The pandemic changed how companies hired — it moved from looking for specific skills rather than proven competencies in a particular industry as companies saw the gap in their skill pool. The pandemic also saw people actively reskilling and upskilling themselves as they realised the need for more tech knowledge and digital know-how, as remote work became a norm.
Consider this: PWC’s The Future of Work report highlights that two out of five people around the world believe that traditional employment won’t be around in the future. Instead, people will have their own ‘brands’ and sell their skills to those who need them. In fact, people are more likely to see themselves as members of a particular skill or professional network than as an employee of a particular company.
Skill-based hiring vs industry-based hiring
Skill-based hiring looks at a candidate’s holistic skill set, which transcends across verticals and industries. Industry-based hiring, as the name suggests, depends on a particular industry experience, last job title, and the educational or vocational degree of a candidate.
Ideally, a hire should demonstrate a healthy mix of skills and industry-based learning, but the need also depends on which role you are hiring. For a tech-based job, skills matter more than educational qualification and past experience, but for a creative job, past experience and mettle matter more.
Employers, increasingly, are leaning towards hiring on the basis of skills and competencies rather than focusing on advanced degree completion as a prerequisite. This has resulted in cross-industry hiring and filling in-demand roles more effectively. However, this has also led to people being unemployed because their experience doesn’t account for much anymore if they don’t have the prerequisite skills.
Before an employer starts the hiring process, it is imperative to note the pros and cons of both — skill-based hiring and industry-based hiring — to proceed.
Also Read: Why inclusive hiring matters for a startup ecosystem
Do you want a diverse talent pool?
The companies, with or without tech at its core, now seek talent that is resourceful, adaptable and resilient, thanks to the advent of COVID-19, which brought with it various business challenges. Tech skills are in demand and easily transferable across sectors and industries, whereas experience in the same industry needs upskilling in most cases.
For HR to evaluate people on their skill sets instead of work experience helps create a diverse pool of talent within an organisation, which leads to better problem-solving in a crisis, bringing and implementing fresh ideas.
Considering people with the same industry experience remains important when seeking top candidates in a company, for they know the pitfalls and how to avoid roadblocks, how to motivate the team members and bring soft skills to the table such as communicating efficiently and quickly, ability to work with various teams, and prioritise.
Do you have the bandwidth to train?
According to an HBR article, JPMorgan Chase added US$350 million to their US$250 million plan to upskill their workforce. Amazon is investing more than US$700 million to provide upskilling training to their employees. PwC is spending US$3 billion to upskill all of its 275,000 employees over the next three to four years.
Digital transformation, tighter budgets, and rising inflation have led companies to cut down drastically on budgets that were earlier kept for training their existing workforce. With the demand to ‘hit the ground running’, HR is looking for people who come with the required skills when joining a company.
However, many organisations are still making an effort to train their existing workforce, for they have the industry know-how and are equipped to translate a crisis into a win-win when equipped with better skills. This also ensures a good career progression for the employees as well, apart from them being loyal to your organisation.
Also Read: A paradigm shift needed: Hiring within the tech startup ecosystem
Which skills are important for your organisation?
On LinkedIn, one can see an increase of 21 per cent in job postings that now advertise skills and responsibilities rather than just listing out qualifications and industry-specific requirements.
However, the Future of Work Trends 2022 report says that 69 per cent of companies value a person’s curiosity and willingness to learn more than their degree and experience. Though technical know-how is valued more now, it is important to gauge for an organisation whether it wants to hire on the basis of foundational and transferable skills as well.
While evaluating applicants, companies are now increasingly focusing on degree and industry-based experience as hygiene instead of hiring on the basis of skills and competencies.
With people increasingly switching from their core industry to unchartered territory, it has become imperative to assess candidates on the basis of skill sets more than ever. While experience trumps the top and middle order, companies are relying on people with the required skills, especially at the junior level.
Going forward, it is a given that skill-based hiring will overtake industry-based hiring, but it will also lead to more upskilling of the resident talent within a company.
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