Key Takeaways

  • A key challenge in skills-first hiring, also known as skills-based hiring, is determining the true skills needed for a role and reviewing job applications for a match – but generative AI has the potential to make that possible at scale. 
  • Generative AI may give recruiters and hiring managers new tools for being proactive in the hiring process and expanding and diversifying their talent pools. 
  • Although generative AI has the potential to help employers make fairer, more efficient and more effective decisions, 'human' is still, and will always be, at the heart of hiring. 

"What’s exciting about skills-first hiring is that it has the potential to solve core employer challenges and open up new opportunities for job seekers who are too often screened out despite having the skills to do the job," says Liz Voigt, Senior Manager of Social Impact at Indeed. "When you look at the challenges that employers are facing – not finding quality talent, hiring taking too long, troubles with retention, difficulty diversifying their workforce – skills-based hiring can help them address those challenges today and in the future." 

Skills-first hiring focuses on sourcing and evaluating candidates based on skills rather than proxy requirements like degrees, prior positions and years of industry experience. The term 'skills-first' also acknowledges that in some industries a formal education and certifications are required. There's good reason to adopt a skills-first strategy: Hiring managers who practise skills-first hiring find it twice as easy to find qualified candidates than hiring managers who do not.

While many employers are open to the philosophical shift to skills-first hiring, it can be challenging to execute at scale – largely because it's difficult to identify the skills required for the job, glean applicants' skill sets from their resumes and assess those skills. But the advancement of generative AI has the potential to change that. "AI gives us the opportunity to analyse both job descriptions and resumes to find out what key skills are needed to succeed," says Hannah Calhoon, Vice President of Product at Indeed. 

Use AI to uncover skills-based matches  

Generative AI is able to digest, organise and formulate conclusions from large amounts of unstructured data. In the past, applicants would have to include the exact language used in a job description to be recognised as a potential match. Now, if a job seeker describes their skills well in a qualitative way, generative AI has the potential to understand what capabilities are being described and translate them into whatever taxonomy the employer is looking for. For example, an applicant might note their background working the register at a café while an employer is looking for 'retail point-of-sale' experience.

"That’s promising for job seekers without as much practice describing their work experience and skills in very particular corporate language," Calhoon says.

Take a proactive approach to responsible AI and mitigating bias

AI has the potential to make the entire labour market more equitable and effective — but bias remains a risk. "Intention matters, and AI is amplified intention," Auguste says. "If you’re trying to find the best fit based on skills, regardless of how those skills were acquired, AI will help you do that better." 

To use AI effectively for skills-first hiring, talent professionals need to understand how models have been developed and trained, and audit and monitor those models for bias. "As folks are thinking about integrating AI tools into their hiring processes, it’s important that the technology isn’t perpetuating those same things that make it hard for job seekers in the first place," Calhoon advises.

Use a skills-first approach to reimagine hiring and upskilling

Models become more capable of identifying skills as they are fed more data and given more feedback about what constitutes a quality match. That in turn gives employers the opportunity to take a proactive approach to hiring. 

Rather than posting a job and waiting for applicants to respond, employers can search the millions of profiles on Indeed for a specific set of job criteria based on information collected from the job seeker. Indeed’s Smart Sourcing generative AI provides an explanation of the candidate’s potential overlapping qualifications with the employer’s job description. This helps hiring managers sift through candidate resumes more efficiently. 

A skills-first strategy doesn’t stop with hiring. It’s also important for upskilling, which is increasingly critical in a rapidly changing labour market. According to the World Economic Forum’s Future of Jobs Report, 50% of workers will need to learn new skills by 2025. Organisations with a skills-first hiring strategy will have a better view of employees' capabilities and how they can be adapted, augmented and transferred. And they'll have a mindset and culture that supports employees' potential to learn and grow as the economy and the labour market change over time. 

"Skills-first hiring that’s fully implemented – from dropping degree requirements all the way through skills-based evaluation and upskilling on the job – can translate into significant cost savings," Voigt says. "It makes sense, it’s better for business and when it’s done right with efforts to remove other biases from the hiring process, it can be more equitable."  

Keep hiring human

Nobody wants to be hired by a computer. They want to be hired by a human who is part of a company with a culture, purpose and mission. As crucial as AI will be to skills-first hiring, talent acquisition and management always start and end with humans. 

"What AI allows us to do is to help recruiters and talent professionals take a broader view of what a high-quality candidate looks like," Calhoon says, "and to do that in a really data-driven way, so that it doesn’t feel like a risk to consider candidates they might not have considered before." 

*AI features are not available in certain markets.