Skills-based hiring poised to redefine HR strategies in the year ahead
Get ready for a major shift in how companies hire talent.
The timeworn approach of focusing on job titles and roles is rapidly giving way to something more practical: hiring based on specific skills. And 2025 could be the year the trend really takes off.
One big reason: A persistent talent shortage that’s pushing companies to get creative. Josh Millet, founder and CEO of talent management platform Criteria, points out that hiring managers across industries are struggling to find qualified candidates — even in sectors showing job growth. “This is prompting companies to turn to skills-based hiring to fill the gap, prioritizing demonstrated transferable skills and potential over previous experience,” he said.
“People will hire for skills, not for a role,” added Eric Hutto, CEO of tech company Diversified. “We used to hire vps of marketing. Now, we’re looking at specific skill sets we need in marketing in a digital age” — a change that shows how traditional hiring just isn’t cutting it anymore for employers.
The rise of AI in recruiting is further driving the shift. Millet notes that as candidates use AI to polish their resumes, it creates a “race to the middle” where CVs become less distinctive. Skills-based hiring offers a way to cut through the AI-enhanced noise and really evaluate what candidates can do.
Kim Lanier, managing director of people and change at consultancy Protiviti, said that as AI and automation reshape how work gets done, companies must take a closer look at exactly which tasks need human skills and which can be automated. In other words, it’s not as simple as just filling a role anymore.
The education landscape is also having an impact. Josh Smith, head of Americas CR and global head of talent at claims administrator Sedgwick, points out that traditional college enrollment is dropping, with a projected 15% decline between 2025 and 2029. As people find different paths to careers, employers are starting to care more about what you can do than where you learned to do it.
The tech factor is huge. Stefani Steinway, senior vp of HR at Equifax Workforce Solutions, notes that pretty much every job now requires some level of tech-savviness. “With technology changing so fast and AI everywhere in the workplace, we need to know exactly what technical skills candidates bring to the table,” she said.
According to e-learning platform Skillsoft, 82% of organizations are already moving toward skills-based hiring. Ciara Harrington, the company’s chief people officer, says that consequently, employers are seeing better agility, performance and bottom-line results.
Making the switch requires some fundamental changes.
For one, Millet emphasizes the importance of skills-based assessments. “They allow hiring managers to evaluate candidates in areas that are crucial to the role, going beyond what can be learned from resumes,” he said. Such assessments can measure everything from problem-solving abilities to emotional intelligence and creativity.
Furthermore, job descriptions should be recast to focus on specific skills rather than vague role requirements. Companies might need to remove or reduce experience requirements and degree requirements. As Smith emphasizes, everything from performance reviews to promotions must align with this skills-focused approach.
Moving forward, employers will need to navigate both the opportunities and challenges of this new approach. As Harrington puts it, while skills-based organizations may be the model of tomorrow, success depends on a holistic approach. “It’s all about being able to assess your current workforce’s skills, creating a clear framework for organizing those skills, and making sure your training programs actually match what both employees and the organization need,” she said.