Skills-first hiring has CIOs rethinking talent strategies

Jason Snyder faces the same challenge nearly all CIOs encounter when looking to fill open positions: a tight labor market, where fierce competition for workers has meant months-long vacancies.

Snyder, secretary of the Executive Office of Technology Services and Security and Commonwealth CIO for Massachusetts, responded by overhauling the agency’s recruitment and retention practices.

Those changes include the decision to emphasize skills instead of job histories and college degrees when hiring.

“We thought this would broaden our talent pool, increase diversity, and reduce biases in hiring,” Snyder says.

That decision put the state’s IT department ahead of the curve when, in January 2024, Massachusetts Gov. Maura Healey issued an executive order directing state agencies to institute skills-based hiring.

Skills-first (or skilled-based) hiring is mostly self-explanatory: It is an approach to hiring that focuses on finding candidates with the skills needed by the organization.

Its use is on the upswing.

According to the 2023 LinkedIn report Skills-First: Reimagining the Labor Market and Breaking Down Barriers, more than 45% of hirers on LinkedIn explicitly used skills data to fill roles, up 12% year over year. Moreover, 19% of job postings in the US no longer required degrees, up from 15% in 2021.

And LinkedIn’s The Future of Recruiting 2024report found that 73% of hiring pros are prioritizing “skills-based hiring and upskilling to help widen their talent pools and find qualified workers.”

Figures on whether and how many CIOs are prioritizing or implementing this approach are seemingly nonexistent, but sources indicate that IT executives have mixed responses to the idea. Some researchers and tech leaders are using the strategy. Others IT execs express reservations.

The two sides do agree, though, that the snappy name can obscure the hard work and complex processes that enable skills-first hiring to succeed.

“When we look at what a skills-based organization is, which is eliminating job [titles] and looking at the skills needed, it is really great. In practice, I think leaders are too afraid to take that risk; it’s a change, and we’re inundated with change, and this is one more change they’re not willing to take on,” says Brittany Lutes, a research analyst at Info-Tech Research Group.

Today’s take on hiring for skills

Hiring candidates for the skills they possess is not new; indeed, many professions, particularly in the trades, have a long history of hiring workers primarily, if not exclusively, because they have the specific skills required.

Nor does today’s interest in skills-first hiring imply that human resources and departmental hiring managers discount skills when evaluating candidates as part of traditional recruitment and hiring practices.

Yet Lutes and other experts say the skills-first hiring strategy does differ from traditional organizational labor practices. The strategy moves away, to varying degrees, from using job titles. It often eliminates college degree and certification requirements. And it calls for identifying an organization’s future skills needs and detailing candidates’ plans for obtaining those skills.

“It is a whole new way in which to attract, recruit, onboard, develop, and manage. It goes through the whole lifecycle of the employee, so it requires a good vision of where the organization is going,” Lutes says. “With skills-based hiring, we break down the activities and the tasks and the competencies we want to lean into what will support the organization. So as an organization, you don’t lean into job titles or education.”

Lutes says adoption of the skills-first approach is low, citing research from The Burning Glass Institute and Harvard Business School Project on Managing the Future of Work showing that less than 1 in 700 hires are filled by skills.

But there is growing interest, as reports indicate.

Lutes says CIOs are particularly interested because of the continuing shortage of workers in the IT profession; they view skills-first hiring as a possibly more effective way to fill the talent gaps they have in their departments.

Work required

CIOs have a lot of work to do if they want to implement a skills-first hiring strategy, Lutes says. They first need to identify the gaps they have, then list what skills they need today, and next determine which skills they will need in the future.

“And CIOs have to look at their workforce and how they structure their organizations,” she adds. “Do they even have job descriptions, or just job roles?”

Lutes says CIOs often struggle to articulate what exact skills they need, explaining that they may do well listing technical skills but falter on so-called business-oriented skills and soft skills.

CIOs also can be overly specific, she adds. They may, for example, say they need someone skilled in SAP software rather than recognizing that they need someone with ERP-related skills who is skilled at engaging with vendors, too. Such distinctions matter when taking a skills-first approach to hiring.

