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A Guide: How Skills-Based Hiring Improves the Quality of New Hires

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By Taggd Editorial Team

August 28, 2023


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In pursuit of becoming an economic superpower and contributing over 25% of the world’s workforce by 2025, India faces a significant challenge – most of its workforce lacks formal skill training, mentioned in India Skills Report by Taggd. The India Skills Report 2021 revealed that only 45.9% of the country’s youth are considered employable. To overcome this hurdle and ensure a prosperous future, businesses must adopt a transformative approach to hiring – skills-based hiring. 

Many organizations are turning to skills-based hiring as a recruitment strategy to overcome talent shortages. This approach can broaden and diversify the workforce, while research shows that it could lead to better retention, performance, and more qualified candidates.

What is Skills-Based Hiring?

Skills-based hiring is a revolutionary method that focuses on evaluating candidates based on their specific skills and abilities relevant to the job at hand rather than traditional criteria like formal education and years of experience. This inclusive approach taps into a diverse talent pool, fostering innovation and fresh perspectives in the workforce.

As a leading digital recruitment platform, Taggd is at the forefront of hiring top talent. We understand the importance of identifying and harnessing the potential of talented individuals beyond traditional credentials. Through our innovative platform, we bridge the gap between candidates and employers, prioritizing skills and competencies to ensure the best matches for both parties.

Challenges of Traditional Hiring Methods

Traditional hiring methods often emphasize formal qualifications and generic criteria, leading to mismatches between job requirements and candidate capabilities. This can result in high attrition rates and reduced job satisfaction among employees. Skills-based hiring wins the game for various reasons when discussing skill-based vs. traditional hiring. 

Advantages of Skills-Based Hiring

  1. Reducing Attrition Rates

Skills-based hiring can significantly reduce attrition rates by ensuring candidates are genuinely qualified and aligned with job requirements. Employees who are satisfied with their roles and feel competent are more likely to stay committed to the organization.

  1. Improving the Quality of New Hires

By focusing on specific skills and competencies required for a role, skills-based hiring results in better-fitting candidates who can contribute immediately, leading to higher productivity and efficiency.

  1. Addressing Digital Skills Demand

Skills-based hiring enables organizations to identify candidates with relevant digital proficiencies, helping them stay ahead in the digital transformation race.

  1. Adapting to the Changing Hiring Landscape

The pandemic has accelerated the shift towards skills-based hiring. With workplace dynamics changing rapidly, organizations now require agility, adaptability, and modern skills in candidates to thrive.

  1. Empowering Job Seekers

Skills-based hiring opens up new opportunities for individuals without formal degrees but with valuable skills acquired through vocational training or self-learning.

Modern Outlook on Hiring

The shift towards skills-based hiring signifies a modern outlook regarding candidates’ skills. In the fast-changing world of work, employers now value agility, adaptability, and practical abilities over conventional qualifications alone. Skills-based hiring aligns with the demands of the contemporary job market and allows companies to stay ahead of the curve in a rapidly evolving business landscape.

  • Data from Decoding Jobs 2023 India Report

According to data collected from this year’s India Hiring Intent Survey, the average attrition rate of India Inc. for 2022 can be pegged at 18%, which is an improvement from the 25% recorded in 2021. This reduction in attrition rates is a positive sign for businesses and can be partially attributed to adopting skills-based hiring practices.

  • Impact on IT Industry & Manufacturing Sector

The IT industry has improved with a drop in attrition rate to 25% in 2022, thanks to skills-based hiring practices that retain employees. This is a positive shift towards enhancing employee job satisfaction and retention rates. By focusing on specific skills and competencies required for various IT roles, employers can find better-fitting candidates more likely to stay committed and satisfied in their positions. On the other hand, the manufacturing sector witnessed the lowest attrition rate at 14% in 2022. This demonstrates how skills-based hiring has also benefited industries like manufacturing, which might traditionally have relied heavily on formal qualifications and experience in their hiring processes. Manufacturing companies have identified and retained talent more effectively by considering candidates based on their demonstrated skills and abilities rather than just traditional criteria (Data from the Sectoral Reports by Taggd).

Implementing Skills-Based Hiring

  1. Restructuring Job Descriptions

Organizations can revamp job descriptions to focus on skills and competencies rather than strict educational requirements.

  1. Utilizing Skills Assessments

Conducting skills assessments, practical tests, and case studies help accurately evaluate a candidate’s abilities.

  1. Emphasizing Continuous Learning

Encouraging and supporting employees’ ongoing learning and upskilling ensure they stay relevant in the rapidly evolving job market.


Skills-based hiring is a powerful tool that enhances the quality of hiring top talent, reduces attrition rates, and fosters a diverse and innovative workforce. As businesses in India continue to navigate the evolving landscape, prioritizing skills over traditional qualifications is prudent. Embracing this transformative approach to hiring unlocks the workforce’s full potential and contributes significantly to India’s economic growth and success on the global stage. So, it’s time to say goodbye to the old ways and embrace the power of skills-based hiring for a brighter future! 

By Taggd