Candidates selected after thorough skill evaluations outperform other candidates on the job. Know why?
A recent World Economic Forum (WEF) report titled, Putting Skills First: A Framework for Action, attributes the shift to skills-based hiring to the rise of “jobs of tomorrow”. Many sectors are experiencing a demand-supply gap linked to skills caused by the evolving roles of modern workplaces. The WEF report says the world will see a talent shortage in green jobs, AI-based jobs, teaching, healthcare and logistics — these are the jobs of tomorrow. It says a skills-first hiring approach will democratise the job market and boost the talent pool for these jobs of tomorrow.
A McKinsey article titled Taking a skills-based approach to building the future workforce affirms this insight. It says most companies are moving beyond degrees and job titles to focus on skills to help build the future workforce. Both these reports mention one common point. Skill-based assessments broaden the talent pool to include people without access via the traditional approach. Such assessments also ensure a diverse and resilient workforce and aid internal mobility to help bridge talent gaps across the organisation.
Here is an unignorable insight into skills-based hiring from a recent HirePro report:
Candidates chosen after thorough skill evaluations (assessments) outperform other candidates on the job.
A snapshot of findings from the report:
Improvement in performance review scores for candidates chosen via assessments vs. traditional methods across industries:
- GCC – 64%
- Startups – 46%
- IT Services – 73%
- BPO (Support) – 87%
These statistics make a strong case for performance enhancement in people chosen through skills-based assessments. Let us decode a few contributing factors to this finding.
1. More accurate role fitment
Skill-based assessments are more accurate, realistic and eliminate wrong hires. The associated assessment insights help with expectation setting while onboarding. Additionally, picking people for specific skills that suit the role results in a better application of skills. It leads to better job satisfaction and improved performance.
2.Ensures a positive work environment
Happy workplaces promote happy employees! When skills become the selection criteria for everyone in a team, there is healthy competition and improved productivity. Also, the team will not have any misfits, disinterested employees, etc., who spoil the team environment.
According to the McKinsey article, “Hiring for skills is five times more predictive of job performance than hiring for education and more than two times more predictive than hiring for work experience.” It further says that employees without college degrees stay with their jobs 34 per cent longer than those with degrees. This retention aspect is an immense boost for organisations. In any team, when constant turnover happens, it can be demotivating and even prove contagious. Skill-based hiring creates a positive environment, aiding enhanced performance.
3. Diversity and innovation
In new-age hiring, organisations rely on tailored AI-powered assessments to implement skills-first hiring. They aid bias removal through data-driven, objective hiring decisions. This approach creates a diverse team where only competencies matter. Many studies have proved that diversity promotes innovation, leading to job satisfaction, increased productivity and profitability. It means happier people with better compensation and incentives, promoting performance.
4. True equal opportunities
Skill-based hiring creates a platform for everyone to perform to their full potential, as degrees and backgrounds do not matter. This approach helps create an equitable workplace where everyone gets respect for their work. Typically, employees treated with equal respect give their best to their job. It aids the creation of a merit-based workplace.
5. Better employee engagement
For people hired via skills-based assessment, the associated insights can help predict their performances. Also, the learning quotient is one of the parameters gauged. Understanding this aspect can help HR set a career growth path at the outset. It helps organisations align their L&D efforts more effectively. Employees work towards achieving their goals with a clear action plan.
A LinkedIn study found that 45 per cent of Indian employees left their jobs due to a lack of L&D opportunities. When finding good talent is tough, planned L&D can be a retention booster, encouraging employees to continue. Also, focused skill development enables seamless internal mobility and redeployment — the need of the hour to bridge talent gaps.
Skill-based evaluations enhance performance in many ways. They also promote equitable and inclusive practices. Overall, they lead to improved productivity and profitability. Clearly, skill-based assessments are the way forward for recruiters.
References:
- crossover.com
- upwork.com
- mckinsey.com
- pwc.com
- deloitte.com
- shrm.org
- peoplematters.in
- https://hirepro.in
