According to research conducted by ManpowerGroup in 2023, Brazil saw a 19 percentage point fall in hiring volume compared with the previous year. A global reduction of 4% in hiring was also recorded in the NEO index (Net Employment Outlook).
Several factors shape that change in the labour market at home and abroad, and as the market develops we see a constant trend: the search for hires that are more accurate and better aligned with a company's organisational culture.
In unstable times it is common for companies to seek out talented professionals in order to drive business growth. In that context companies are moving towards a competency-based approach to hiring, with the aim of mitigating the risk of bad hires.
The Skill-Based Hiring Approach
One response to that trend is the adoption of hiring based on skills and competencies, also known as "skill-based hiring". This recruitment and selection methodology puts the main focus on the specific skills and competencies needed to perform a role. Rather than prioritising candidates' past experience or academic background, skill-based hiring concentrates on the technical and practical skills an individual has that are directly relevant to the job in question.
Assessing on the Basis of Skills
In this hiring process, recruiters and hiring managers assess candidates on the basis of their skill set. That is done through specific skills tests, structured interviews and other assessment tools. The aim is to ensure candidates have the skills needed to meet the demands of the role from the outset, thereby shortening the time it takes them to settle in and increasing productivity after the hire.
Recruitment and Selection by Skills and Competencies: what are the advantages?
1 - Better cultural fit between company and employees
The approach allows you to select individuals who share the organisation's vision, believe in its mission and fit harmoniously into the corporate culture. That alignment promotes a positive working environment, clear expectations, higher productivity and a greater level of engagement among employees.
2 - Lower turnover and hiring costs
Skill-based hiring helps reduce turnover, meaning the rate at which employees leave the company. When people are selected on the basis of competencies aligned to the role, they tend to adapt more easily to its responsibilities. That produces greater job satisfaction and, consequently, a fall in voluntary departures.
Lower turnover also means savings in money and time. Recruitment and selection is expensive, involving spending on job advertising, interviews, training new employees and more. By choosing candidates who better fit the demands of the role, companies can save significantly on those costs.
3 - Greater efficiency in hiring
Skill-based hiring is a more efficient process than traditional methods, because recruiters can identify qualified candidates more quickly, eliminating those who do not meet the essential requirements. That speeds up the filling of open roles, which is crucial, especially where positions are critical to the company.
4 - A more diverse workforce
By focusing on candidates' skills and competencies, companies have the opportunity to diversify their workforce. That means they can consider candidates from different backgrounds, experiences and academic paths, provided they have the skills the role requires. That diversity can enrich the company culture and bring new perspectives, which can lead to innovation and creative solutions.
5 - Sustainable growth
Skill-based hiring contributes to sustainable growth over the long term. By selecting candidates aligned with the organisation's values and objectives, companies build cohesive, committed teams. That in turn drives performance and innovation, allowing companies to adapt better to changes in the market and grow consistently.
6 - Adapting to digital transformation
In an increasingly digital and technological world, specific skills and competencies become crucial. Skill-based hiring helps companies adapt to digital transformation by identifying candidates with knowledge and skills relevant to constantly evolving technological demands. That is fundamental to remaining competitive and relevant in today's market.
Now for the challenges of skill-based hiring
Challenges of Recruitment and Selection by Skills and Competencies
Although skill-based hiring offers many advantages, it also brings challenges companies should watch for:
1 - Accurately identifying the skills needed: Determining the specific skills required for each role can be difficult, since job requirements can evolve quickly. Companies need to keep up with market trends in order to identify the most relevant skills.
2 - Assessing skills properly: Assessing candidates' skills accurately requires appropriate assessment tools and methods. That may call for investment in technology and in training for recruiters.
3 - Balancing skills and culture: Finding the right balance between technical skills and company culture can be a challenge. It is important that candidates not only meet the technical requirements but also fit the organisational culture.
4 - Developing skills: Although skill-based hiring is effective at finding qualified candidates, companies should also invest in the continuous development of their employees' skills to keep them relevant in a constantly evolving working environment.
Conclusion
Skill-based hiring is an approach gaining prominence in recruitment and selection today. It is a vital trend that not only improves the process of acquiring talent but strengthens organisations' capacity to thrive.
Beyond improving how recruitment performs, this model focused on skills and competencies drives organisations' long-term success, allowing them to meet the challenges of a constantly evolving labour market and prosper in a competitive environment. It is an approach that deserves attention and consideration from companies seeking to build high-performing teams.