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Skills To Pay the Bills: Why Skills Matter More Than Credentials When Hiring

Cornerstone Editors

The skills gap is a big problem — one that federal lawmakers and employers alike are eager to close. Despite a 6.7 percent unemployment rate, the Aspen Institute reports that more than three million U.S. jobs are unfilled.

Why? Pundits point to a dearth of skills in today's workforce. But there's another budding school of thought: recruiters are looking at the wrong qualifications when assessing job candidates.

The classic resume — replete with GPAs and Ivy League or city college credentials — is a thing of the past, some talent managers argue. Instead, recruiters must focus on the actual skills that candidates offer.

Skills-based Hiring in Action

Consider Google: company recruiters used to ask candidates for transcripts, GPAs and test scores — before concluding they were "worthless" for hiring purposes, Laszlo Bock, senior vice president of people operations at Google, told the New York Times. Up to 14 percent of team members at Google never attended college, according to Bock.

Today, Google evaluates candidates using behavioral interviewing, where past behavior is seen as a leading indicator of future behavior. A candidate's experience leading projects or introducing a better work process are valued above brute intelligence.

Wade Foster agrees with Google's focus on behavior. "A list of credentials shows how well a person can maneuver through a bureaucratic system," says Foster, CEO of Zapier, a webapp-automation service, "but it’s a poor predictor of success."

How One Program Is Rethinking Skills-based Hiring

While Obama wants to close the skills gap by revamping job training programs, the private sector is taking a different approach. The Gates Foundation, for example, is partnering with Innovate+Educate to promote "skills-based hiring." Employers develop a skills-based credential system based on what they’re looking for, and candidates take tests to demonstrate a skill and can receive training if they don’t pass the test, according to Business Insider.

The endeavor, dubbed the "New Options Project," is billed as a win-win. Candidates find jobs that allow them to apply their skill set, and employers recruit new employees that require 50 percent less time to train and are up to 75 percent less likely to quit, according to Innovate+Educate. Bill Gates, who didn't graduate from college before co-founding Microsoft, tells Fast Company that the idea behind New Options Project is to create "a skills-based credential that is well trusted and well understood enough that employers view it as a true alternative to a degree."

Three Fields Where Skills and Degrees Are Battling it Out

  • Business: MBAs and their non-degreed peers have long argued about the value of a graduate degree in business. Proponents of the MBA say it's a requisite for any aspiring business leader, and virtually guarantees a great job with a high salary. Critics counter that business school is a waste of money and doesn't give aspiring business professionals the specialized knowledge they need to succeed. Mariana Zanetti, author of The MBA Bubble, suggests that wannabe MBAs need only to apply to the top schools, decline any acceptances and then put the acceptance on their resumes. The effect would be the same, she asserts.

  • Cybersecurity: A credential as a Certified Information Systems Security Professional may get pats on the back in the digital security field, but it's not a ticket to a job, says Philip Reitinger, chief information security officer for Sony Corp. A candidate's technical skills and reputation matter more, he says. "If they know their way around a kernel, and they can tell me about buffer overruns and different ways to attach and they’ve got the skills to get the job done, they’ve got a job," explains Reitinger.

  • STEM: Science, technology, engineering or mathematics degrees are often seen as the brass ring leading to a golden future of high employment and early retirement. But the statistics suggest otherwise: only 43 percent of employees in a so-called STEM field have STEM degrees, according to the Commerce Department report. "The large majority of STEM workers who lack a bachelor’s degree in STEM actually lack a bachelor’s degree in any subject," according to a Huffington Post story about the report. Cue Bill Gates.

Image via Can Stock Photo

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