How skills-focused hiring could change the shape of the labour market

As the UK pushes to improve a slow economy, many are looking to AI and upskilling for the solution. In sectors from accommodation to technology, employers face labour shortages and surveys suggest many plan to invest in AI tools to fill the gaps.

New LinkedIn data from the Economic Graph research team indicates there is another potential way of expanding the labour market – and it relates to how we hire.

According to the data, skills-based hiring – where employers look at the skills people have, rather than the job titles they've had – could broaden the talent pool in the UK by more than eight times. It could expand the talent pipeline in areas currently experiencing shortages and open opportunities to a larger swathe of the workforce, including women, those on less traditional educational paths and workers of different ages.

Broadening the tech talent pool

In the technology sector, for instance, the research highlights significant opportunities to expand the talent pipeline and diversify the workforce, especially in the field of artificial intelligence. Skills-based hiring could increase the pool of women available to work in AI by 12.6 times and of men by 11 times. There would be similar opportunities for people across the age spectrum, where skills-focused hiring could expand the talent pool for everyone from baby boomers to gen Z, with the latter having the potential to see the biggest increase.

Artificial intelligence is an area of huge investment globally. In the UK, figures from HSBC and Dealroom found AI startups had a record breaking 2024. Additionally, the government aims to encourage growth in the sector, with firms including Kyndryl and Mistral announcing plans to create AI jobs in the UK.

Women need to play a role in the development of this technology, says Dr Julia Stamm , founder and chief executive of She Shapes AI. "We are talking about a technology that has far-ranging consequences."

As with many areas in tech, the AI field is currently male-dominated, with the Alan Turing Institute suggesting women make up around 22% of the workforce. But with the growing focus on AI, opening up opportunities will be crucial in future-proofing the workforce. According to LinkedIn's data, hiring based on existing skills could result in an 8% increase in women's representation in the AI field in the UK, while across the broader technology sector, it would increase by 3%, bringing female representation in tech up to around 40%.

Future-proofing the workforce, building AI skills

Stamm says women are in even more of a minority in leadership of AI firms, resulting in very "tech-centric future visions of AI, and what we want to use this technology for".

"Often women think 'I need to be a software engineer' [to work in AI], but that's not the case – it's actually OK not to have a technical background. Of course we need people with that, but we also need lived experience, an understanding of context and ethics, for instance. All of this is something that you can also bring in when you've been working in other fields, like in the humanitarian sectors, for instance, or in marketing," Stamm says.

The perception is something she is trying to tackle through her She Shapes AI awards, which highlight innovative women building AI businesses and solutions. Winners this year include Diana Gutierrez for her AI tools that quantify the tech's environmental impact, Anna Mae Yu Lamentillo for her work on using AI to preserve endangered languages and Dr. Elizabeth M. Adams , founder of a responsible AI governance advisory firm.

Stamm highlights that it's often predominantly women who work in sectors such as health or education, or community-facing roles. "Women who have a very good understanding of the challenges are saying, 'What are the problems on the ground?' and deploying AI solutions."

Access to tools and increased confidence are needed to empower women, Stamm says, whether provided via schools, workplaces, or learning groups like Mia AI . "People might say, 'I'm too old, I can't learn any more', or 'I'm not perfect' – I think we need to find ways to tackle those barriers, encouraging testing things out and saying, 'it's OK, everyone is learning right now'."

Where skills-first hiring opens opportunities

In this sense, the skills employers are often looking for are already out there, but perhaps come from different paths. LinkedIn's data shows that for many roles in tech, the workforce would become more diverse with skills-based hiring – for instance, for a head of IT infrastructure, where women make up under 10% of the workforce, representation of women could increase by more than 900%. Even where women make up a broader proportion of the current workforce, for instance in the role of artificial intelligence specialist, representation would increase by 17% with skills-focused hiring.

However skills-based hiring doesn't just open up roles to women; across the broader spectrum of tech, there are roles that would be more accessible to both men and women under a skills-based hiring model, including roles in IT sales and operations, demonstrating the value in transferable skills across the board.

This is particularly relevant to other areas struggling with labour shortages, which are also a focus in the UK's push for economic growth – including construction. Labour shortages have impacted the construction sector in the past few years, particularly in the wake of the pandemic. The sector also faces challenges with an ageing workforce, with the number of construction employees above the age of 60 increasing more than any other age group, according to the Chartered Institute of Building.

Expanding the construction workforce

According to LinkedIn's data, construction is one of the sectors that could benefit the most from skills-based hiring, increasing the talent pool by more than eight times. For women, the increase would be even more – hiring based on the skills women have rather than their previous titles would increase the talent pool in the sector by 9.4 times (compared with 8.4 times for men). Younger workers would also see more opportunity in the sector, with the proportion of gen Z workers suitable to work in the field increasing by 9.7 times.

Several construction industry roles would see a huge increase in the talent pipeline with skills-based hiring, with the position of construction project manager having the potential for the largest growth in the talent pipeline, growing more than 300 times among women and 110 times among men.

The research suggests that skills-first hiring could bring in more women in many other sectors where they are underrepresented, including oil and gas and financial services – but that it could also open up opportunities across the board for people with the right skills, if employers are prepared to look for them.

Should employers put more focus on skills than work history when hiring? How can people showcase their skills more effectively when looking for a new role?

Share your thoughts in a comment or post from your profile using #IWD25.

Reporting: Siobhan Morrin

Data: Silvia Lara , LinkedIn's Economic Graph

Graphics: Arunagiri Ramadurai

Methodology

We define the impact of skills-based hiring by comparing two hiring approaches: one based on prior job titles and another based on skills. Using LinkedIn’s Skills Genome, we identify occupations with at least 50% skill overlap and a minimum number of transitions into the target role. We then calculate the ratio of candidates identified through a skills-based approach versus a title-based approach, taking the median across jobs, countries, and industries, and comparing the proportion of women in the two talent pools.