Skills-based hiring ?? talent retention

Retention is currently top of mind for most employers, and the last few years have seen some of the worst turnover rates in decades.

So, what’s going wrong????

Maybe you’re hiring people who were a flight risk to begin with. Perhaps you’re trying to fix problems when it’s already too late. Or maybe you’re using outdated retention strategies that don’t work anymore.?

Our theory is this: your retention strategy should start with the way that you hire.

The consequences of losing talent ??

We spoke to HR expert Yashna Wahal about why high turnover rates are so damaging for businesses these days. She shared that:

And she’s right. When you lose experienced team members, there’s usually a gap before you find a replacement and get them up to speed. This gap can slow operations, affect service quality, and delay project deadlines.?

This is bad for business. What’s more, when your team is already at capacity, asking them to do more can lead to frustration, resentment, and burnout.

That's why solving the retention problem is crucial for your company culture, too.

3 reasons skills-based hiring improves retention??

Deloitte recently surveyed 225 business and HR executives from around the world, and the results showed that skills-based companies were twice as likely to retain top performers than others.

Our own research showed that 89% of employers improve their retention rates when they switch to skills-based hiring.?

But why exactly is skills-based hiring so good for talent retention? ??

1?? Skills-based hiring is predictive of job success

When employees are selected based on the skills needed for a job, there’s a good chance they’ll perform well in their role. In fact, 89% of employers agree that skills-based hiring predicts job success.

This sense of competence and fulfillment can increase job satisfaction, which is closely linked to employee retention.?

A first-hand example of this comes from Jessica R., Operations Manager at Harbor Yachts, who shared her experience of how skills-based hiring helped improve retention:

2?? - Candidates get a realistic job preview

Skills-based hiring gives applicants a glimpse of what’s expected of them in a new role – so there aren’t surprises when they join.?

Putting candidates through tests, case study exercises, or simulations helps them learn more about the skills they need for the job. Candidates who don’t find the work enjoyable or stimulating can choose to opt out of the process at this stage – rather than once they’ve joined the company.?

As Nikky Knijf , one of our Product Marketing Managers, summarizes:

“When candidates apply for these roles that use skills-based hiring, they're better informed – they have an idea in their [head] of ‘okay, if I apply for this job, this is what they're looking for. This is what I can expect.’”?

3?? - Fosters diversity and inclusion

Skills-based hiring removes unconscious biases through objective, data-driven decisions. Ignoring credentials, backgrounds, or demographic factors that have nothing to do with performance makes hiring fair and inclusive.

In fact, data from our State of Skills-Based Hiring report shows that 84% of employers that switch to skills-based hiring improve diversity by doing so.

A recent piece in People Management reveals that attractive wages and benefits are no longer guarantees of securing and retaining talent. They explain that for today’s employees, especially the new generation of workers, a diverse workplace significantly improves staff retention.

?? To keep your high performers, start with hiring?

That’s the end of our take on using skills-based hiring to improve employee retention.

??Join the conversation: HR people – we’d love to know what does (and doesn’t!) work for you when it comes to employee retention.

Let us know in the comments.