriction of range. Journal of Applied Psychology https://psycnet.apa.org/record/2022-17327-001 

  2. CIPD labor market outlook (Feb 2024) https://www.cipd.org/en/knowledge/reports/labour-market-outlook/

  3. Iarcurci, Greg (2024). The Strong U.S. Job Market is in a ‘Sweet Spot,’ Economists Say. CNBC https://www.cnbc.com/2024/04/05/the-strong-us-job-market-is-in-a-sweet-spot-economists-say.html

  4. Smith, Morgan (2024). Finding a Job is Getting Harder Even in a Strong Labor Market. CNBC https://www.cnbc.com/2024/02/16/finding-a-job-is-getting-harder-even-in-a-strong-labor-market-heres-why.html 

  5. Gauret, Fanny (2024). Rebalancing the Scales: Why is Europe’s Labour Market in Disarray? Euronews https://www.euronews.com/business/2024/02/07/balancing-the-labour-market-how-is-europe-doing 

  6. Sigelman, M., Fuller, J., Martin, A. (2024) Skills-Based Hiring: The Long Road from Pronouncements to Practice. Burning Glass Institute and Harvard Business School https://www.burningglassinstitute.org/research/skills-based-hiring-2024

  7. Contreras, Daniel Chang (2024). Gen Z Claps Back: How to Motivate and Keep this New Generation of Workers. Forbes https://www.forbes.com/sites/stand-together/2024/02/21/gen-z-claps-back-how-to-motivate-and-keep-this-new-generation-of-workers/

  8. Francis, T., and Hoefel, F. (2018) ‘True Gen’: Gen Z and its Implications for Companies. McKinsey & Company https://www.mckinsey.com/~/media/McKinsey/Industries/Consumer%20Packaged%20Goods/Our%20Insights/True%20Gen%20Generation%20Z%20and%20its%20implications%20for%20companies/Generation-Z-and-its-implication-for-companies.pdf 

  9. Erudera News (2023). Gen Zers Skeptical of College Education Value, 46% deem it not worth the cost. Erudera https://erudera.com/news/gen-zers-skeptical-of-college-education-value-46-deem-it-not-worth-the-cost/ 

  10. Datar, A., Davidson G., Kladney B. (2023) Skills-Based Hiring: Opening the Doors to a Stronger Government Workforce. Deloitte Insights https://www2.deloitte.com/uk/en/insights/industry/public-sector/skills-based-hiring-crucial-for-government-workforce-planning.html

  11. SHRM (2017). Essential Elements of Employee Retention. SHRM https://lrshrm.shrm.org/blog/2017/10/essential-elements-employee-retention

  12. Miller, Stephen (2022). SHRM HR benchmarking reports. SHRM News https://www.shrm.org/topics-tools/news/benefits-compensation/shrm-hr-benchmarking-reports-launch-free-member-exclusive-benefit 

  13. SHRM benchmarking tool https://www.shrm.org/topics-tools/research/shrm-benchmarking 

  14. Manpower Group (2023). The New Human Age: 2023 Workforce Trends Report https://www.manpowergroup.de/-/media/project/manpowergroup/manpowergroup/manpowergroup-germany/studien_pdf/mpg_2023_humanage_workforce_trends_interactive.pdf

  15. https://fortune.com/2023/03/09/american-skipping-college-huge-numbers-pandemic-turned-them-off-education/ 

  16. https://www.morningstar.com/news/marketwatch/2024030592/companies-are-pulling-back-on-dei-what-will-be-lost-in-the-process 

  17. https://www.ecgi.global/sites/default/files/working_papers/documents/diversitywashing_0.pdf

11 Methodology

For this year’s report, we surveyed 1,019 employers and 1,100 employees from the UK, US, Canada, Australia, Latin America, Spain, Germany, and France in March 2024. All data was collected through independent channels. 

11.1

11.1

Of the 1,100 employees we surveyed, 13% were from the US, 13% from the UK, 10% from Canada, and 9% from Australia, 18% were from France, 18% from Germany, 4% from Spain, and 15% from Latin America.

Of the 1,019 employers we surveyed, 22% were from the US, 13% from the UK, 9% from Canada, and 6% from Australia, 14% were from France, 17% from Germany, 4% from Spain, and 15% were from Latin America.

Their respective organizations ranged in size from from small and medium-sized enterprises to larger ones:

% of respondents for each company size

26-50

10%

51-100

10%

101-250

10%

251-500

20%

501-1000

10%

1001-5000

10%

>5000

30%

Our respondents represented a variety of industries. The largest percentage of respondents came from the finance & insurance industry (14%), tech (12%), education (9%), and healthcare & social (7%).

Take part in next year’s report

The data collected from employers and employees was analyzed and presented by TestGorilla in the third edition of our annual report tracking the growth and success of skills-based hiring. We’re grateful to all of our survey respondents and partners for permitting us to include their stories. If you’d like to join forces with us as a partner on the 2025 report, please get in touch via marketing@testgorilla.com.

12 About TestGorilla

TestGorilla is a talent discovery platform that is shaping the future of work through skills-based hiring. Our library of over 400 scientifically validated, skills-based tests offers a scalable way for companies to hire better, faster, and without bias. Meanwhile, candidates use TestGorilla to discover and showcase their skills and potential, ensuring all talent gets a shot at landing their dream job.

Our globally distributed team provides over 10,000 customers and millions of candidates with skills-based testing and talent discovery solutions. TestGorilla is ranked number 1 on G2 for talent assessment software, and has been recognised globally for its growth and impact – we’ve been named twice in Sifted's B2B SaaS Rising 100, and regularly top G2's list of fastest growing software.