The skills needed to succeed in the workplace are different from before and the need for targeting the right skills during hiring are more urgent than ever.
Relying on traditional hiring methods (eg., CV, motivation letter, education) that have low predictive power and “hidden” information is neither sufficient nor effective for us to identify the best talent in the market…
Instead, a better way to secure the star candidates is to adopt a new way of hiring – skill-based hiring.
Introduction to skill-based hiring
Current situation in the labour market
It’s not only employees struggling to find jobs, it’s also companies that are struggling to source and hire suitable candidates.
For instance, in February 2020 alone, there were 712,000 open job vacancies in Germany, and at the same time 2.3 million people were unemployed (Fuller et al., September 2021).
The root cause of this?
Flawed screening conditions during the recruitment process, which are likely to be unfavourable against candidates that are actually competent to fill the role. These people then stay ”hidden” from employers even though they can perform well and bring a multitude of benefits to the company.
For example, some employers might require people to have certain educational degrees or years of work experience. Skilled people who would like to switch career paths, have unconventional backgrounds, or just graduated might then be overlooked because of those requirements. .
Solution: Implement Skill-based hiring instead
Let’s think about this together: what exactly is the information you want to get out from different screening methods?
- From a CV, you try to figure out candidates’ transferable skills (such as problem-solving skills, collaboration skills) or job-specific skills (such as certifications or specific editing skills) from past events.
- From education, you try to figure out the job-related knowledge candidates obtained from the degree they had.
- From work experience, you try to figure out their employability skills from their past working experience.
Now stop for a second – do you see any similarities between these three methods?
That is: We want to know about whether candidates’ current level of skills fit the open positions.
Since we would need to invest effort into evaluating (or even guessing) candidates’ employability second-handedly through these screening methods, why don’t we start screening through skills directly from the beginning? 😉
That’s where skill-based hiring comes in handy.
Skill-based hiring refers to a hiring process that focuses on candidates’ measurable and objective job-relevant skills rather than only educational qualifications (Butrica & Mudrazija, 2022). These job-relevant skills can broadly be categorised as transferable skills and job-specific skills, which are either general in nature or specialised accordingly with different jobs. Of these massive ranges of skills, which of them are more important when hiring? We will first take a brief look at the difference between transferable skills and job-specific skills.
Transferable skills vs Job-specific skills
Transferable skills
Transferable skills have many other different names (such as soft skills, generic skills, employability skills). Quite literally this describes skills that can be transferred between different contexts or job roles with little or no need for adaptation (Bridges, 1993; Stevens, 1996).
Nägele & Stalder (2017) has summarised some of the skills that are often labelled as transferable skills:
Basically, it covers all (soft) skills that are central to occupational competence which can be applied to all sectors and at all levels, including leadership, communication, teamworks, time management and personal attributes (Chadha, 2006; Mello & Wattret, 2021). Furthermore, each of these groups can be further subdivided into more specific behaviour. For example, personal attributes include ability to learn, problem-solving skills/ initiatives, adaptability, resilience, stress tolerance and more.
These transferable skills could be developed implicitly through personal experience such as studying abroad, work placement, volunteering or service learning, participating in extracurricular activities, taking on leadership roles etc. (Jones, 2013; Chadha, 2006).
For instance, taking on leadership roles during our colleges that need organising activities or intensive interaction with other people help us to enhance our communication skills, interpersonal skills, collaborative abilities, project management skills etc. These skills then can be adapted to our future work environment.
However, there is a large variety of activities that could help the development of such skills. Therefore, drawing the assumption that only a certain type of experience (such as extracurricular college activities or studying abroad) could indicate these skills would exclude a large group of people who may not have had the same opportunities.
Finding a valid tool to measure these transferable skills is thus of high importance to remain inclusive and open up the talent pool.
Job-specific skills
Job-specific skills (also known as hard skills, technical skills), are the bare minimum criteria that make a candidate qualified for a certain job role (Tripathy, 2020). That is, job-specific skills allow people to stay in their profession according to what they have learnt before. These job-specific skills are usually learnt explicitly by taking formal courses or on-site training.
Consider a person who completed a number of courses, acquired a certain knowledge regarding software engineering and finally got a degree. This degree then helped them to become a software engineer. In comparison, consider another person who completed an intensive online course, practised different ways of coding and earned a certification. This person would then be eligible for software engineering roles as well.
When and why are these skills important when hiring?
Being the first step of hiring processes, screening has one goal: we want to filter out the unqualified candidates while keeping the star candidates in the process. Therefore, we can only choose the minimum qualifications to ensure that we are not missing out on any star candidates (Hamilton & Davison, 2018).
Here’s what you need to know when choosing certain transferable skills and/or job-specific skills as your screening criteria.
Job-specific skills
For some high-skilled job roles, job-specific skills are undeniably important since the first day of employment:
- For example, a lawyer needs the knowledge of the law to be able to do their work.
- A doctor needs to know the clinical skills and knowledge about diseases to accurately make a diagnosis.
- A data analyst needs to know coding languages to complete the analysis.
Some other research has indicated the importance of job-specific skills in some industries, including supply chain management (Flöthmann et al., 2018), IT industry (Misra & Khurana, 2017), entry-level public relations (Meganck et al., 2020).
