BLOG: How a Switch to Competency-Based Hiring Could Help Solve the Youth Employment Crisis, February 2016
It’s no secret that today’s young adults are facing the biggest youth unemployment crisis of our time. With nearly six million 16-to-24-year-old Americans out of school and out of work, it’s time we get smarter and more innovative about recruitment and hiring for this valuable population.
So what does that look like, exactly?
With the help of a few innovative solutions providers and tech firms, many companies have started to answer that question by re-imagining what a new age of hiring could look like. In a recent Wall Street Journal article, “The Boss Doesn’t Want Your Resume,” author Rachel Feintzeig details several companies’ “blind-hiring” strategies, whereby recruiters forgo traditional resume submissions in favor of more creative and task-oriented assessments of a candidate’s qualifications and interest in the role. For young people who have limited or non-traditional working experience, these types of strategies could fundamentally change the hiring game.
“Work by Innovate+Educate and others shows that hiring based on competencies, rather than credentials, can have a significant impact…”
What’s more, these strategies are proving to be good for business. Many bosses are reporting that “blind hiring reveals true talents and results in more diverse hires,” whereas traditional hiring practices allow managers to pick hires based on whom they’ve connected with personally, or who has the shiniest resume and pedigree—factors that fail to accurately predict job performance. As most companies know, the better the hire, the more likely the person is to stay at the company and perform at a high level, reducing costly turnover and repeat training.
At The Rockefeller Foundation and Innovate+Educate, we see these alternative forms of assessing talent as a critical component of “impact hiring”—an approach to recruiting, assessing, and supporting younger workers that makes sense for businesses and expands employment opportunities for disadvantaged youth. Work by Innovate+Educate and others shows that hiring based on competencies, rather than credentials, can have a significant impact on core business metrics, like retention, while opening doors for younger workers who might have been screened out using traditional methods.
For example, in 2013, Innovate+Educate, through its work with the W. K. Kellogg Foundation’s New Options Project, conducted a study of unemployed young adults in New Mexico. It showed that while only 1 percent of that population qualified for jobs where the pre-requisite was a college degree, a staggering 33 percent of youth qualified for those same jobs when qualification was assessed by skills instead of credentials. The measurement assessed core foundational work skills such as literacy, mathematics, and the ability to locate information.
Not only can competency-based hiring help fill an employer’s recruiting pipeline, but evidence shows that employers that adopt a competency-based hiring approach have seen other key business impacts, including: a 25-75 percent reduction in turnover; a 50-70 percent reduction in time to hire; a 70 percent reduction in cost-to-hire; and a 50 percent reduction in time to train, all resulting in decreased cost for employers and more successful job matches for youth.
In 2016, we are working together to bring alternative assessments and hiring methodologies to more employers. The Rockefeller Foundation and grantee Innovate+Educate, along with the City of Albuquerque Mayor’s office have set up 32 skills-centers, including one at a downtown homeless shelter. These skill centers provide free skills training to young adults seeking part-time and full-time employment. Key to the initiative are over 65 employers across the Albuquerque metro area that are hiring based on skills and competencies, providing opportunities for young adults to show their skills and training for employment and social mobility.
While these efforts are a great start, competency-based hiring is far from being the norm in employer youth recruitment efforts. We need to ensure that America’s youth have an opportunity to be seen for both their skills and traditional credentials, which requires re-imagining what it means to be qualified for a particular job—and more companies that are willing to be “blind” to traditional means of finding the right candidate.
Building on the good work that Innovate+Educate has started, an increased emphasis on competency-based hiring by employers will create employment opportunities that foster youth development, provide businesses with needed talent, and put us one step closer to getting nearly six million young people into meaningful employment pathways.
Originally published by The Rockefeller Foundation.