The Paper Ceiling and Skills-based Hiring
As labor challenges continue throughout the year, more employers are exploring skills-based hiring to help them compete for job candidates and expand talent pools. While specific qualifications may be valuable for some roles (e.g., knowledge roles requiring degrees and licensure) or industries (e.g., health care and education), HR professionals and senior leaders may benefit from considering candidates based on desired skills rather than experience or education.
While many Americans have heard of the “glass ceiling” that prevents opportunity, some people and groups are questioning the “paper ceiling”: The invisible barrier for skilled job seekers who lack a bachelor’s degree. According to the advocacy group Opportunity@Work, 70% of new jobs insist on a bachelor’s degree, but fewer than 50% of potential applicants hold one. Employers can find workers with the skills they need while removing the red tape of requirements. That’s because not all of these skills need to be learned. In the current worker-friendly market, many employers are having luck with taking a chance on candidates eager for a challenge and willing to learn on the job.
This article explores the paper ceiling and the benefits for employers of considering skills-based hiring.
Tearing the Paper Ceiling
Skills-based hiring isn’t just an aspirational idea; some employers and job posting channels are taking note and prioritizing finding the right fit for open positions based on skills rather than education or experience. For example, the employment website Indeed recently launched a skills-based hiring tool called Skill Connect. According to Indeed, this product helps job seekers find positions based on their skills and training rather than their credentials.
Similarly, a coalition of roughly 50 organizations launched a “Tear the Paper Ceiling” campaign to raise awareness about the more than 70 million workers in the United States who are “skilled through alternative routes,” otherwise known as STARS. In the workforce, STARS are those who are age 25 and older and without a bachelor’s degree; instead, they have completed an associate degree, community college courses, on-the-job training, certificate programs or military service. The argument is that many American workers have developed valuable skills through various avenues, so the movement hopes to challenge misconceptions about skills and preparedness and encourage upward mobility for millions more workers.
Additionally, higher education was significantly impacted by the COVID-19 pandemic. Enrollments dropped at a historic pace, and workplace changes have rendered college degrees unnecessary for a growing number of high-paying jobs. However, many employers still require four-year credentials, a criterion that is being perceived more often as an outdated employment habit.
Some large employers, including IBM, Dell, Bank of America, Google and Delta Airlines, have dropped degree requirements to widen their talent net and diversify the workforce. The fact is that there simply aren’t enough college graduates for open entry-level positions requiring a degree, so employers are considering alternative methods. Fortunately, a skills-based hiring strategy can give them a competitive edge in talent wars.
Making the Case for Skills-based Hiring
Skills-based hiring is gaining popularity as many employers struggle to find qualified candidates for open positions. This hiring practice can provide employers with the following advantages over traditional recruiting methods:
Expanded talent pool—Skills-based hiring can give employers access to a wider talent pool. Employers can find workers with skill sets that better fit their open positions by no longer focusing on candidates with four-year college degrees or a particular amount of work experience. Expanding the pool of candidates increases employers’ likelihood of finding successful candidates.
Improved workplace diversity—Because employers using skills-based hiring often receive more job applicants from a larger pool of candidates, their workforce may be more diverse. For example, organizations could consider more candidates based on their skills instead of whether they meet formal hiring markers, such as a four-year college degree. The resulting larger talent pool can allow employers to attract a more diverse workforce, with prospective employees from different backgrounds and with a wide range of skill sets.
Boosted employee engagement and retention—The lack of growth opportunities at work is often cited as a reason employees leave their jobs. So, when companies offer their employees chances to showcase and apply their skills, it can lead to employee career progression and engagement. With an increased focus on skills in the workplace, employees are more likely to stick around when they are happy and engaged.
Saved time and money—Shifting to skills-based hiring can help employers reduce the time and resources spent on recruiting, onboarding and training employees. By hiring employees with the skills and competencies to perform the job rather than focusing merely on an educational requirement, organizations can spend less time and money onboarding and training new hires.
Decreased hiring time—Since the primary focus of skills-based hiring is evaluating candidates’ skills, employers can determine whether candidates have the skills to match the position early in the interview process. Evaluating candidates based on their skills also can lead to candidates determining whether their skills match the position. This can help increase the chances of individuals opting out of the interview process sooner if they feel their skills don’t match.
Ultimately, skills-based hiring can help increase the likelihood of finding the most qualified person for a job while spending fewer resources and time.
Summary
More employers have found that skills-based hiring can benefit their workplace by incorporating qualified workers with a range of skills from different backgrounds into their teams. While many hiring processes factor in college degrees and other credentials for legitimate reasons, more of today’s employers are considering skills-based hiring and updating their hiring and recruiting practices to help them find the best possible talent.
This HR Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. © 2023 Zywave, Inc. All rights reserved.