Applying for a job with a resume is no longer the best way to find work, according to a new global research report, which finds that 87% of employers report problems finding talent this way.

The study ‘The State of Skills-Based Hiring 2023' by TestGorilla reveals the scale of the issue - with 60% of companies experiencing a skills shortage exacerbated by changing work patterns post-pandemic, and staff increasingly changing careers.

The alternative, skills-based hiring - where candidates are screened based on their aptitude to perform the job by going through a series of skills-based tests or exercises - is accelerating. According to the research, 73% of firms are now opting for this route – a jump of 17% from 2022 (56% of companies were using skills-based hiring 12 months ago).

Issues cited by employers still using resumes include accuracy (51%), difficulty in ranking applicants (43%), and problems with unconscious bias - all contributing to the overall picture that resumes are now outdated as a primary selection method.

The benefits to employers recruiting for skills include:

• 88% report a reduction in mis hires; 74% reduced cost to hire; 82% said time to hire was less 89% experience higher levels of staff retention.
• Employers also report an increased desire to recruit  for soft skills. With automation and AI rising in many sectors, emotional intelligence is becoming more prized as a way to complement this trend – 91% of employers said soft skills are more important than they were 5 years ago, an increase from 81% in 2022.

Indeed, staff hired for their skills experience less bias and are more likely to be working in diverse teams. Some 84% of the firms polled experienced a positive impact on workplace diversity after adopting skills-based hiring.

“This is a seismic shift considering resume screening has been almost universally relied on for decades," says TestGorilla CEO and co-founder Wouter Durville.

"Skills-based hiring has been around for a fraction of the time that resumes have. We are seeing a tipping point that could mark the death of the resume as a way to get work in the next two to three years.”

Employees recruited for skills are happier, the research found. 38% of skills-based hires surveyed said they are happy in their job compared to 28% of those who landed their jobs through a resume-based hiring process.  

Sectors most likely to be using skills-based hiring at some point in the recruitment process were found to be those working in the broadcasting and publishing industry (100%), marketing (100%) and real estate & leasing (83%). The sectors least likely to be recruiting on skills were wholesale, education, and transport sectors.

The move away from resumes altogether looks set to continue, with 60% of firms looking to increase their spend in skills-based selection in the next 12 months, up from 39% in 2022. 

“While qualifications and experience are still valid, we are seeing that a candidate’s ability to be able to do the job they are applying for is much more easily gauged by assessing their skills," says Durville.

“This approach to recruitment is also, crucially, levelling the playing field when it comes to diversity – skills-based hiring by definition does not introduce bias," he says. 

"With increasing remote work opportunities, skills-based hiring is attracting talent from all over the world into roles that would otherwise have been closed off using the old resume selection route.”