Skills-Based Hiring in Tech: The Key to Finding the Right IT Talent

The technology industry is experiencing a fundamental shift in hiring practices. Companies that once prioritized degrees and job titles are now focusing on skills and competencies to fill critical roles.

As demand for specialized tech talent continues to outpace supply, skills-based hiring is emerging as the key to bridging talent gaps, enhancing workforce diversity, and improving hiring efficiency.

The Growing Momentum of Skills-Based Hiring

The adoption of skills-based hiring has accelerated rapidly. According to TechGorilla’s State of Skills-Based Hiring 2024 Report, 81 percent of employers reported using this approach, up from 73 percent in 2023 and just 56 percent in 2022. Tech companies, in particular, are leading the charge, recognizing that practical abilities often outweigh formal credentials.

Several factors are driving this shift:

Persistent talent shortages. As demand for specialized roles such as cybersecurity analysts and AI engineers grows, companies struggle to find qualified candidates through traditional hiring methods.
The rapid pace of technological change. Formal education curricula often lag behind industry advancements, making skills-based hiring a more reliable approach for identifying relevant expertise.
The need for a more diverse workforce. Skills-based hiring removes barriers for non-traditional candidates, leading to greater diversity in the workplace.
Better job performance predictions. Employers increasingly recognize that skills are stronger indicators of success than degrees or job titles.

For tech companies, the impact is undeniable. By prioritizing skills over traditional credentials, organizations can build more adaptable teams, improve hiring efficiency, and retain top talent in an increasingly competitive landscape.

quote by eric hutto about people hiring for skills

The Business Case for Skills-Based Hiring

Beyond filling open positions, skills-based hiring delivers measurable benefits, including improved performance, cost savings, and enhanced innovation.

Results of the Test Gorilla survey found compelling evidence that skills-based hiring makes sense:

Improved Performance and Retention

94 percent of employers agree that skills-based hiring is a stronger predictor of on-the-job success than resumes alone.
91 percent of companies using this method have increased employee retention.
Skills-based hires stay with their organizations 9 percent longer than traditional hires.
Tech workers without college degrees are 20 percent more likely to remain in their roles compared to degree-holding peers.

organizations with a skills-based approach

Adoption Rates and Predictive Success

81 percent of employers are utilizing skills-based hiring in 2024, a significant increase from 73 percent in 2023 and 56 percent in 2022.
94 percent of employers agree that skills-based hires outperform those selected based on degrees.
90 percent of employers using skills-based hiring have seen a reduction in mis-hires.

Cost and Time Efficiency

$7,800 to $22,500 saved per hire for U.S. employers in roles with $60,000 salaries by reducing mis-hires through skills-based hiring.
412 to 792 hours saved per senior management hire, and 339 to 660 hours saved per non-senior role hire, attributed to skills-based hiring practices.

companies implementing skills-based hiring practices

Candidate Preferences

68 percent of employees prefer a skills-based hiring process, marking a 21 percent increase from the previous year.
90 percent of candidates feel more likely to secure their dream job through skills-based hiring methodologies.

Enhanced Innovation

The shift to skills-based hiring is proving to be a powerful catalyst for innovation across the tech sector:

Eighty-seven percent of companies using skills-based hiring report increased innovation and problem-solving capabilities.
LinkedIn data reveals that skills-based hiring expands talent pools by nearly 19 times, providing access to previously untapped innovative thinking.
76 percent of CIOs report that teams assembled through skills-based hiring demonstrate greater creativity in technical problem-solving.

By focusing on specific competencies rather than conventional qualifications, companies gain access to unconventional thinkers who approach challenges from fresh perspectives, driving technological advancement and competitive advantage.

In-Demand Tech Skills for 2025

Rapid digital growth and evolving tech demands are reshaping the roles and skills needed across industries. Tech companies are shifting their focus toward hiring professionals with specialized technical expertise and strong problem-solving abilities.

