Foreword and Introduction
In today's rapidly evolving marketplace, where innovation is the cornerstone of success and sustainability, organisations across the Asia-Pacific (APAC) region are facing an unprecedented need to adapt to changing economic landscapes and technological advancements. At the heart of this transformation lies a fundamental shift in hiring paradigms — moving from a traditional experience-based approach to a more dynamic, skills-based hiring strategy. Skills-based hiring is a forward-thinking recruitment philosophy. It places a primary focus on the actual abilities and competencies of candidates, rather than solely looking at a candidate’s previous work experience or educational qualifications. The transition towards skills-based hiring represents not merely a change in recruitment strategies but a fundamental evolution in how companies in APAC view and invest in human capital. Embracing this change is not just an option but an imperative for those aiming to lead and redefine industry standards in an increasingly complex and interconnected world.
Vice President, APAC
Allegis Global Solutions
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Businesses around the world continue to grapple with the scarcity of highly skilled talent and strong competition in the labour market. With the post-pandemic recovery complete in many global regions, hiring leaders struggle with a labour market that has yet to feel like it has returned to business as usual. Lightcast, with data gathered by the United Nations, found that the growth of the working age population will slow across 80% of countries by 2040 and will begin to shrink by 30%. While 2023 in many ways was a return to normalcy for most of the labour market, Lightcast pointed out one key COVID-era trend that will remain true, “the unspoken assumption that there is always more talent to be found, somewhere, may no longer apply.”
As a result, many companies are shifting towards a skills-based hiring strategy to gain access to broader talent pools and drive efficiency in recruitment processes. The approach focuses on practical skills and knowledge in place of educational levels and degrees. This way, employers can attract the highest quality talent, expand their talent pools and focus on driving development in the existing workforce. The World Economic Forum highlighted in a recent article that skills-based hiring was five times more predictive of job performance than relying on education and twice as predictive as work experience.
A Linkedln report found that talent pipelines around the globe expanded 10 times larger, on average, when employers used a skills-first approach to hiring. That number ballooned by 19 times for talent pipelines in the US, where degree requirements lock most of the workforce out of consideration for many high-skilled roles.
In this report, we share our research findings on the transformative power of a skills-based approach and discuss how the paradigm shift impacts employers' talent attraction and retention strategies in the Asia-Pacific (APAC) region.
