Image Courtesy: Unsplash
Picture this. Joan hires at least one hundred new retail associates per month to staff across two hundred and ninety department stores in her jurisdiction. The problem is that she gets about a thousand applicants for that position every few weeks. To help her work through the resume pile, she relies on a keyword scanning tool built into her ATS that screens candidates based on what their resume says. Joan is worried that with all the AI-generated CVs that her keyword scanning tool is becoming less effective. Moreso, she’s worried that many of the candidates who made it past screening do not make it through the interview process; in fact, only about 30 out of 100 candidates who are interviewed are hired. With holiday hiring ramping up, Joan’s hiring team is overworked and burnt out, while the interview-to-offer ratio continues to suffer.
Anecdotally, Joan’s entire story is common. The rate of frontline candidates making it through the finish line in high-volume hiring, however, is a hard fact.
According to the HiringBranch global database, only 30% of screened candidates actually possess the skills to do the job well. Let’s walk that back once more. That means, after screening, potentially two-thirds of applicants are unqualified, and recruiting teams still have to sort through them.
Going behind the curtain on what this means for recruiters, this post will unpack screening efficiency, bias, and why it’s critical to start measuring skills earlier in the process.
Traditional Screening Methods Fail
Resumes are based on a candidate’s self-described qualifications and qualities, rather than on demonstrated ability. And yet, reliable or not, resumes have traditionally been the hallmark in the first step of the application process for applicants and recruiters alike. Unfortunately, the resume-led application process has become extremely flawed, and it’s costing employers.
Consider that:
- 70% of people have admitted to lying on their resume before
- 1 in 4 background checks have found a discrepancy on a resume
- Nearly 40% of candidates have used AI for their application
- By 2028, 1 in 4 applicants will be a completely fake candidate
Aside from severe security risks posed by fraudulent candidates, the lack of integrity polluting traditional screening methods renders them nearly useless. Yet, 93% of enterprises still rely on an ATS to screen resumes.
Measuring Skills Instead of Scanning Keywords
To overcome the deficiencies that stem from resume-reliant hiring processes, companies are increasingly turning to skills-based hiring, a strategy that favours hard and soft skills over degrees and previous work experience. Applicants all benefit from being measured on their actual skills, rather than human or keyword bias.
Hiring teams are increasingly turning to skills-based hiring for the advantages it provides. For example, research from Harvard, Stanford, and the Carnegie Foundation found that soft skills account for 85% of career success. More recently, this study from Boston Consulting Group revealed that skills-based hires were promoted more often than their degree-hired counterparts for roles like customer service, sales, compliance, and more. Similarly, an HBR study found that employees hired for their skills, instead of a degree, performed better and stayed longer in their position. And as for candidates, well, a report from Unstop found that 9 out of 10 Gen Z want a skills-based hiring assessment from organizations.
One of the strongest arguments for skills-based hiring is that it is a fairer way to evaluate candidates. If an organization is measuring a candidate’s abilities, rather than their degree or experience, the process becomes more inclusive. SHRM elaborates:
“Combining skills-based hiring with tools such as blind evaluations and assessments allows employers to identify qualified candidates more effectively. This approach not only helps expand the talent pool but also ensures a fairer and more objective hiring process by focusing on abilities rather than biases.”
While many organizations have or are planning to shift towards skills-based hiring using blind evaluations like assessments, they could be waiting too late in the hiring process. Meaning, if skills-based hiring isn’t applied from the top of the hiring funnel, bias may have already crept into the candidate selection process.
Unpacking the 30%
As an AI provider for hiring teams to measure soft skills, HiringBranch plugged into its global database of over one million candidate skills assessments. It found that after a traditional screening process was used, only 30% of candidates actually did well on the job according to their employers’ performance KPIs. This stat was revealed in an HR.com webinar earlier this year.
There are two key takeaways for recruiters in that 30%. The first, as previously established, is that traditional screening tools are failing. It is likely that qualified candidates did not make it through the screening process in the organizations included in this study. Intelligent CV estimated that about 75% of CVs are rejected by ATS keyword screening tools.
The other takeaway is around hiring quality. Selecting a high-performing employee who will stay on the job is difficult to begin with. If traditional screening tools can eliminate as many as 75% of applicants, and of those that are left, only 30% can do the job, that means a mere 7% of the total hiring pool is qualified. Hiring teams have to have rock-solid processes and accurate candidate evaluation and assessment technology to have any hope of finding their 7%. For a company that gets 2000 applicants per month, that means selecting just 140 for an interview, which is extremely difficult to do, so instead, bad hires are made.
Looking at traditional hiring processes, as many as 46% of new hires fail on the job within 18 months, according to a study from Leadership IQ. Even more interesting is that nearly 90% of those hiring failures are due to a lack of soft skills, not a lack of technical skills. Clearly, HR hasn’t yet mastered skill-based candidate selection.
Skills-based Screening Solutions
By screening for skills at the top of the hiring funnel, recruiters can identify capable candidates earlier, instead of screening them out unknowingly.
Bell, a global telecommunications provider, recently spoke on The Recruiting Future podcast and explained that evaluating soft skills at the top of their hiring funnel allows them to:
- Give recruiters a pulse on an applicant’s skills from Day 1 instead of after a bad interview
- Bring the candidates with the strongest requirements to the forefront
- Prevent unqualified candidates from making it through the interview
- Make the most of the recruiter’s time, and decrease time-to-hire
Hiring for demonstrated abilities, rather than resume claims, is already paying off in global organizations with faster hires and fewer mis-hires from a larger talent pool. To start screening for skills at the top of the funnel, organizations are encouraged to replace resume filters with scenario-based assessments. Typically, these types of assessments are reserved for lower in the funnel because they’re just too expensive to give to every candidate who applies. Skills screeners are now emerging, creating an accessible solution for the first time at the application stage.
What’s Holding Hiring Teams Back?
If only about 30 percent of candidates possess the needed skills, the business case for improving screening precision is undeniable, so why aren’t more teams turning to skills? The answer is often simply tied to legacy processes.
Nace just released an interesting survey reporting that nearly 70% of employers are prioritizing skills-based hiring, and yet 43% still require a bachelor’s degree for entry-level roles. Apparently, this is most often due to institutional norms. As Forbes points out, a degree requirement means capable individuals will be excluded, shrinking the talent pool even further.
Hiring teams who want to become skills-based need to do so from the top of the funnel to truly embrace the many advantages this method provides.
