Steps to building a skills-based hiring strategy

What you’ll learn:

• Why skills data is the foundation of a successful hiring strategy.
• How large enterprises undergoing transformation can move from outdated, experience-based hiring to a skills-first approach.
• The five critical steps to implementing skills-based hiring—from defining job roles with skills to structuring fair, skill-based compensation.

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Introduction 

By 2030, 85 million jobs will be unfilled (Gartner), and 73% of business executives expect ongoing talent shortages (Deloitte). Yet, 92% of companies lack reliable workforce skills data—the foundation for any effective hiring strategy. Without this data, companies struggle to identify skill gaps, match talent to roles, and hire with confidence.

For People & Business leaders in large enterprises undergoing transformation, the shift to skills-based hiring isn’t just about improving recruitment—it’s about future-proofing the workforce, building agility, and reducing inefficiencies at scale.

Skills data as the foundation 

The way companies hire is broken. Resumes, outdated job descriptions, and manual screening slow down hiring, drive up costs, and cause missed talent opportunities. Without a structured approach to workforce skills, organizations remain reactive—making hiring decisions based on credentials rather than actual capabilities.

But hiring doesn’t start with hiring—it starts with better workforce skills data. To build a skills-based hiring strategy, companies first need a clear, accurate picture of their workforce skills. With high-quality, real-time skills intelligence, organizations can:

• Map job roles accurately
• Identify workforce gaps
• Recognize internal talent potential
• Reduce hiring mistakes and time-to-fill

Once the right data is in place, companies can shift from outdated hiring practices to a skills-first approach. Below, we outline five practical steps leading enterprises are using to make that shift.

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How to build a skills-based hiring strategy 

1. Build a skills-first job architecture

A structured job architecture is the backbone of skills-based hiring. Yet, many organizations still rely on vague job titles and outdated descriptions that don’t reflect the skills companies actually need.

With AI, organizations can automatically assign relevant skills to every role, creating a structured, consistent hiring process. This enables:

• A clear view of skill demand across the company
• Better workforce planning and internal mobility
• Stronger alignment between business needs and talent strategies

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“Skills-based hiring starts with understanding the skills you have today and the skills you need tomorrow,”
Mikaël Wornoo
Co-founder and President US at TechWolf.

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➡️ See how Workday transformed hiring with a skills-first approach

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2. Define jobs with skills, not just titles

Many companies still define roles using job titles and generic qualifications, making it difficult to assess actual skills. Instead, business leaders should:

• Use market data to define roles, ensuring alignment with industry trends.
• List required skills clearly, instead of focusing only on past experience.
• Include both critical and related skills, so employees can grow into roles.

By defining jobs through skills rather than tenure or credentials, companies expand their talent pool and improve hiring efficiency.

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3. Optimize every stage of hiring

To make skills-based hiring work, organizations must integrate skills-first principles into every stage of recruitment. This includes:

• Writing job descriptions that focus on skills, making hiring criteria clearer for both recruiters and candidates
• Tagging critical skills in job postings, improving sourcing and targeting
• Matching candidates based on skills, ensuring better role alignment
• Identifying internal talent for promotions or lateral moves, reducing external hiring costs

"Skills-first hiring isn’t just a trend—it’s the key to making better talent decisions," says Mikael Wornoo, President US at TechWolf. A skills-first hiring process is faster, fairer, and more efficient, reducing hiring bias and increasing workforce agility.

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4. Conduct skills-based assessments

Resumes provide only a partial view of a candidate's capabilities, while skills-based assessments offer a clearer picture of their actual potential. By using structured assessments instead of relying on guesswork, companies can reduce bias, improve hiring accuracy, and make more confident decisions based on real skills.

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5. Pay should reflect skills, not just job titles. 

Traditional salary structures rely on outdated metrics like tenure and past salaries, rather than actual skill value. A skills-based compensation model ensures fair and transparent pay by:

• Setting salary bands based on required skills rather than job levels
• Using market benchmarks to ensure competitive, equitable pay
• Defining clear skill-based career paths, encouraging continuous learning

This approach aligns pay with business impact, motivates employees to develop in-demand skills, and helps organizations attract and retain top talent.

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6. Train hiring teams on skills-based recruitment

Companies don’t need to overhaul their entire hiring process overnight. The best approach is to start small and expand gradually by piloting skills-based hiring in key roles, measuring its impact on speed, cost, and quality, and then scaling it across more teams. With AI-driven skills intelligence, organizations can continuously refine their hiring approach, making smarter, data-backed decisions that build a stronger workforce for the future.

"Companies that train their hiring teams on skills-first recruitment methods see faster hiring, better retention, and stronger talent pipelines," says Mikaël Wornoo, Co-founder and President US at TechWolf.

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7. Start Small, Scale Fast

Companies see the best results when they start small—focusing on a few critical roles, refining their approach, and gradually scaling. By measuring the impact on hiring speed, cost, and quality, organizations can confidently expand skills-based hiring across teams.

With AI, companies gain deeper insights into workforce capabilities, continuously improving their strategy while building a more agile, skills-first organization.

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"Skills-based hiring isn’t an all-or-nothing shift—it’s about progress, not perfection," says
Cedric Vandamme
VP of Professional Services at TechWolf. 

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➡️ Read how Workday reduced hiring time by 32% with AI-driven skills data.

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Final thoughts: Moving from awareness to action

People & Business leaders in large enterprises already know skills are the future—but recognizing the problem isn’t enough. Having the right skills data in place is the key to unlocking a successful hiring strategy.

With skills intelligence, enterprises can move from fragmented, inconsistent hiring to a structured, scalable, skills-based approach.

🚀 Ready to make skills-based hiring a reality?
👉 Talk to our team or Read the full case study to see how enterprises are transforming hiring with AI-driven skills data.