The Rise of Skill-based Hiring

Companies worldwide are struggling to attract and retain highly skilled workers.

Research conducted by Dr. Bradford Smart, author of Topgrading, shows that the estimated cost of a bad hire can range between 5 to 27 times the candidate’s annual salary.

Companies who apply skills-based hiring have stated benefits such as:

  • being able to tap into a broader, more diverse pool of talented individuals
  • a more efficient hiring process, resulting in faster ‘time-to-hire’
  • decrease in job advertising expenses and less time spent on training

Article: Why Skill-based Hiring Is On The Rise – Forbes

2023 CEO Priorities for Talent

Recently, McKinsey conducted its latest CEO Excellence Survey, to take the pulse of leading CEOs’ evolving priorities and the actions they’re taking in response.

The surveyed CEOs indicated that they feel the time has come to refocus on employee performance, after several years of focusing more on helping employees weather the pandemic and other challenges. As Meta CEO Mark Zuckerberg has told his company’s employees, workers should prepare to have their “performances graded more intensely.” While this will be uncomfortable for some, the best CEOs believe that talented employees are by and large welcoming of such a stance.

Top CEOs are also expecting their employees to spend more time in the office or with customers in 2023. They believe that doing so is ultimately good for both employees and customers as it benefits mentorship, community, innovation and purpose in the workplace.

Article: CEO Excellence Survey – McKinsey, March 2023

What’s Next in Your Career?

Ann Hiatt, author of ‘Bet On Yourself’, notes that “reminding ourselves of what we value most in our lives and careers can illuminate empowering opportunities that would otherwise go unnoticed. We can actually engineer our own luck simply by knowing what we’re looking for and seeking it out. This doesn’t need to take much time, but it does need to be purposeful. Value realignment rarely happens passively.”

She offers 3 P’s (Purpose, People & Pace) to consider when you’re making a complete career change or seeking to refocus your current role on what feels most meaningful to you.

Read more: How to Figure Out What You Want Next in Your Career

How to Attract Top Talent

Companies looking to overcome the talent crunch should, for some roles, consider widening their funnel of candidates by seeking people who possess the capabilities most predictive of success in the role. New hires can learn the rest on the job through training (both formal and informal).

“Objectively testing for capabilities and skills rather than relying on past experience and credentials, opens up more opportunities for underrepresented candidates and widens the company’s talent funnel” – Frick, George & Coffman

Reade more: How to Attract Top Tech Talent (HBR)