Focus On Skills-Based Hiring

Skills-Based Hiring Defined: A recruitment approach that evaluates candidates based on their demonstrated abilities and competencies rather than traditional credentials like degrees or specific job titles, expanding access to qualified talent while improving hiring outcomes.

Quick Facts (LinkedIn Economic Graph Research Institute)

  • 64% of employers now use skills-based hiring for entry-level roles
  • 85% adoption rate in 2025, up from 81% last year
  • Workers without bachelor’s degrees are seeing 6% more opportunities under skills-based models

What this means for employers today:

Skills-based hiring is reshaping how organizations identify, attract, and retain talent. With rapid technological advancement and evolving job requirements, traditional credentials are becoming less reliable predictors of job success. Companies that focus on measurable competencies gain access to broader, more diverse talent pools, including candidates with non-traditional backgrounds who bring valuable skills acquired through certifications or hands-on experience. Employers are increasingly prioritizing skills like AI and machine learning, data analysis, cybersecurity, and project management—alongside critical soft skills such as creative thinking, adaptability, leadership, and problem-solving. This approach not only addresses talent shortages but also improves retention rates and job satisfaction by ensuring better alignment between candidate abilities and role requirements.

Actionable Takeaways:

Redesign job descriptions: Focus on required competencies and skills rather than rigid degree requirements or years of experience. Clearly define what candidates need to know and accomplish to succeed in the role.

Implement skills assessments: Use behavior-based interviews, competency-based evaluations, and practical skills tests to objectively measure candidate abilities. These assessments provide better predictors of job success than traditional screening methods.

Build internal skills visibility: Create a skills inventory of your current workforce to identify strengths, gaps, and opportunities for internal mobility. This enables more strategic talent development and succession planning.

Expand your talent pool strategically: By removing unnecessary degree requirements, you can access up to 19 times more qualified candidates. Look beyond traditional backgrounds to find talent with relevant skills from boot camps or practical experience.

Tip of the Month

Don’t underestimate this shift. Skills-based hiring is a fundamental reimagining of talent acquisition, not just a process tweak. Convene your leadership to identify the skills that truly drive success in your organization, then pilot the approach in one critical role where traditional hiring has consistently failed.

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Compensation & Benefits – Minimum Wage & Exempt Pay Increases

Major wage increases hit January 1, 2026, across multiple states and localities, from Arizona’s $15.15 to Washington’s $17.13 state minimum, plus exempt salary thresholds rising in California ($1,352/week) and Washington ($1,541.70/week). Review your compliance now.

December 2025 Reported Data
The unemployment rate held steady at 4.4% with labor force participation unchanged at 62.4%, while job growth continued in healthcare, food services, and social assistance sectors.

  • Unemployment rate: 4.4% (unchanged)
  • Labor force participation: 62.4% (changed little)
  • Sector-specific trends: In December, employment continued to trend up in health care, food services and drinking places, and social assistance.
  • Average hourly earnings: $.09 increase
  • Temp help jobs: 3.9% decrease

References: Bureau of Labor Statistics | American Staffing Association

TalentRise Today – Monthly Talent Essentials – Each month, TalentRise brings you the workforce trends worth tuning into. Consider this your 5-minute update on what’s making waves in talent acquisition.