All this prep work can overwhelm CIOs. “We find that CIOs say, ‘I don’t know if I really want to take this on and whether it will help me,’” Lutes says.

Implementing a skills-first hiring strategy

Snyder took on those tasks when he became the EOTSS secretary and Commonwealth CIO in January 2023.

He and his leadership team, working with HR, redefined IT roles — a move that enables him to more readily identify the skills required for each position.

They also eliminated minimum education requirements from all job descriptions. “We don’t want the lack of education credentials to be the reason we don’t hire somebody, which in the past would be,” Snyder says.

And they articulated job pathways and training plans, so they can approach recruitment, retention, and job culture holistically. Snyder says under this approach he and his team are hiring qualified candidates and then sending them for additional training, enrolling them in apprenticeship programs, and/or pairing them with coaches and mentors.

He says the skills-first hiring approach enables him to fill positions within two to three months and upskill new hires within a few months. That process may take four to six months, but it’s still quicker than the year or so it often took to fill vacancies in the past. Additionally, this approach has cut the backlog of open positions by about 20% in the past six months.

Furthermore, Snyder believes this strategy will help diversifying his tech team, attracting more candidates making mid-career job changes as well as more female candidates, more veterans, and more workers of diverse ethnic backgrounds.

Others also have found success with skills-first hiring.

Sal Cucchiara, CIO of wealth and investment management technology at Morgan Stanley, works with Year Up and YUPRO Placement to hire candidates using a skills-based approach. Year Up is a nonprofit organization offering skills-based training to young adults; YUPRO Placement helps place Year Up participants in jobs.

“We’re working with [these] organizations, who identify the individuals and partner with us on the foundational training. After that, we build on top of this experience with technical skills and business training,” Cucchiara says. “[For example, for] a developer role, we might give an apprentice skills training in UI development, Java development, and database development, in addition to business knowledge such as client and account onboarding.”

This approach has helped him fill roles despite the IT talent shortage, Cucchiara says, noting that the company has had strong retention rates with the talent hired through this strategy. Moreover, skills-first hiring has increased the diversity of candidates and, thus, the tech team overall.

Although Cucchiara recognizes the benefits of a skills-first strategy, he does not rely on it exclusively. “The majority of our roles are highly technical and as such do currently require college degrees or relevant experience,” he says.

Other CIOs are also cautious about going all in with skills-first hiring.

Sharon Mandell, senior vice president and CIO of Juniper Networks, is one of them.

“Hiring in IT is kind of like solving a multivariant equation: You can’t optimize on any one thing. For someone to last in my organization, there are so many things I need to look at,” she says.

Mandell says she considers candidates’ education, experience, and traits as well as skills when hiring, ensuring that she can create a team that performs well today and can learn, grow, and adapt with changes. She wants workers who can collaborate and work with others.

“If I get a jerk just because he knows AI, that would probably slow down my team,” she adds.

Mandell says she generally hires someone on a contract basis if she needs a specific skill.

Expanding the talent pool

Proponents of skills-first hiring acknowledge that some positions should still require college degrees or a certain number of years’ experience. They agree that hiring managers should consider certain traits, such as candidate’s ability to work collaboratively.

Yet they also say more CIOs should adopt skills-first hiring as an effective way to close the talent gaps so many are experiencing.

Year Up, for example, works with organizations to understand exactly what skills they need so that Year Up can train participants in those areas.

“We get at the heart and soul of what they really need,” says John Galante, managing director of Year Up and a former JP Morgan Chase & Co. CIO.

To ensure those candidates can succeed and grow, Year Up places them with organizations in internships first, and it encourages candidates to pursue ongoing training and education.

Some 70% of Year Up trainees who enter IT internships with a company become full-time staffers, according to Galante.

Given the challenges that CIOs have in recruiting and retaining, and the success of Year Up candidates in landing jobs and staying with employers, YUPRO Placement CEO Michelle Sims says more CIOs may have no choice but to adopt a skills-first hiring strategy.

“It’s absolutely vital for companies to expand their talent pool,” she says.