Skills-based hiring is becoming increasingly popular among companies, while formal qualifications like degrees are becoming less important — especially as labor markets remain tight.
Many firms are still struggling to fill roles, and the way they currently approach hiring might be making this even more challenging, Sue Duke, vice president and head of global public policy at LinkedIn, told CNBC Make It.
"The difficulties we face as we struggle to fill roles, weather economic shifts, and create a diverse and resilient workforce will only grow unless we change our approach to finding and nurturing talent," Duke said.
One way companies are changing their approach is by focusing more on skills, rather than qualifications like college degrees or previous work experience. According to LinkedIn data shared with CNBC Make It, 45% of companies are now explicitly using skills-related metrics to find candidates, 12% more than a year ago.
Daniel Pell, vice president and country manager for the U.K. and Ireland at HR tool Workday, has also noticed a shift.
"HR has shifted to a skills-based economy," Pell told CNBC Make It.
How skills-based hiring works
Hiring based on skills can have a wide range of benefits both for workers and employers, Duke said.
"Our research showed a skills-first approach could increase the global talent pool by nearly ten-fold. And a larger talent pool means less competition with other companies over the same candidates," she said.
But the benefits are thought to go beyond expanding the number of available candidates.
According to Workday's Pell, skills-based organizations are "far more likely to outperform their traditional counterparts" when it comes to innovation, efficiency, and adaptability.
The trend has been boosted by new artificial intelligence and machine learning products, Pell said, as those can help companies identify the right candidates.
Another major benefit for both workers and employers is that skills-based hiring can be vital for building a more diverse workforce.
"It levels the playing field for workers who may have been overlooked," Duke said. This includes people who have not attended or completed university, women, and younger generations.
"For example, in jobs where women are underrepresented, the proportion of women in the talent pool could increase 24% more than it would for men, which leads to more women being hired," she said.
This also increases opportunities for job-seekers, as well as making the job application process more transparent, according to Duke.
Companies that focus on skills also often provide development opportunities to their employees, Pell said. That means workers have more opportunities to grow and add to their existing skillset, helping them be successful long term, he said.
Tailoring your resume
As skills come into focus, the way job applications are assessed may change — a shift that can be difficult for job-seekers to navigate. However, they can also use it to their advantage, recruitment specialists said.
"Applicants can optimize skills-based hiring by making sure their CVs are tailored to this type of hiring," Gaelle Blake, director of permanent appointment at recruitment company Hays, Told CNBC Make It.
This does not, Blake said, mean turning your application into a long list of skills.
"Candidates should make sure their CV showcases their individual skills and abilities; rather than listing the generic, in-demand skills," Blake said. Tangible examples or data points that demonstrate these skills are also crucial, she added.
Amanda Augustine, a career expert at TopResume and certified career coach and resume writer, agreed.
"When crafting a skills-based resume, it's important to follow one simple rule: 'show, don't tell,'" Augustine told CNBC Make It.
Evidence of candidates having suitable skills can then be woven into the application, for example by adding it to bullet points outlining previous job experience, Augustine said.
Job-seekers might also want to change the structure of their resumes by adding slightly unconventional sections like "Core Skills" or "Areas of Expertise" to them, Augustine said. This could mean listing a skill, followed by proof of it through a brief anecdote or data.
Candidates can show their personality and why they would be a good fit for the company through their skills, Blake said.
"Candidates who connect the relevant skills to who they are as a person are likely to catch the attention of the employer," she said.
Finally, and perhaps most importantly, Blake and Augustine both said there is one thing candidates should never overlook before tailoring a resume: the job description.
"Checking the job description for key words is a useful way of identifying the most relevant skills an employer is looking for," Blake said. And that information is crucial for candidates trying to make sure their resume fits the bill — and gets them an interview.