Bill & Melinda Gates Foundation

Solving the Hiring Disconnect: Focus on Skills

August 02, 2013

We first met Alexandra when she graduated from high school in Santa Fe, New Mexico, in 2012. Raised by a single mother who speaks little English, Alexandra was determined to fulfill her dream of becoming a doctor. In her senior year, she participated in a program sponsored by CHRISTUS St. Vincent's Hospital and New Options Project partner Innovate+Educate that helps young adults in New Mexico to enter the healthcare sector. The program required Alexandra to take a skills-based assessment, or a test that measures her work-ready skills. As a result of taking the assessment, she was able to get a job working for St. Vincent’s as a medical assistant while she attends community college.

Next fall, she will enroll at the University of New Mexico and become the first person in her family to attend a four-year college.

 Skills-based hiring is five times more predictive of success on the job than hiring by degree alone.

Had the hospital not valued Alexandra’s skills—and had Alexandra not been able to prove that she had them—it’s likely that she would have been overlooked as a qualified job candidate.

Fortunately, there is growing excitement for skills-based hiring. It is increasingly seen as a more reliable alternative to traditional hiring practices that focus on a candidate’s degree, resume and experience to predict his or her potential to succeed on the job. More than a welcome expansion of the applicant pool, this new approach addresses a widespread disconnect in the hiring landscape: Despite the high unemployment rate, many employers still struggle to fill open positions—more than 3 million jobs across the U.S. go unfulfilled. Employers simply can’t find enough candidates with the necessary skills for the job. Many others find the employees they’ve hired are unable to do the work for the position. 

That’s why the New Options Project and our partner Innovate+Educate are working to change the way employers think about talent. In particular, we view out-of-school, job-seeking young adults who are typically overlooked by traditional hiring methods as economic assets, not social liabilities. Some of the leading voices in education and business—including Bill Gates, the Aspen Institute, The National Skills Coalition and the White House— agree with this view, and have implemented similar programs bolstering skill-building and skills-based hiring.

The results speak for themselves. Research by Innovate+Educate shows that employers who have incorporated skills-based hiring into their practices have seen a 25-75% reduction in turnover, 50-70% reduction in time to hire, 70% reduction in cost-to-hire and a 50% reduction in time to train.  In short, skills-based hiring is five times more predictive of success on the job than hiring by degree alone. A win-win for youth and employers!

Ultimately, our hope is that this method will help to level the playing field and give everyone a shot at having a fulfilling career regardless of past education or work experience.

Innovate+Educate’s strategy has been to work directly with communities and regions to develop a skills-based credentialing system for youth and employers, which allows for greater transparency for both the employer and the candidate. Innovate+Educate also trains HR staff to advertise job openings by skill score and match applicants’ submitted scores to available positions. And for applicants who don’t score as high as they’d like, Innovate+Educate works with local partners to offer Skill Up Centers.  In the coming weeks, the City of Albuquerque will formally launch Talent Albuquerque, its partnership with Innovate+Educate, to implement skills-based hiring, including free skills assessments for job-seekers.

Have you had experience with skills training programs or skills-based hiring?  Tell us about it over Twitter @NewOptions4Work.

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