Beyond resumes: Advancing economic mobility through skills-based hiring

The workforce is evolving, fueled by an intensely competitive job market where companies can struggle to find qualified candidates for key roles. Amid this employment crisis, employers are increasingly embracing skills-based hiring and the 70 million U.S. workers, dubbed STARs (skilled through alternative routes) or hidden workers, who are often overlooked by hiring managers.

Skills-based hiring prioritizes competence over credentials, providing opportunities for economic mobility to workers without degrees. The approach, centered on innovation and adaptability, evaluates candidates based on specific examples of their skills rather than solely on their educational backgrounds. 

Initiatives like SkillsFWD, a funder collaborative created in 2023, are driving this nationwide shift toward equitable hiring practices. 

Our recent webinar, featuring Digital Promise and SkillsFWD grantee Accelerate Montana (AMT), highlighted the benefits of leveraging user engagement to foster equity in technology development and skills-based hiring. The insightful discussion emphasized the importance of refining a skills-based ecosystem to recognize all workers' true value, diverse skills, and experiences. Skills-based hiring that prioritizes diverse user needs right from the start ensures products are inclusive and that the supporting technology truly serves its purpose.

Businesses would do well to acknowledge the value and ROI of skills-based hiring and its tangible benefits. These include reduced time to fill talent shortages for high-demand roles, reduced time to proficiency, increased retention, and diversity. This shift may also offer companies positive brand recognition, workforce agility, and future competitiveness — a win-win for employers and job seekers.

Implementing skills-based hiring offers numerous benefits for employers. It helps identify employee skills and competency gaps — which supports workforce planning, training development, upskilling, and alignment with high-demand career paths. Additionally, skills-based hiring ensures that talent is matched to the right opportunities at the right time.

Adopting learning and employment records (LERs) is an important piece to make skills-based hiring accessible and effective. LERs are digital records of an individual's formal or informal learning and employment. They can represent diverse workplace or classroom experiences — a game changer for traditionally sidelined workers and employers desperate to fill talent gaps. Participating states are at varying stages in this work. 

Skills-based hiring not only democratizes the job market, making it more accessible to a diverse range of candidates, it also empowers learners and workers to pursue diverse pathways that align with their strengths.