Why skills-based hiring is taking over—and how to do it| Insights

Finding top talent is tough right now. Enter skills-based hiring—an approach that puts real skills, capabilities, and culture fit ahead of credentials. Learn what it is, why it works, and how to use it to hire faster, smarter, and more vibrantly.

According to a global 2024 report from Test Gorilla, skills-based hiring is becoming the number one way to recruit—with 81% of companies surveyed using it and Australia leading the way.

94% agree that skills-based hiring predicts job success better than resumes. Plus, 70% of Australian job seekers prefer it, seeing it as their best shot at landing their dream role.

If you’re a hiring manager, this fresh approach to recruitment needs to be part of your process.

But what exactly is skills-based hiring? Why should you care? And how can you put it into practice, from crafting job postings to skill spotting and navigating the road bumps?

What is skills-based hiring?

Skills-based hiring flips the script on traditional hiring practices.

Instead of focusing on educational background, degrees or job titles during talent acquisition, it zeroes in on what a person can actually do and how well they do it.

Employers look for specific skills, abilities and competencies in resumes, including technical skills (hard skills) and soft skills. They may also assess real capabilities through tasks, tests or work samples, making it easier to spot the right fit based on potential and performance.

For candidates, it’s a chance to step up and stand out. For businesses, it’s a smarter, fairer way to hire. It’s also a great way to build teams that are diverse, capable and who add to your culture from day one.

Ultimately, skills-based hiring practices aren’t just a trend. They can help dig out exceptional candidates with fresh perspectives that traditional hiring practices may miss.

Why credentials are losing their grip

Across Australia and here in the Newcastle and Hunter Coast region, the university degree is no longer the golden ticket it once was.

In our key speciality industries, including construction, engineering, manufacturing and tech, employers are shifting focus. Hiring for the relevant skills required, not just formal education qualifications.

With growing demand and a shrinking talent pool (and supposed skills shortages), you need people who can hit the ground running, no matter how they got there.

The rise of alternative learning paths is shaking things up. TAFE courses, online certifications, apprenticeships and hands-on experience are proving just as valuable, and often more relevant, than traditional degrees.

In tech, bootcamp graduates are solving real-world problems. In construction, trade-qualified candidates are stepping into roles with practical confidence.

What matters most now? Job performance. Adaptability. The ability to apply knowledge, not just talk about it. Skills-based hiring isn’t just a reaction to change. It’s a competitive edge.

See also: 6 tech recruiting trends to pay attention to right now.

Rethinking your process for skills-based hiring

Bringing in a skills-based approach means rethinking your internal processes to focus on what really matters in today’s market: real skills and potential.

Here’s how to start realigning your approach to more skills-based practices:

• Rewrite job descriptions to highlight the demonstrated skills required and ditch the jargon and unnecessary qualifications.
• Use practical assessments and work samples to test candidates on what they can actually do.
• Train your hiring managers to evaluate skills and spot culture add, not just higher education credentials.
• Balance skills with culture. It’s not just about ticking boxes but building a team that grows vibrantly together.

You can teach the technical stuff. You can train someone on the systems, show them the ropes, and even upskill them over time. But you can’t train someone to genuinely care and have a personality that fits.

You can’t coach someone into having warmth, integrity, or drive. That’s not found in a course or manual.

Skills-based hiring requires a thoughtful, consultative approach. It’s about finding talent that fits your business and your culture—now and next year. Something we’re experts in here at Verve.

Writing job ads for skills-based recruitment

When it comes to writing job descriptions, focus on what really matters: the right skills.

Separate essential technical skills from nice-to-haves, and don’t forget soft skills like teamwork, emotional intelligence and adaptability.

Use inclusive language that welcomes diverse talent and candidates, especially those from non-traditional backgrounds. And avoid jargon or buzzwords that could turn people with the skills needed away.

This skills-based approach to job postings broadens your talent pool. It improves cultural fit, attracting strong, diverse candidates who’ll thrive with your team. Want proof? Swap ‘degree required’ for ‘proven skills in…’ and watch your applicant quality improve, and new hires become easier.

See also: How to build diversity and inclusion in the workplace.

Overcoming the challenges of skills-based hiring

 Switching to a skills-based hiring approach isn’t without its hurdles. Bias and old habits can creep in, so train your team on a fair, consistent skills evaluation to match candidates.

• Use structured interviews and clear scoring guides in your interview process.
• Keep everyone on the same page: hold regular check-ins to align hiring managers and stakeholders, setting expectations early to avoid surprises.
• Use standardised assessments to reduce bias and compare candidates objectively.

And don’t forget Australia’s legal must-haves: ensure your hiring process is transparent and compliant, and put decisions on paper to protect both your business and candidates.

The good news? These challenges are totally manageable with the right strategy and support.

What to look for: top skills by industry

Each industry in Newcastle and the Hunter has its own essential soft and technical skills. Our Verve specialists know the skills required right now because they live and breathe this market every day.

Here’s a quick rundown to help you quickly identify them:

• Construction + engineering: Prioritise practical skills and safety expertise over degrees and educational background.
• Tech: Real coding ability will guarantee job performance above formal qualifications.
• Manufacturing: Give priority to operational know-how and process improvement.
• Finance: Seek strong analytical thinking and regulatory savviness.
• Marketing + sales: Focus on creativity paired with results-driven performance.
• Human resources: Prioritise interpersonal skills and conflict resolution expertise.
• Office support: Dig for organisational skills and efficiency over formal titles.
• Executive search: Look for true leadership ability and strategic thinking.

These are the required skills for shaping performance, overcoming talent shortages and hard-to-fill roles, and helping your business grow vibrantly.

The future of hiring? Skills, not degrees

Across Newcastle, the Hunter and beyond, smart HR teams are flipping the script to become skills-based organisations.

It’s no longer about ticking boxes. It’s about spotting real capability, wherever it comes from, with a skills-first approach. Here at Verve Partners, we have the network and expertise to help you nail it.

If you’re ready to rethink what makes someone qualified, implement skills-based hiring, and build a stronger, more vibrant, future-proof team—let’s chat.

Our Partnership Package, which includes building a talent pipeline, might be a great fit for your business and keeps hiring costs down and employee retention up!