What’s in a resume? Understanding the difference between skills Vs. experience-based hiring

Hiring a candidate used to be straightforward. You would look at their resume, ensure they have the right degrees, check how many years they’ve been in their field, then have an interview outlining all of the above. 

This type of experience-based hiring worked well in a traditional recruiting strategy, and still has an important role in Direct Sourcing. 

And yet, as many organizations continue building contingent worker programs amid a concerning skills shortage, a new type of hiring strategy is gaining momentum – skills-based hiring. 

We look at the difference between experience and skills-based strategies and which work best for your organization. 

Exploring both hiring strategies

Experience-based hiring

This strategy bases hiring decisions on a candidate’s tenure and education. Curators rely on resumes and job history to find a good fit. Often, companies using this strategy expect workers to have a number of years of experience in their industry and value proven expertise.  

Skills-based hiring

This technique values skills and competencies over years of experience and degrees. Rather than a traditional interview based on their resume, candidates undergoing a skills-oriented interview would take assessments based on the exact skills needed in a role. Curators are starting to use this type of hiring for contingent workers, who are less likely to have followed a traditional career path and are often expected to jump into a position with minimal onboarding.

The evolution from experience-based to skill-based hiring

As the originators of Direct Sourcing, TalentNet identified skill-based hiring as a top trend to watch for in the next few years. Forbes agrees, marking skills-based hiring as the next big strategy in the hiring world. While experienced-based hiring is still widely used, many companies started to base their talent acquisition decisions on skill-based assessments as a result of a significant skill gap crisis. 

According to McKinsey Global Institute’s recent survey, 87% of companies said they’re currently facing skill gaps or are expecting to face them in the next five years. This is partly due to the rise of AI technology, which has created jobs and skill sets that didn’t exist 10 years ago.  

Skill-based hiring Vs. Experience-based hiring: How they compare

Hiring is an intricate process with a variety of variables. Relying completely on one strategy is risky, leading to missed opportunities as the talent acquisition sphere continues to evolve. 

While experience-based is certainly more widely used, companies making skills-based decisions are seeing clear benefits, including:

• Better performance. An ADP report showed that companies using a skills-based approach saw 90% fewer hiring mistakes and 94% of companies reported that skill-based hires outperformed experience-based ones. 
• More versatility and agility. Hiring based on skills over experience allows hiring leaders to shift strategies quickly as their organization develops. 
• Talent Pool expansion. This type of approach works well with Direct Sourcing, as it helps curators create hiring pipelines for future growth.
• The elimination of subconscious bias. Hiring based on degrees and job history can make it difficult for candidates from non-traditional backgrounds to get noticed. By eliminating these barriers and focusing only on competency, hiring leaders can expand their search and find qualified workers who wouldn’t otherwise be considered.

Still, an experienced-based method focused on job history and education has an important place in Direct Sourcing. Benefits include:

• A proven track record. Candidates with extensive job experience in a certain industry are  likely to thrive in similar roles, reducing the risk of poor performance. 
• Industry knowledge. While skillsets are important, some roles require industry-specific expertise that’s only gained through years of hands-on experience.
• Cultural fit. By reviewing a candidate’s work history, curators can better understand if they align with a company’s core values and team dynamics. 

When should you use each strategy?

While skill-based hiring is gaining momentum in the talent acquisition sphere, both methods have a place in Direct Sourcing. 

When hiring for strategic positions, leadership roles, or specialized fields, an experience-based method gives curators the information they need to make an informed decision. 

For example, let’s say an industrial automation company is developing a new control system for smart factories and needs to hire a director of hardware engineering to lead this initiative. Skills-based assessments wouldn’t be enough to capture the depth of a candidate’s leadership experience and industry knowledge. Instead, the company would rely on job history, educational experience, and the candidate’s track record as a leader in the field. 

Alternatively, some roles require niche skill sets to succeed. Let’s say a SaaS startup is looking to hire a software engineer with specific coding expertise. They may choose a candidate who acquired the skills through coding bootcamps instead of a CS degree. 

Navigating a complicated hiring sphere

Hiring has changed. 

While resumes and degrees used to be the only way to get to know a candidate, companies are starting to value skills-based assessments over traditional curation techniques. Still, experience-based methods have an important place in talent acquisition, especially for strategic and leadership roles. When choosing a Direct Sourcing partner, it’s important they have the experience to lead you through these strategies and understand when to use which method.

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