Despite rising inflation and talk of a recession, there remains considerable demand for tech workers. The Great Resignation is impacting the world of tech hiring, as a growing number of tech staff are trading in their current jobs for better opportunities – creating a persistent turnover crisis.
According to a Gartner survey, only 29% of IT staff globally ‘highly intend’ to remain in their current roles. And when categorized by age bracket, the survey revealed that in the 19 to 29-year-old segment of global IT workers, only 16% plan to stay.
Amid this constant turnover, the need for specialized tech talent has surged. How can companies attract the talent they need? Here’s one idea: look at non-traditional sources of talent. Companies are now prioritizing skills over diplomas, thereby uncovering new sources of tech employees by shifting to a skill-based hiring model.
Skill-Based Hiring: A Rising Trend
Nearly 60% of tech companies are now considering removing college degree requirements to fill critical tech roles. Specifically, organizations are taking a more holistic approach: they have stopped limiting the assessment of applicants to academic backgrounds and are considering candidates’ overall skills and achievements.
For example, in mid-2001, LinkedIn launched Skills Path. This was a hiring program that promotes the use of a company’s learning courses and assessments to help recruiters find the perfect candidates for their available roles. Tech companies like Citrix, Gusto, and TaskRabbit joined the program, signifying their interest in the skill-based approach to hiring.
Harvard Business Review noted that several tech giants are also embracing this tech hiring trend. During the latter part of 2021, only 43% of Accenture’s IT job postings and 29% of IBM’s required a degree. Apple and Google followed suit, as over 20% of their combined job postings did not require a college degree. Microsoft and Facebook previously made similar pronouncements, though the actual implementation of such has yet to be seen.
Government Supports Skills-Based Tech Hiring
Why is this shift happening, and why now? Only one-third of the US adult population has finished college. This makes conventional, degree-based tech hiring self-limiting.
The US government has recognized this, prompting the White House to issue a memorandum to limit the use of educational requirements in hiring candidates for federal service contracts. The directive also stressed using a competency-based approach to qualifying and employing candidates.
Tech hiring based on skills helps young workers and recent graduates break into the tech industry and allows experienced workers to shift careers to tech. This is because competency-based hiring reduces age-related bias in recruitment.
Even veteran tech employees recognize that skill is the new metric in the tech labor market. For example, in 2021, LinkedIn members added a total of 286 million skills to their profiles, an increase of 22% from 2020. Recent LinkedIn data also reveals a significant volume of skill set changes over the years – a 25% increase since 2015. This figure is projected to double by 2027, as skills are expected to continue to be the basis for employment.
The Benefits of Skills-Based Tech Hiring
Both the government and private firms are shifting to hiring tech employees based on their skills for several reasons:
Access to diverse talent pools.
Nearly 30% of companies implementing a skills-based hiring approach enjoy access to more diverse talent pools because applicants without a college degree now have more opportunities to showcase their skills. This talent-based approach provides opportunities to those not typically considered for specific roles in the past. This also brings increased opportunity even for historically underrepresented workforce segments as recruiters begin to consider their skills amid the absence of college degrees.
Improved screening of the right talent.
On average, recruiters spend 6 seconds looking at a resume. A skills-based assessment allows tech recruiters to go beyond resumes. They see applicants in action and discover if they have the skills required for the roles to which they’re applying. By testing candidates’ tech skills, recruitment teams effectively filter many unqualified applicants and bring only the most viable and qualified to the interview process.
Faster and more cost-effective hiring.
Hiring tech employees based on their skills reduces time-to-hire by 50%. Thorough evaluation of candidates’ tech competencies at the initial stages saves companies 87% of their recruitment costs.
Moreover, 70% of candidates who pass competency assessment tests get hired. This is because skill-based assessments ensure that new hires have the prerequisite skills for the job they applied for. They show whether candidates are fully acquainted with the necessary technology, tools, and framework.
As a result, these candidates require less time for onboarding and training. Faster time to deployment translates to improved business agility, which means faster time to value for the company.
Skill-Based Tech Hiring: The Way Forward
The modern workplace has evolved, especially in tech. We are now in a talent market where a candidate’s potential pulls more weight than their credentials. Digital transformation, emerging technologies, and shifting workplace expectations have driven the demand for top-quality tech talent. Organizations need to innovate their hiring strategies to attract and onboard employees to fill crucial roles.
Companies that can quickly adapt to the talent market demands and utilize skill-based hiring will gain a competitive edge while diversifying their workforce. This method of recruiting has helped many businesses balance their workforce needs, expand their candidate pools, and make swift hiring decisions.
For employers that are struggling in this area, start by assessing job descriptions for skills necessary for the role and then work to build a system that focuses on these to bring in the most qualified candidates possible. Skill-based hiring is the way forward, so we must make sure we equip ourselves with the knowledge needed to properly employ this approach.