Only 12% of companies feel effective at skill validation, prompting concern when trying to implement a skills-first hiring approach, according to a May 1 report from HireVue and Aptitude Research.
Half of the respondents reported feeling frustrated over the task of validating skills, with 72% still relying on resumes or self-reported skills to assess talent. Only 26% said they feel confident in their current skills approach.
“Skills-based hiring has never had more urgency. Yet, the discussions around skills have not progressed much over the past few years,” Madeline Laurano, founder and chief analyst at Aptitude Research, wrote in the report.
“For many companies, it has been misaligned and misguided,” she added. “And the result is that companies are stuck on skills — unsure where to start, whether to build a skills inventory, invest in technology, or redefine their hiring models.”
One major issue is that companies have primarily focused on inferred skills — based on resumes, job titles and job experience — rather than validated skills, Laurano said. Although these aspects can provide context, they don’t always confirm competency. Validated skills, on the other hand, can be directly assessed through structured evaluations, simulations and assessments driven by artificial intelligence tools, she noted.
In the report, companies pointed to obstacles making it difficult to adopt skill-based hiring such as resistance to change among hiring managers or leadership, technological limitations, a lack of alignment on the definition of skills, an inability to measure return-on-investment of a skills-based approach, and compliance and legal concerns.
Companies often lack measurement, according to the report, with few tracking the impact of skill validation on outcomes such as hiring efficiency, job performance, retention or bias reduction.
More companies are developing formal infrastructures — such as skills mapping and skills-based rewards — to support their talent strategies, according to a Mercer report. These skills-based strategies can close talent gaps and encourage leadership buy-in, the report found.
Employers are also shifting to skills-first hiring due to AI-driven talent concerns, a recent Workday report found. Half of leaders said they’re worried about future talent shortages, yet fewer than one-third said they’re confident their organization had the skills for long-term success.
To help employers, the Business Roundtable has released three tools for implementing skills-based hiring. The guides include insights from major companies, such as Accenture and Bank of America, with advice on revising job requirements, training managers and communicating with stakeholders.