Although these researches have concluded that job-specific skills are important for career success, they also listed out other transferable skills that are essential for career advancement. Some of the knowledge about the new technologies cannot be possessed before the tech is introduced, so how to work with newly emerging tech can only be taught through on-job-training. It is important to note, the success in this kind of training does not necessarily depend on job-specific skills.
One of the examples is the trendy topic artificial intelligence (AI), where the advancement of AI could replace the productivity of equivalent 300 million full-time jobs in the near future (Vallance, 2023, March 28). I am sure you have heard of ChatGPT quite often these days. After its introduction, employees are unavoidably forced to learn how to use it and incorporate it with their jobs to increase their productivity.
Put another way, your screening processes might consist of tons of job-specific skills and you assume candidates possessing these skills are likely to be sufficiently successful. In this way, you are likely to hire adequate employees for standardised or less autonomous jobs but they may not be able to provide a competitive advantage for your company (Hamilton & Davison, 2018).
Thus, except for the jobs where hard skills are extremely essential to get the work done, job-specific skills may not be the most critical screening criteria.
Transferable skills
A study in Harvard University has shown that 80% of achievements in a career is influenced by soft skills and only 20% by hard skills (from Qizi, 2020). CEOs from fortune 500 companies also claimed that 75% of their success in work is caused by soft skills and only 25% by hard skills (from Qizi, 2020).
From academic literature, transferable skills like problem-solving or people skills also contribute to 75% of long-term career success (e.g., Robles, 2012; Azim et al., 2010). Other than that, a research on job posting reveals that higher wage labour markets demand higher cognitive skills (e.g., analytical skills, critical thinking, problem-solving) and social skills (e.g., communication, teamwork, negotiation) for the prospective candidates (Deming & Kahn, 2018).
Regardless of junior or senior positions, transferable skills play an important role in your perception of a candidate’s employability:
- No matter how talented a candidate is, we want them to be able to integrate themselves into the organisation or work teams. Screening through transferable skills serve as a signal of whether the prospective candidates are able to fulfil this demand (Bangerter et al. 2012 ).
- For junior levels or graduate positions, where the fresh graduates need to transit their knowledge from an academic setting into a workplace setting, we often lack reliable information regarding how they would perform in a workplace setting. It is because the fresh graduates haven’t had a chance to demonstrate their abilities in the workplace yet. Transferable skills, such as problem-solving skills, adaptability skills, and collaboration skills, are now speaking for these new entrants about how competent they are to succeed in the position (Nägele & Stalder, 2017).
- For senior positions, we would assume that people who have similar work experience can be onboarded quicker than those who are new to the industry. However, people would also bring rigidities from previous jobs (Dokko et al., 2009) and the “similar” working experience might differ greatly in terms of company climates or ways of doing things (Van Iddekinge et al., 2019). Thus, compared to the work experience, measuring targeted transferable skills directly would be a more accurate way to assess how well the candidates might integrate into current job roles.
In short, job-specific skills can make you a professional in certain fields; whereas transferable skills determine your ability to fit into particular structures, apply your knowledge and skills, and ultimately succeed in your career.
Thus, in order to screen efficiently, these are the two things that you need to consider while setting up your screening criteria.
To conclude
Due to the current situation in the labour market, we need to switch our hiring strategies to skill-based hiring. We have to carefully choose the skills that are essential to the job position to minimise our screening criteria in order to keep star candidates in the hiring funnel.
Transferable skills and job-specific skills are both important to different extents serving as screening criteria:
- Job-specific skills are important for certain roles but not sufficient to represent the whole picture of candidates’ potentials.
- On the other hand, transferable skills serve as a signal to employers on how well a potential talent can integrate themselves into organisations, regardless of junior or senior positions.
References
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Bangerter, A., Roulin, N., & König, C. J. (2012). Personnel selection as a signaling game. Journal of Applied Psychology, 97(4), 719. https://doi.org/10.1037/a0026078
Bridges, D. (1993). Transferable skills: a philosophical perspective. Studies in Higher Education, 18(1), 43-51. https://doi.org/10.1080/03075079312331382448
Butrica, B. A., & Mudrazija, S. (2022). Skills-Based Hiring and Older Workers. Washington, DC: Urban Institute.
Chadha, D. (2006). A curriculum model for transferable skills development. Engineering education, 1(1), 19-24. https://doi.org/10.11120/ened.2006.01010019
Deming, D., & Kahn, L. B. (2018). Skill requirements across firms and labor markets: Evidence from job postings for professionals. Journal of Labor Economics, 36(S1), S337-S369. https://doi.org/10.1086/694106
Dokko, G., Wilk, S. L., & Rothbard, N. P. (2009). Unpacking prior experience: How career history affects job performance. Organization Science, 20(1), 51-68. https://doi.org/10.1287/orsc.1080.0357
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Fuller, J., Raman, M., Sage-Gavin, E., Hines, K., et al (September, 2021). Hidden Workers: Untapped Talent. Published by Harvard Business School Project on Managing the Future of Work and Accenture.
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Van Iddekinge, C. H., Arnold, J. D., Frieder, R. E., & Roth, P. L. (2019). A meta-analysis of the criterion-related validity of prehire work experience. Personnel Psychology, 72(4), 571-598. https://doi.org/10.1111/peps.12335
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Candidates complete various games that determine cognitive and behavioural abilities, allowing people to receive equal chances when being considered for a job. This also allows us to boost the level of diversity within our organisation.
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