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How to Implement Skills-Based Hiring: A Step-by-Step Playbook
The résumé was originally made for the factory floor, but we’re still using it to hire in the digital age.
Fewer people today have the traditional background of a four-year degree and a stack of five-year company tenures. Instead, there are standout candidates with online credentials, portfolio careers, and sharp skills they’ve actually worked to build, not just list on paper.
Companies that adopt skills-based hiring know exactly how to spot, attract, and scoop such talent from the labor market.
Our playbook breaks down why skills-based hiring outshines traditional methods, when to make the switch, and how to do it right — with insights from top Human Resources pros who’ve been there and done it:
The tale of two approaches: skills-based hiring VS traditional methods
Skills-based hiring is a talent acquisition approach that evaluates candidates' real-world abilities and competencies instead of using college degrees or educational credentials. It shifts attention from vague characteristics like "experience," "tenure," or "professional background" to quantifiable evaluation criteria like applied skills.
Unfortunately, not all technology designed to improve hiring hits the mark. For example, while popular applicant tracking systems (ATS) have accelerated candidate screening times, they’ve also introduced algorithmic bias.
That’s because traditional ATS tools struggle with nuance, like transferable skills, career pivots, or non-linear paths. They rank résumés based on keywords and penalize submissions based on formatting quirks.
In contrast, recruitment platforms with testing capabilities give all job candidates a fair shot. Skills-based assessments shift the focus from background to ability, letting candidates prove their value through real-world tasks rather than résumé gimmicks. It’s a more inclusive, data-driven approach that helps employers hire based on real performance potential, not assumptions.
“Our early issue was that CVs lie. We had a couple of really bad hires with really awesome CVs. We thought there had to be a better way to do this, and that’s how Toggl Hire came to life.”
— Dajana Berisavljevic