Skill-Based Hiring Relaxes Job Requirements and Accelerates the Hiring Process

Employers are asking hard questions about the questions they have always asked applicants.

The 2008-2009 recession changed many employers’ hiring practices. At the time, unemployment was high and companies were flooded with overqualified applicants, so employers, given their pick of workers, raised job qualifications. Jobs that were once held by high school graduates now required bachelor degrees along with minimum previous work-experience.

Needless to say, today’s employment scenario is vastly different, with job openings far outnumbering applicants. As such, the outdated hiring practices of the 2008-2009 recession no longer apply in today’s highly competitive labor market

Consider that nearly two-thirds of American adults don’t have bachelor’s degrees but may have the skills to succeed in many well-paying jobs if requirements are relaxed. If employers continue to lower educational requirements at the current rate, 1.4 million jobs will open to people without college degrees in the next five years.

More employers are reconsidering the value of college-degree requirements, focusing instead on skill-based hiring. Some employers are already lowering job requirements in their quest to fill vacant positions. Skill-based hiring is an employment strategy that is gaining momentum. This type of hiring reduces the importance of university degrees as an indicator of skills. Instead, skill-based hiring bases employment decisions on demonstrable abilities.

Evaluating employees and new hires based on their skillsets instead of their work history can help level the playing field. It also makes talent pools more diverse and often makes hiring more effective.

For example, CVS Health hiring process focuses more closely on skills by no longer requiring college students or graduates to submit their grades, and has eliminated requirements for a high-school diploma or the equivalent for most entry-level roles.

Jeff Lackey, a vice president of talent acquisition at CVS, said that the company found that a higher GPA didn’t always mean a better job performance. “So why are we using it?” Mr. Lackey said.

CVS has also been using virtual-job tryouts for customer-facing roles that give applicants a realistic view of the work, and allow hiring managers to assess the aptitude and skills of applicants. “If you can pass the virtual job tryout…then why isn’t that good enough?” Mr. Lackey said. “It is good enough.”

“When you have a labor market like this, it’s not uncommon for employers to start relaxing hiring requirements,” said Jason Tyszko, vice president of the U.S. Chamber of Commerce Foundation’s Center for Education and Workforce. “When the market tightens up, and they can reintroduce some of those additional requirements, that tends to happen.”

In a similar move, in 2019 The Body Shop started a pilot program at a distribution center in North Carolina that removed nearly every hiring requirement. The program got rid of background checks and drug tests, as well as education and work experience. The following year the company took the successful pilot a step further by applying the streamlined hiring process to all seasonal entry-level retail jobs. Last year, the new hiring process became the model used for all of the company’s entry-level retail and warehouse hires. The relaxed hiring practice asks applicants only four questions: if they are legally authorized to work in the US; whether they can lift 25 pounds; if they can work an 8-hour shift; and why they want to work with customers. 

Since the policy change, The Body Shop reports that performance-related terminations of people hired in the pilot program have been about the same as the rate among people hired through the routine screening process.

The success of The Body Shop’s four question hiring process as  been part of the growing trend of City councils and state legislatures ban-the-box laws that eliminate a box to check on job applications for those with a criminal record. The laws are intended to encourage employers to consider an applicant’s qualifications before deciding if past convictions disqualify them.

Other employers in the retail and food industries have been working to prevent potential hires from walking away. Darden Restaurants, which owns Olive Garden, has a tool that allows applicants to apply for a job and schedule an interview within five minutes. And Waste Management retooled its job applications for truck drivers to three minutes to fill out instead of as long as an hour.

Once employers have removed unnecessary barriers to entry, they still need a skills-based way to assess candidates. Ryan Roslansky, the CEO of LinkedIn, encourages employers to find assessments that can measure skills. For example, a coding test to measure hard skills, or an audition like CVS’s virtual-job tryout to measure soft skills.

It is possible that skill-based hiring will result in a more diverse workforce with higher retention rates. According to LinkedIn data, employees without a traditional four-year degree stay at companies 34% longer than those with such a degree.