Skills to Pay the Bills: Why Skills Matter More Than Credentials When Hiring

Article by Charles Coy, written for HR Insights 

Pundits point to a dearth of skills in today’s workforce. But there’s another budding school of thought: recruiters are looking at the wrong qualifications when assessing job candidates. The classic resume—replete with GPAs and college credentials—is a thing of the past, some talent managers argue. Instead, recruiters must focus on the actual skills that candidates offer.

Skills-Based Hiring In Action

Consider Google. Its recruiters used to ask candidates for transcripts, GPAs, and test scores before concluding that they were, in the words of the company’s senior vice president of people operations, Laszlo Bock, “worthless” for hiring purposes. Google has moved away from that approach: on some Google teams now, 14% of the members have never attended college. Today, Google evaluates candidates using behavioral interviewing, which sees past behavior as a leading indicator of future behavior. A candidate’s experience leading projects or introducing a better work process are valued above brute intelligence or credentials.

Other companies are recognizing the value of this approach. For example, the cofounder and CEO of Zapier, Wade Foster, recently wrote in a LinkedIn post that “a list of credentials shows how well a person can maneuver through a bureaucratic system, but it’s a poor predictor of success.”

How One Program Is Rethinking Skills-Based Hiring

While President Obama wants to close the skills gap by revamping job training programs, the private sector is taking a different approach. The Gates Foundation, for example, is partnering with Innovate + Educate to promote “skills-based hiring,” particularly among young adults. In this model, employers develop a skills-based credential system defined by what they’re looking for, and candidates take tests to measure those skills. Job seekers who score low can then get training from local partners to improve those skills.

One such endeavor, the New Options Project, has already enjoyed great success with this approach. Candidates find jobs that allow them to apply their skill sets, and employers spend 50% less time training new employees—who in turn are up to 75% less likely to quit. Bill Gates, famous for not graduating from college before cofounding Microsoft, explained in an April 2013 Fast Company interview that the idea behind this approach is to develop “a skills-based credential that is well trusted and well understood enough that employers view it as a true alternative to a degree.” The skills gap is a big problem—one that federal lawmakers and employers alike are eager to close. Despite a 6.7% unemployment rate nationwide, the Aspen Institute recently reported that more than three million U.S. jobs remain unfilled. How is this possible?

As New Options Project director Angela Cobb wrote on the blog for the Bill and Melinda Gates Foundation, the result is “a win-win for youth and employers!”

Three Fields In Which Skills And Degrees Are Battling It Out

  • Business: MBAs and their non-degreed peers have long argued about the value of a graduate degree in business. Proponents of the MBA say it’s a requisite for any aspiring business leader and a virtual guarantee of a great job with a high salary. Critics counter that business school is a waste of money and doesn’t give aspiring business professionals the specialized knowledge they need to succeed. Mariana Zanetti, author of The MBA Bubble, suggests that wannabe MBAs need only apply to the top schools, decline any acceptances, and then include the acceptances on their resumes. They’d garner the same prestige as if they’d actually attended an MBA program, she asserts.
  • Cybersecurity: A credential as a certified information systems security professional may help someone get pats on the back in the digital security field, but it’s not a ticket to a job, says Philip Reitinger, chief information security officer for Sony Corporation. A candidate’s technical skills and reputation matter more, he says. In a recent interview published in the FierceGovernmentIT newsletter, he explained, “If they know their way around a kernel, and they can tell me about buffer overruns and different ways to attach and they’ve got the skills to get the job done, they’ve got a job.”
  • STEM: Science, technology, engineering, and mathematics degrees are often seen as brass rings leading to a bright future of high employment and early retirement. But the statistics suggest otherwise: only 43% of employees in a so-called STEM field have STEM degrees, according to the Commerce Department report. “The large majority of STEM workers who lack a bachelor’s degree in STEM actually lack a bachelor’s degree in any subject,” wrote Change the Equation CEO Linda Rosen in a Huffington Post story about the report. (Cue Bill Gates.)

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