Skills-Based Hiring – Entering a new era

A new era of skills-based hiring is changing how organisations think about contingent workers.


There is a general new awareness of how resourcing and skills shortages impact on organisational growth and profitability. Ultimately, this shift has been guiding the transition from a Knowledge Economy to a Skills Economy. But while the change is being driven by what organisations need – it is also being fuelled by what a new generation of talent wants from their employers and their career experiences.

This means that talent acquisition teams are now faced with a unique strategic opportunity to hiring. Organisations are now focused on an approach that can fit both what the business needs and what the market demands.

What is the Skills Economy?

The Skills Economy is the recognition that having the right skills and talents in an organisation is, moving forward, the most critical factor in driving growth and profitability.

One of the challenges that organisations face is ensuring that they view the Skills Economy from the talent perspective. The economic benefits are clearly communicated. But fundamentally, the transition to a Skills Economy is being accelerated. This is not just by organisations, but also by a workforce who sees real benefits in it for themselves.

Accelerating the move to skills-based hiring

Organisations are adapting to meet the needs of the Skills Economy and there is a trend amongst many organisations to embrace a skills-based hiring model. With that change in approach comes a change in mindset too.

There is a new generation of workers who have been raised on remote working, a lack of job security, a sense of entrepreneurialism, lots of networking and plenty of side hustles. This generation is not interested in a traditional career ladder. They long ago accepted that job hopping is the norm and that the ‘job-for-life’ has disappeared. And even if it was still an option, they probably would not choose it anyway.

It is more natural for them to see their career as a pathway with grater flexibility. For example, by hopping from permanent to freelance, from project to project and from sector to sector. With the advent of the digital nomad, hopping from location to location is not unusual, either.

So, what does this mean for talent acquisition teams? It means the transition to skills-based hiring could be smoother than many anticipate. This is provided that they can tap into this new generation of contingent workers, understand their aspirations and shape development paths, work-life flexibility and broader career experiences, to meet their needs.

How does skills-based hiring unlock the potential of the Contingent Workforce

In 2023, research indicates that the contingent workforce grew globally by more than 50%. In 2024, it is expected to grow again by more than 30%. Adapting to a skills-based hiring model means having the infrastructure, supply chain and technology in place to make the most of a rapidly growing contingent workforce.

Employers moving towards a skills-based hiring model will increasingly rely on their contingent workforce. Greater emphasis on their contingent workers allows them to complement the core skills that they already have within the organisation. Where there are skills shortages, contingent workers can provide a cost-effective alternative. Where specialist expertise is required, contingent workers can step in to offer knowledge and implementation skills, particularly as technology evolves.

Those HR teams struggling to build solutions to meet organisational needs must deepen their engagement with the contingent workforce. As the Skills Economy grows and hiring models change to reflect it, organisations need to view the contingent workforce as a valuable asset supporting their growth, not as an additional cost eating into their profit.

A changing marketplace

The marketplace is changing to facilitate a deeper level of engagement between organisations and contingent workers. This is due to a global increase in demand for different skills within organisations, and contingent workforce solutions.

The role of technology is consistently transformative, helping organisations to manage their talent supply chain with more ease, manage workforce risks and compliance with more transparency, and use AI-based platforms to match skills with opportunities more fluidly. Technology is enabling those organisations who are adopting skills-based hiring to build their own talent communities, nurture direct relationships with contingent talent and bring their opportunities to a wider audience more quickly. The days of the hiring manager leveraging their relationship with a local agency – and paying over-the-top rates for contractors – are disappearing fast.


The conversation around the skills economy is happening at a global level. It is on the agenda of governments and CEOs. However, this should not distract organisations from the opportunity for them to be agile and fundamentally change how they hire. While skills shortages present challenges, a rare alignment of organisational need, market demand and fast-paced, agile solutions provision offers a clear pathway that forward-facing TA teams can navigate.

If you require any support in building your contingent workforce to embrace changes within the market, get in touch with us and we can help you!