Do you find it increasingly difficult to attract the right candidates for your open roles? You’re not alone. Research shows that 87% of companies struggle to secure the talent they need. At the same time, job seekers report hitting a wall, unable to find employers willing to give them a real shot.
So what’s causing the disconnect? How does a market with high demand and high supply still manage to underperform?
Traditional recruitment models may be the issue. Hiring practices that rely heavily on resumes and past job titles are increasingly misaligned with how work and talent actually function today. The solution may be a switch toward skills-based hiring (at least in some industries).
Let’s see what this means and how to make the change for your company.
What Is Skills-Based Hiring?
With skills-based hiring, the focus is on what candidates can actually do: their competencies, hands-on abilities, and technical abilities. Traditional markers of success like college degrees, previous job titles, or years of experience take a back seat.
Making that shift, however, requires a rethink of how companies hire. Most recruitment systems, job boards, and interview formats are still built to screen for familiar signals like four-year degrees and linear career paths. There are still recruiters who grill candidates about a gap in their resume, for Pete’s sake!
To switch to skills-based hiring, companies need to learn how to evaluate candidates beyond education credentials and experience requirements. Many valuable aptitudes don’t translate well onto a resume, which is exactly why strong candidates don’t even make it to the initial interview.
How to Make the Switch
The good news? You don’t have to start from scratch. While skills-based hiring is only now gaining mainstream traction, it’s long been standard practice in industries like tech, manufacturing, hospitality, and the skilled trades.
And, as more companies are rethinking their hiring practices, there’s conclusive proof that hiring based on skills is the best approach. The 2025 TestGorilla report shows that 90% of organizations that prioritize competencies have lower mishires rates and are better adapted to an evolving market.
Now, here are three paths most organizations take when switching hiring strategies:
1. Create a School to Company Pipeline
Many CEOs prefer to partner with regional training providers like South Texas Vocational Technical Institute (STVT) to secure dibs on fresh talent.
The STVT technical training programs help students gain practical experience and industry-relevant skills that translate directly into the workforce. Interested companies help with the practical aspect of the job by offering internships, mentorships, and other programs that connect students with the real world.
It’s a bit of a “try before you hire” arrangement that works for all parties involved:
- The students can jump straight into the workforce with a company they know
- The company gets to hire top talent that’s already familiar with the culture
- The school boosts its reputation and attracts more students
2. Redefine Job Roles
One of the most important skills a good leader needs is knowing when to switch gears. If your company struggles to find the right candidates, this is a clear indicator that things need to change. You can start by examining the core of your recruitment strategy: how you define job roles.
To attract the right talent in a skills-first market, it’s essential to break down each position into its constituent parts. Say you’re in the market for a Project Lead. Here’s what this looks like, deconstructed down to the core skills:
| Competency Type | Skills |
| Core (shared values and soft skills every employee needs) | Conflict resolution, adaptability |
| Functional (hard skills specific to the department) | Agile methodology, financial modeling |
| Growth (nice-to-have skills, but can be trained on the job) | Public speaking, advanced AI prompting |
3. Change the Screening Process
Based on a 2024 study by the Burning Glass Institute, only 1 in 700 new hires comes from a well-designed skills-based recruitment process. This means companies want to reform their hiring practices, but few actually follow through.
Those who do follow through start by redesigning their screening process. Here are a few small changes that yield impressive results:
- Ask candidates to do a small piece of the actual job as a test
- Implement blind skills assessments
- Design scenario-based situational judgment tests
- Use AI-driven gamified assessments to measure cognitive and emotional traits
Design Your Skills-First Approach
While AI-powered tools are likely to absorb some entry-level tasks in the near future, the human workforce isn’t disappearing. Companies still need well-trained people who can think critically, adapt quickly, and operate effectively in a high-tech environment.
That’s exactly why building a skills-based hiring strategy matters more than ever. Start by redefining what each role truly requires, take a hard look at how you screen candidates, and invest in creating a reliable talent pipeline. Do it right, and the payoff won’t take long to show.
