Many organizations are abandoning traditional hiring practices, which have long established invisible barriers to exclude global talent. A new approach is reshaping how they build their teams, one that looks beyond degrees and conventional credentials to discover exceptional talent.
With remote work technologies and digital collaboration tools erasing geographical boundaries, the global talent landscape is evolving. These changes inspire organizations to rethink and restructure their talent acquisition and team-building approaches.
The signs of this transformation are evident, as 81% of employers are now embracing skills-based hiring practices. This shift represents more than a trend—it signals a fundamental change in how organizations evaluate and acquire talent. Skills-based hiring has surfaced as a powerful strategy for building diverse, capable teams across borders.
The shift toward skills-based hiring
Conventional recruitment practices have favored candidates with prestigious degrees and notable career paths. This approach has inadvertently screened out skilled professionals who took alternative routes to develop their expertise.
But the numbers tell a compelling story about the workforce reality: with 8.8 million job openings and only 6.3 million professionals available to fill them, organizations must reimagine their talent strategies.
A skills-first recruitment strategy evaluates candidates based on their actual capabilities and demonstrated competencies. This method uses practical assessments, real-world problem-solving challenges, and portfolio reviews to identify qualified candidates. The approach proves especially valuable for global organizations seeking to build diverse, talented teams across different labor markets and cultures.
Research shows that skills-based hiring is five times more predictive of future performance than educational credentials and 2.5 times more predictive than work experience. Organizations that embrace this approach gain access to hidden talent pools and create more inclusive pathways to employment.
For global enterprises, this shift carries additional significance. Different regions often have unique educational systems and professional development paths. A skills-first approach helps organizations recognize and value expertise gained through various channels—whether through vocational training in Germany, apprenticeships in Switzerland, or hands-on experience in emerging markets.
How skills-based hiring increases workforce diversity
Skills-based hiring transforms traditional recruitment by breaking down barriers that historically limited access to opportunities. Lauren Wesley Wilson, a DEI expert, told Essence about this impact: “Skills-based hiring aids in mitigating hiring biases. Once hired, Black women can further progress and attain leadership positions, paving the way to recruit the next generation of diverse talent.”
Expands access to underrepresented talent
Skills-based hiring opens doors for talented individuals who have developed expertise through non-traditional paths. Over 71 million U.S. workers lack four-year degrees but possess valuable skills gained through work experience, military service, or vocational training.
This approach mainly benefits regions where formal education systems differ from Western standards. It allows organizations to tap into global talent pools with practical skills and expertise.
Eliminates bias in hiring
Traditional hiring methods often favor candidates from prestigious universities or those with extensive corporate experience, perpetuating systemic bias. By focusing solely on abilities needed for the role, skills-based hiring helps level the playing field.
Research shows that about a third of organizations experience hiring bias when it comes to diversity. Yet, 90% of employers who employ skills-based hiring report improvements in diversity, and organizations in the top quartile for gender and ethnic diversity demonstrate 25% higher profitability.
Supports people with non-linear career paths
The approach particularly benefits professionals with diverse career trajectories. Military veterans, for example, receive technical training and develop strong interpersonal skills throughout their service, making them well-qualified for numerous civilian occupations. Similarly, career changers, freelancers, and those returning to the workforce can showcase their capabilities through practical assessments rather than traditional credentials.
Data and examples: the success of skills-based hiring in driving diversity
The transition to skills-based hiring isn’t just a theoretical improvement - organizations worldwide report significant, measurable gains in both workforce diversity and business performance. The data and real-world examples paint a clear picture of this transformation.
Statistics on skills-based hiring and diversity
Skills-based hiring demonstrates a measurable impact on workforce diversity through compelling data:
- LinkedIn reports that skills-based hiring increases the proportion of women in talent pools by 24% in jobs where they are traditionally underrepresented.
- Companies using skills-based assessments are 50% more likely to achieve their diversity and inclusion goals.
- An ADP report found that 90% of companies report fewer hiring mistakes with skills-based approaches, and 94% find that skills-based hires outperform those hired based on degrees or experience.