These competencies and soft skills are dominating the hiring landscape in 2025:

Technical Competencies

Artificial intelligence and machine learning. Engineers with skills in Python, TensorFlow, and AI ethics will be in high demand.
Cybersecurity. Professionals with expertise in penetration testing, zero-trust security, and CISSP certification will be crucial.
Cloud computing. Certifications from Google Cloud, AWS, and Microsoft Azure, along with skills in Kubernetes and Terraform, are becoming industry standards.
Blockchain technology. Knowledge of Solidity, Ethereum, and decentralized systems will be highly valued in fintech and enterprise applications.
DevOps and automation. Engineers skilled in CI/CD pipelines, Docker, and cloud-native tools will be critical for scalable and secure development.
Data science and analytics. Proficiency in Python, SQL, and tools like Tableau and Power BI will be essential for data-driven decision-making.
Full stack development. Front-end expertise in React and Angular, combined with back-end skills in Node.js and Django, will be in demand.
Internet of Things (IoT). Engineers with knowledge of embedded systems, edge computing, and IoT protocols will be needed to manage connected devices.
Augmented and virtual reality. Skills in Unity, Unreal Engine, and 3D modeling will be valuable as AR/VR applications expand.
Quantum computing. Understanding of Qiskit, quantum mechanics, and advanced algorithms will be key as quantum technology advances.

Soft (Human) Skills

Problem-solving, communication, and adaptability are now as essential as technical expertise.
AI collaboration skills are emerging as a must-have, as professionals must optimize their work alongside intelligent automation tools.

Implementing Skills-Based Hiring in Your Organization

Transitioning to skills-based hiring requires a strategic approach that involves assessment techniques, job description updates, and hiring process improvements.

Assessment Strategies

Define role-specific competencies. Develop clear competency frameworks that outline the essential skills required for each role.
Use multiple assessment methods. Coding challenges, portfolio reviews, and simulations provide more accurate evaluations than resumes alone.
Implement multi-measure testing. Organizations using skills-based assessments before resume screening report higher satisfaction rates (87 percent) than those that screen resumes first (78 percent).

Organizational Changes

Train hiring managers to assess candidates based on demonstrated skills, rather than educational backgrounds.
Rewrite job descriptions to emphasize required competencies instead of degrees or years of experience.
Invest in continuous learning. Companies must offer reskilling and upskilling programs to ensure employees keep pace with evolving technologies.
Measure success. Establish key metrics to compare skills-based hires with traditionally recruited employees.

The Future of Skills-Based Hiring in Tech

The rise of skills-based hiring is not a passing trend—it is becoming the dominant approach in tech talent acquisition.

Several key developments will continue shaping this hiring model:

AI-powered recruitment tools will improve candidate matching based on skills and work samples.
Reskilling initiatives will become more critical as technology continues to evolve.
Companies will develop proprietary assessment frameworks to evaluate talent beyond traditional resumes.
Education gaps will drive new credentialing methods, such as skills certifications and competency-based hiring platforms.

For tech companies and IT staffing firms, embracing skills-based hiring is no longer optional—it is a competitive necessity. Organizations that effectively identify, assess, and develop skills-based talent will gain a significant advantage in hiring top-tier professionals.

GDH Specializes in Skills-Based Hiring in Tech

By prioritizing skills over credentials, GDH enables companies to build more innovative, high-performing teams. Our expertise in skills-based hiring can help your organization break away from outdated hiring practices and embrace a modern, competency-driven approach.

When you work with GDH, you get:

Access to a Pre-Vetted Talent Pool with Verified Skills

GDH ensures that every candidate in its network has real-world expertise, not just an impressive resume. Companies partnering with GDH get access to pre-screened professionals who have demonstrated the necessary technical and soft skills to excel.

Faster Hiring Times with a Focus on Proven Abilities

GDH helps businesses reduce time-to-hire by identifying candidates with the right competencies upfront. This means fewer wasted interviews and faster placements of skilled IT professionals.

Reduced Hiring Bias and Expanded Talent Pipeline

By focusing on what candidates can do rather than where they learned to do it, your company can build capable, future-ready teams prepared for tomorrow’s challenges.

Need to find top-tier IT talent with the right skills for your organization? Contact GDH today to learn how our skills-based staffing solutions can help you hire smarter.