How to implement skills-based hiring in tech

Are you struggling with finding good developers? Well, perhaps it's time to explore skills-based hiring.

But first, let’s make something clear - You’re not alone in this challenge.

According to Deloitte, for example, 90% of tech industry leaders name recruiting and retaining tech talent as their major challenge.

Then again, is that really so surprising?

Technology and development are very much skill-based activities, after all. It doesn’t matter how many degrees a person might have. If they don’t have the skill, can’t think creatively, and have low problem-solving skills, they simply won’t cut it.

The problem is that the traditional hiring process focuses exactly on criteria that tell you nothing about those abilities and skills.

To uncover those, you need to move to hiring based on skills instead.

In this guide, I’ll explain skills-based hiring and how this approach to hiring tech talent can help you find and hire top talent.

So, let’s start at the beginning…

What is skills-based hiring?

Skills-based hiring opposes the traditional hiring model of evaluating candidates' abilities based on education, credentials, and self-reported experience.

And there are some good reasons for doing so.

• According to the data from PwC, 58% of organizations say they have difficulty assessing soft skills based on resumes alone.
• One reason, as data proves, might be because candidates frequently embellish their resumes or job applications.
• In fact, according to McKinsey and Company, 46% of employers find it challenging to verify the accuracy of candidates' self-reported skills and experience.

With the skills-based approach, on the other hand, you evaluate the candidates on what we call verifiable skills.

This is an important distinction.

In tech hiring, skills are everything.

The person may have learned to code. They may have worked in the industry, too. But can they really do their work at the level you require? Can they solve complex problems or resolve issues by themselves?

That’s why we focus on verifiable skills - completed projects, code that can be evaluated and reviewed, technical assignments, etc.

Let me further illustrate the difference between traditional hiring and the skills-first approach. In fact, let’s compare the two against the same criteria - candidate evaluation, focus during the hiring process, selection, assessment, sourcing, and even the time it takes to source, qualify, and hire.

| | Traditional Hiring | Skills-based Hiring | | --- | --- | --- | | Evaluation criteria | Education, experience, job history | Specific skills, competencies | | Emphasis | Credentials and past roles | Actual skills and ability to perform them | | Selection process | Resume reviews, interviews, reference checks | Skill assessments, practical tests, work samples | | Assessment tools | Degree certificates, job titles, past job descriptions | Skill tests, coding challenges, project-based evaluations | | Sourcing candidates | Job boards, professional networks, internal promotions | Talent marketplaces, coding bootcamps | | Interview focus | Verification of past experience, educational background | Demonstration of skills, practical problem-solving | | Suitable for entry-level positions | Not really. Selection often based on formal qualifications | Yes. More adaptable to a wide range of candidates | | Potential for bias. | Yes. Potential for bias based on education and background | No. Can reduce bias by focusing on abilities | | Time to hire | Generally longer due to extensive background checks | Potentially shorter with efficient skill assessments |

It’s incredible how different the two approaches are, isn’t it?

But let’s take this even further.

Why skills-based hiring delivers better candidates

To answer this fully, we must first look at what’s wrong with the traditional hiring approach.

As the table above shows, the traditional approach focuses on evaluating candidates based on education, credentials, and experience.

This means that using the traditional method you:

You find fewer candidates

It makes sense. If the only criteria for employment are education or past experience, then the only people who’d qualify would be:

• The lucky few who had access to costly education opportunities.
• People who have had the chance to gain practical experience with other employers and
• Those who are currently willing to switch jobs for you.

You face greater difficulty in identifying top talent, too

That’s also because you can only use vanity criteria to evaluate and assess candidates.

Because let’s face it; education and experience might prove challenging when you’re trying to determine:

• The person’s attitude and willingness to work
• Their actual technical and coding skills
• Their imagination, creativity, communication, problem-solving skills, and more.

The result? More and more companies are struggling to find great tech talent, especially at the entry-level.

But if you take the above into consideration, the situation comes as no surprise.

It’s also no surprise that 62% of employers admit they must overhaul their existing hiring process to overcome challenges with finding tech talent.

Let’s compare that with the skills-based option

In skills-based hiring, you forgo education and self-reported claims in lieu of factors that outline the person’s real abilities:

• Past projects
• Actual, verifiable coding skills
• Coding assessments, and more.

As a result, evaluating candidates and finding the best fit becomes less problematic.

But there is another major benefit.

With skills-based hiring, you tap into a much larger pool of highly skilled and motivated entry-level developers

Since, in this hiring model, you focus more on candidates’ abilities rather than education or years of experience, you automatically broaden the available talent pool.

According to various data, focusing on skills vs. experience can lead to a 2.3x increase in the eligible talent pool.

Skills-based hiring improves the quality of your hires

I’m not surprised by this at all - According to this report, companies using skills-based assessments report a 36% higher satisfaction rate with their hires compared to those relying on traditional methods.

But once again, it makes sense. Since you’re evaluating candidates based on actual skills rather than self-reported claims, you’re far less likely to choose poorly.

Which brings me to this…

Skills-based hiring also reduces the risk of making a bad hire

According to TestGorilla, 88% of companies that have adopted skills-based hiring have seen a reduction in their mis-hire rates.

What’s more, companies using pre-employment skills assessments report a 39% lower turnover rate.

Finally, hiring on skills is also cheaper

After all, structured interviews and skills assessments ensure that candidates are well-suited for their roles from the start. As a result, you avoid high costs associated with mis-hires, which can range between 5 and 27 times the employee's annual salary!

How skills-based hiring works in tech

The process will, naturally, differ from recruiter to recruiter and whether you are using a tech hiring platform like Frontend Mentor Hiring.

But in general, the process of hiring developers in a skills-based approach follows certain steps and principles:

Candidates are selected based on actual projects and demonstrated skills.

Their abilities can be further researched through problem-solving skills, and other relevant technical competencies and practical tasks.

Some of the strategies used by recruiters to evaluate candidates’ skills include:

• Coding challenges: With these, you give candidates specific coding problems to solve and use the results to assess their skills and logical thinking.
• Live coding interviews: These interviews involve candidates coding in real-time, allowing recruiters and your tech teams to observe how they work, how they solve problems, and how likely they are to fit into the team.
• Project-based tests: Finally, in this strategy, you ask candidates to work on a project similar to what they would encounter on the job, providing insight into their ability to handle real-world tasks.

But there is another option, too - Using skills-first hiring platforms like Frontend Mentor Hiring.

Introducing Frontend Mentor Hiring, a skills-first tech hiring platform for companies and agencies

Frontend Mentor Hiring is a tech hiring platform behind a passionate community of thousands of talented and ready-to-hire developers.

(Candidate search capabilities in Frontend Mentor Hiring)

Unlike other tech hiring solutions, Frontend Mentor Hiring doesn’t just facilitate the hiring process.

When you use our platform, you tap into our 850,000-strong Frontend Mentor community of passionate developers to:

• Find the best candidates based on your specific requirements and their experience, skills, location, and more.
• Create a shortlist of top candidates.
• Evaluate their actual, real-life projects and assess their skills.
• Connect with ideal candidates, and finally,
• Hire your next dev.

No scouting the web, LinkedIn, or posting job ads and dreading the thousands of applications you’ll have to sift through.

No more wasting time figuring out the candidate’s skills based on their self-reported claims either. And no more costly hiring mistakes.

Just great tech talent whenever you need them.

Struggling to hire new developers? Want to embrace skills-first hiring? Sign up for a Frontend Mentor Hiring free trial and see for yourself how quickly the platform will connect you with top talent.