Research shows the approach creates substantial improvements in representation:
- Fewer than one in five (17.8%) of U.S. job postings required a four-year degree or more in January 2024.
- Skills-based hires demonstrate 9% longer tenure at their organizations compared to traditional hires.
Case studies of companies leading in skills-based hiring
Microsoft’s Leap Apprenticeship Program demonstrates remarkable success:
- Offers 16-week immersive apprenticeships across engineering and business roles
- Expanded from software engineering to include UX, support engineering, and business program management
- Participants range from age 19 to 73, creating age diversity alongside other forms of representation
As highlighted by TestGorilla, IBM has emerged as a pioneer in skills-first hiring by:
- Opening 50% of job postings to candidates with the right skills regardless of degrees
- Creating “new collar” jobs focused purely on capabilities
- Seeing consistent increases in diverse and underrepresented talent through this approach
PwC demonstrates the scalability of skills-based hiring:
- Committed $3 billion towards upskilling their global workforce
- Reduced hiring time by 45% compared to traditional recruiting methods
- Recorded a 90% increase in documented skills within one year of implementation
As Brooke Weddle, McKinsey partner, highlights: “One of the things that I’ve seen in the skills-based hiring world is that people are hiring for the most critical skill of a given role or the hardest-to-find skill of a given role. They’re not hiring for all of the skills in a given role.”
How companies can implement skills-based hiring to promote diversity
Adopting skills-based hiring requires a strategic, systematic approach that transforms every aspect of the recruitment process—from how opportunities are communicated to how candidates are evaluated and selected.
Reevaluate job descriptions
The journey toward skills-based hiring begins with transforming how organizations communicate opportunities. Job descriptions serve as the first point of contact with potential talent and often inadvertently create barriers. A thorough audit of current job postings can reveal unnecessary requirements that may discourage qualified candidates.
Essential elements for inclusive job descriptions:
- Replace degree requirements with specific skill competencies
- Remove industry jargon and exclusive language
- Focus on measurable outcomes rather than years of experience
- Include salary ranges to promote pay transparency
- Highlight growth opportunities and skill development paths
Adopt skills assessments and work samples
Traditional interviews often fail to reveal a candidate’s true capabilities. Work-based assessments provide concrete evidence of skills and potential while reducing the impact of unconscious bias in the hiring process. Organizations should implement standardized technical challenges and real-world problem-solving scenarios that evaluate actual capabilities rather than perceived potential.
These assessments must be consistent across all candidates and use clear scoring criteria that focus on measurable outcomes. Companies that have succeeded with this approach typically combine practical exercises with structured interviews that probe for specific competencies rather than general experience.
Leverage technology and AI for fair hiring
Modern hiring technology can significantly reduce bias while streamlining the recruitment process. AI-powered platforms help organizations focus on skills-matching and competency-based screening, creating a more equitable selection process. These tools can analyze job descriptions for biased language and screen candidates based on capabilities rather than keywords.
Organizations should implement systems that remove identifying information during initial assessments, creating a true blind hiring process. Advanced analytics can track diversity metrics throughout the recruitment funnel, providing valuable insights into where barriers might exist and how to address them effectively.
Expand global hiring initiatives
A global approach to skills-based hiring opens access to diverse talent pools while creating opportunities for professionals worldwide. By removing geographic constraints, organizations can tap into new markets and perspectives.
Key strategies for global talent acquisition:
- Establish partnerships with local training programs
- Create virtual apprenticeship opportunities
- Develop market-specific skills assessments
- Build inclusive remote work policies
- Offer multilingual support throughout a global hiring process
Embrace skills-based hiring with Velocity Global
For organizations ready to embrace skills-based hiring on a global scale, Velocity Global’s comprehensive platform enables compliant hiring across 185+ countries while streamlining every aspect of international talent acquisition. Through its Global Work Platform™ and dedicated expertise in international HR, compliance, and payroll, Velocity Global empowers companies to build diverse, skilled teams without the complexity of establishing local entities or navigating complex employment laws. Contact us to learn more.
