The Link between DEI and Skills-Based Hiring
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As we stated in our first article, skills have been the currency since the beginning of mankind. The skills you have and the skills you hone are yours and you take them with you wherever you go.
WATCH: 2024 AI in Hiring Trends - Navigating the Governance, Concern, and Power of Effective Solutions
We all eventually will learn that lesson. In 2016, I - Kathryn - competed in a hackathon and the team I was a part of wanted to create a way to mask age, gender, sexual orientation, nationality, the color of one's skin, and any other attributes, or items on a resume that could be consciously or unconsciously used against an applicant.
We called it "Diversity in Tech." Our team placed third in the competition with one judge making the statement that this could negatively impact the culture of his company. Being me, I rebutted, "How would adding diversity to your culture be negative?" ...this might be why we came in third place!
READ: Previous Columns by Kathryn Carpenter-Fortin and Markus Bernhardt
Even back in 2016, when focusing on skills, the benefits were immense:
Skills-Based Hiring Benefits
- Reduced bias in traditional resume/CV hiring
- Average of 70% Reductions in cost-to-hire with $5K-10K to replace someone
- Average of 50% to 70% reductions in time-to-hire
- Ability to obtain jobs without a degree or with the "wrong degree," if skills are a match
- Greater lateral job mobility because the same skills signature can qualify an individual for multiple jobs that have different titles but require fundamentally similar skills
Statistics
In 2014 Auburn University found that using fictitious names on applications meant black applicants received 14% fewer interview requests than identical white counterparts.
In 2011, the Urban Institute found that younger applicants were 40% more likely to receive job offers than older applicants.
In 2012, the Institute for Research on Labor and Unemployment found that there was a hiring bias against unemployed applicants that increased in proportion to the length of time someone was unemployed.
Benefits of a More Diverse Workforce
By bringing together individuals from different backgrounds and experiences, businesses can more effectively market to consumers from different racial and ethnic backgrounds, women, and consumers who are gay or transgender, according to the Center for American Progress. Diversifying the workplace helps businesses increase their market share.
When companies recruit from a diverse set of potential employees, they are more likely to hire the best and the brightest in the labor market. In an increasingly competitive economy where talent is crucial to improving the bottom line, pooling from the largest and most diverse set of candidates is increasingly necessary to succeed in the market.
The Rise of Skills-Based Hiring
Eight years later, organizations are seeing the benefits of being skills-focused and skills-based organizations are in the forefront. A skills focus, not only can be more inclusive, but can also help companies find the skills they need across their organization and in other industries. Equally, a skills-focus allows the people with those skills to find other careers outside their intended industry.
An example is someone working for a small agriculture company who programs the equipment to hone in specifically on what they are harvesting and fine tune it to their needs, has transferable skills. These skills apply not only within the agriculture industry, but also with equipment manufacturers and in other industries. The person who has those skills owns those skills.
READ: Shaping Organizational Practices Under Anti-Diversity Legislation and Regulatory Constraints
One challenge for job applicants today is that they do not know how to adjust their resume or CV to reflect their transferable skills. Without using the proper keywords, they might not even make the first cut despite having the skills and potential for the job in question. These job bots scanning resumes and CVs can be counterintuitive for the companies that are using them. In addition, they may impede DEI, unless AI is being utilized to build skills identifications into their LLMs.
In the Near Future
Soon, applicants will be able to spare themselves adjusting their resumes and profiles to the exact fit and wording required by a role each time they apply. This is a relatively meaningless and time consuming process anyway. After all, what is the value of having 300 applicants for a role, all of whom have copied the desired skill set one-by-one onto their profiles and resumes, adjusted further by separate AI tools that scour the job ad and role description for further keywords to use to beat the algorithm?
While this opens a whole new world of talent acquisition treasures and opportunities, it also unearths key challenges that must be solved. In the past, certificates, such as a "mechanical engineering degree from a top-tier university" formed the foundation in the search for talent. These certificates were provided by credible providers, who set a certain standard, which at least broadly aligned with the requirements of the labor market.
However, as the alignment of such educational offerings and certificates may be less viable in the Future of Work, with new skills arising at an ever-accelerating pace, the need for other new, trustworthy sources to validate skills and accreditation arises. Teams are on the forefront, with in-person interviews as well as AI-led interviews, which can form a vital strategic element of the hiring process. This is another way of tackling the true challenge of discerning whether the skills and experience exist merely on paper or also in the real world.
WATCH: Sessions on Diversity, Equity, Inclusion, and Belonging from HREN's Latest DEIB Webinar Series
Other routes are also available, and organizations are getting more and more creative in a competitive market. Or maybe more industries should have a stage (pronounced "stahzh") like restaurants do for specific roles, where an applicant is asked to come in for a day and work with the team to assess their acuteness within the skills they seek in a hire.
Skills-Based Hiring as a DEI Strategy
To a certain degree, employers must return to the resume or CV. At least for the moment, experience as well as promotions and career progression are still hard currency - at least when compared to self-proclamation of the exact set of skills described in the job and role description.
In an evolving job market, where diversity and inclusion are paramount, transitioning to skills-based hiring meets modern needs while enhancing organizational performance. As companies reimagine their approach to talent acquisition, it becomes clear that focusing on skills over traditional resumes can unlock a richer, more diverse workforce.
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