Skill-based hiring: A practical guide for HR teams

The way companies hire is changing, and Small and Medium-sized Businesses (SMBs) cannot ignore it. Across Europe, employers are moving from degree-first to skill-based hiring, a model that prioritises job-relevant skills over formal qualifications. This shift reflects real business needs and supports Gen Z recruiting, where skills and adaptability matter most.

For SMBs, sticking to traditional hiring models creates real risks. Degree requirements narrow talent pools, slow down hiring, and increase the chance of poor matches. As roles evolve faster than education systems, many qualified candidates are filtered out too early. This makes it harder for small teams to stay competitive, especially in fast-changing fields.

Skill-based hiring offers a clear solution. By focusing on competencies, SMBs can hire faster, improve quality of hire, and build teams that adapt to change. In this article, we explain why degrees matter less, what skills-first talent acquisition looks like in practice, and how HR teams can implement skill-based hiring with the right structure and tools.

Why degree-first hiring is becoming less effective

For decades, degrees were used to screen candidates quickly. They signalled competence, commitment, and long-term potential. Today, this signal is no longer reliable for many roles.

Skills change faster than degrees can keep up

Roles in areas like AI, data, and green jobs evolve at speed. By the time a degree programme updates its curriculum, required skills may already look very different.

As a result, employers increasingly find that hands-on experience, portfolios, and practical skills are better indicators of performance than academic credentials. What matters is not what someone studied years ago, but what they can do today.

Degree requirements exclude capable candidates

Degree-first hiring also shrinks the talent pool unnecessarily. Many strong candidates build relevant skills through vocational training, online courses, bootcamps, or on-the-job experience.

For SMBs competing with larger employers, this exclusion is especially costly. Filtering candidates too early limits access to qualified talent, slows hiring, and increases the risk of poor matches. Hiring based on skills keeps the funnel open without lowering standards.

Business outcomes matter more than credentials

Companies are under pressure to deliver results, not just fill roles. According to ADP research, 90% of companies that hire based on skills report fewer hiring mistakes, and 94% find that skills-based hires outperform those hired based on degrees, certifications or years of experience.

These shifts explain why degree-first hiring is losing relevance. Roles change faster, career paths are less linear, and businesses need people who can learn and adapt quickly. Skill-based hiring offers a practical way forward by linking hiring decisions to real job requirements and helping SMBs build teams ready for what comes next, not what worked in the past.

What skill-based hiring really means for SMBs

It means hiring based on current skills, not outdated signals

Skill-based hiring focuses on the competencies required to succeed in a role. Instead of using degrees or years of experience as quick screening signals, SMBs assess practical skills, transferable abilities, and learning potential. The goal is simple: match candidates to real work requirements, not assumptions.

It expands talent pools and improves hiring outcomes

By prioritising skills, SMBs open up wider talent pools and reduce unnecessary filters. This leads to faster hiring, stronger matches, and better retention. When expectations align with day-to-day tasks, new hires are more likely to perform well and stay longer.

It shifts hiring decisions from credentials to performance

Skill-based hiring does not mean ignoring qualifications altogether. Degrees still matter in regulated roles where they are essential. The difference is intent. SMBs decide when a degree is truly required, and when skills and experience are enough to do the job well.

How to build skill-focused job ads that attract the right candidates

Your job ad sets the tone for the entire hiring process. When it leads with degrees or vague requirements, you risk attracting the wrong candidates or discouraging strong ones from applying.

These principles help you write skill-based job ads that attract stronger, more relevant candidates.

Start with outcomes, not credentials

Focus your job ad on what success looks like in the role, not on which qualifications candidates must have.

• Avoid:  “Bachelor’s degree in marketing required.”
• Focus on: “You can plan, execute, and analyse multi-channel campaigns that deliver measurable results.”
  

This approach makes it clear that skills matter more than degrees and helps the right candidates recognise themselves in the role.

Separate essential skills from nice-to-haves

Make it easy for candidates to assess their fit by structuring requirements clearly:

• Must-have skills: Core competencies needed to perform the role from day one.
• Nice-to-have skills: Additional capabilities that support learning and growth over time.
  

Avoid defaulting to years of experience. Time spent in a role does not always reflect the skills needed to succeed.

Write for real candidates, not ideal profiles

Overloaded job ads discourage strong applicants and reduce quality. Clear, realistic ads perform better and attract candidates who are genuinely a good fit.

A strong skill-based job ad usually includes:

• A short, clear role summary
• Responsibilities linked to outcomes
• Skills needed to succeed from day one
• How candidates will be assessed
  

This level of transparency builds trust, sets expectations early, and leads to higher-quality candidates.

The tools HR teams need to implement skill-based hiring

Shifting to skill-based hiring takes more than good intentions. HR teams need clear structure, consistent processes, and tools that support skills-first decisions at every stage of hiring.

Structured role definitions

Before posting a job, take time to align internally on:

• Core responsibilities
• The key skills required to succeed
• How those skills will be assessed during the hiring process
  

This early alignment prevents confusion later on and helps ensure candidates are evaluated fairly and consistently.

Skill-based screening and scorecards

Move away from gut feeling and toward clear, shared criteria. Scorecards help hiring teams assess every candidate against the same set of skills, leading to better decisions and less bias. For SMBs, this structure is especially valuable when several people are involved in the hiring process.

An ATS that supports skills-first hiring

To apply skill-based hiring consistently, HR teams need one central system. A modern Applicant Tracking System (ATS) helps you:

• Create and manage skill-focused job ads
• Screen applications using consistent criteria
• Collaborate easily on candidate feedback
• Track hiring decisions clearly and transparently
  

With JOIN, HR teams can define clear role requirements, collaborate on evaluations, and manage the entire hiring process in one place. This makes skills-first talent acquisition practical, even for teams with limited time and resources.

Skills-first hiring is no longer a future trend. It is already shaping how growing teams hire today. By focusing on outcomes, relevant skills, and structured assessments, SMBs can access wider talent pools, make stronger hiring decisions, and hire with greater confidence. While degrees still matter in some roles, skills are what drive performance, adaptability, and long-term success.