22 Jul Skills-based Hiring – How HR Software Should Support It
Key Takeaways
- 70% of employers use skills-based hiring, up from 65% the previous year (NACE Job Outlook 2026).
- 71% of employers who use this approach apply it in at least half of their hiring processes (NACE Job Outlook 2026).
- A competency written as free text on a CV cannot be compared or verified across an organization.
- MintHCM stores competencies as a separate data object with a type, linked to skills, knowledge, and attitudes.
- MintHCM’s competency rating module lets you compare the required level for a position with the actual level of a candidate or employee.
What is skills-based hiring and why is it growing?
Skills-based hiring is a recruitment approach where employers evaluate candidates based on specific skills and competencies rather than formal degrees. According to NACE Job Outlook 2026, 70% of US employers report using this approach, up from 65% the year before. Among employers who use it, 71% apply it in at least half of their hiring processes. Making this work in practice, not just on paper, requires skills-based hiring software that stores competencies as data, not as CV text.
This growth is not accidental. Companies increasingly recognize that a degree says little about whether a candidate can actually perform a specific job. Skills-based hiring shifts the question from “where did you study” to “what can you prove you can do.”
Why doesn’t a competency written as CV text hold up?
A competency recorded as a text fragment on a CV or in a descriptive field of an HR system cannot be used for much beyond being read by a human. It cannot be counted, compared across candidates, or matched against the requirements of a specific position.
A recruiter reviewing thirty candidates who each list “project management skills” on their CV has no reliable way to distinguish a claimed level from an actual one, or to compare it against what the position requires. Text has no structure: it lacks a competency type, a level, a rating source, and a link to the role being applied for. This means any hiring decision based solely on descriptive CV text stays subjective, even if the company claims to follow a skills-based approach.
What does a competency look like as a data model, not a text field?
A competency as a data model is a record in the system with a type, a description, and relationships to other objects, not a single sentence in a form. In MintHCM, a competency (the Competencies module) is exactly that kind of record: it carries an assigned type – organizational, core, technical, behavioral, functional, or management – and can be linked to separate Skills, Knowledge, and Attitudes modules.
A competency that is a database record, not a sentence on a CV, can be counted, compared, and reported on – text cannot.
This structure lets a company build a consistent competency dictionary used the same way in recruitment, periodic reviews, and development planning, instead of writing a new description for every CV.
How can HR software compare position requirements with a candidate’s profile?
HR software compares position requirements with a candidate’s profile by assigning a rating for a specific competency to both the position and the person, then matching the two values against each other. In MintHCM, this is handled by the CompetencyRatings module: each rating uses a scale from 1 to 5 and is linked either to a position (Positions) or to an employee role (EmployeeRoles).
This lets a recruiter compare the required level of a given competency for a position with the level a candidate or employee actually holds, instead of relying on an impression from an interview. The same mechanism extends beyond recruitment – the same competency records reappear in periodic reviews and career development planning, so data entered once keeps its value after the hiring process closes.
CV text field vs. competency record in HR software
| Criterion | Text field on a CV | Competency record in HR software |
|---|---|---|
| Comparable across candidates | No – depends on writing style | Yes – shared rating scale |
| Linked to position requirements | No | Yes – via a link to the position |
| Reportable and analyzable | No | Yes – structured data, countable |
| Reusable after hiring ends | Usually none | Yes – same records used in reviews and development |
| Competency type (technical, behavioral, etc.) | Unstandardized description | Standardized type field |
Frequently asked questions
How does skills-based hiring differ from traditional degree-based recruitment?
Skills-based hiring evaluates candidates based on proven skills and competencies rather than formal education. Traditional recruitment treats a degree as a baseline filter, even when it doesn’t reflect the actual skills a position requires.
Why are more companies adopting skills-based hiring?
According to NACE Job Outlook 2026, 70% of employers use this approach because a degree increasingly correlates poorly with actual readiness to perform specific job tasks.
Can a CV text field function as a competency model?
Not fully. A text field can describe a competency, but it cannot support comparison across candidates, matching against position requirements, or organization-wide analysis.
How does MintHCM store competency data?
MintHCM stores competencies as separate records with an assigned type, linked to the Skills, Knowledge, and Attitudes modules, and records competency ratings in a separate CompetencyRatings module.
Is a competency system only useful during recruitment?
No. The same competency records used in recruitment can later support periodic employee reviews and career development planning.
How does HR software rate a candidate’s competency level?
The system assigns a rating on a scale (e.g., 1 to 5) to a specific competency and links it either to a position or to an employee role, allowing the required and actual levels to be compared directly.
Does skills-based hiring eliminate the need for a CV?
No, but it changes its role. The CV remains a starting point, while the key decision relies on a structured assessment of specific competencies rather than the experience description alone.
Sources
Job Outlook 2026. National Association of Colleges and Employers (NACE), 2026.
Skills-Based Hiring: A Practical Guide for HR. AIHR, 2026.