The days when resumes and cover letters were the keys to unlocking dream jobs are over, with both employees and employers now leaning on alternative recruitment methods, says Wouter Durville.
87 percent of employers in the finance sector are now using a skills-based hiring method as their first choice for recruitment – this is above the average of 81 percent when compared to other industries. The high usage is being attributed to the rise of fintech firms looking for a blend of technical and finance specific expertise.
Eight in 10 finance employees prefer a skills-based hiring process, while 92 percent of finance employers are satisfied with the hires they’ve made through skills-based hiring in the last 12 months.
This is according to talent discovery platform TestGorilla, which has just released the third of its annual skills-based hiring reports, including a specific zoom in on the finance industry: ‘The State of Skills-Based Hiring 2024 in Finance’.
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The 2024 hiring landscape
The report sets out the hiring landscape of the finance sector for 2024, and shows it is getting tougher for both companies and candidates. 38 percent of finance employers state that it is harder to find top talent in 2024 compared to 2023, while 56 percent of employees say it is more difficult to find a job this year.
Hiring bias is slightly lower in finance than it is in other industries, with 29 percent experiencing unconscious or conscious bias during recruitment for finance sector roles. This is 2 percentage points lower than the industry-wide average (31).
Still, 92 percent of finance employers who use skills-based hiring are satisfied with their hires, and are therefore seeing improvements in employee retention, diversity and costs to hire above industry-wide average:
- 94% improved diversity (4% increase from the industry-wide average)
- 94% improved retention (3% increase from the industry-wide average)
- 86% reduced cost-to-hire (10% increase from the industry-wide average)
- 90% reduced mis-hires (no change from the industry-wide average)
- 81% reduced time-to-hire (no change from the industry-wide average)
Talent discovery platforms are increasingly demonstrating their efficacy in pinpointing individuals who possess vital skills such as effective communication, problem-solving, and incisive critical thinking. Such digital tools offer a fresh avenue for talent identification beyond the constraints of traditional hiring processes.
“Testing is definitely important, especially now in this age where the cognitive requirements for most tasks are increasing. That alone warrants an assessment tool measuring cognitive capacity. And then, of course, we need to test for specific skills that can’t be demonstrated in a resume, like coding.“ – Jonas Atil, Director of Recruitment at NexusHR.
Candidates taking advantage of the opportunity to show skills
Another major thread emerging from this year’s study is that finance candidates are showing a strong preference for skills-based hiring and enjoying greater success when application processes revolve around these recruitment methods.
Indeed, more than 80 percent of finance candidates say they prefer a skills-based hiring approach. While 87% of survey respondents said they prefer it because it gives them the opportunity to demonstrate their abilities.
“If you’re applying for a remote job, chances are you’re competing against hundreds, if not thousands, of other candidates for one position. It’s very easy to go unnoticed. But with talent assessments, I know I have a chance to show that I’m a great fit for the role.” – Joan Pelayo, marketing specialist candidate.
Drilling down into the industry-wide demographics, skills-based hiring methods are most popular among younger cohorts of candidates, with 92 percent of 25–34-year-olds preferring this avenue of recruitment. Meanwhile, among all age groups, 68 percent want to see organisations increase their use of skills-based hiring in the future.
Commenting on the changing employment market, TestGorilla CEO and co-founder Wouter Durville, said: “We are three years into producing The State of Skills-Based Hiring reports and the trend is undeniably clear – skills-based hiring is becoming the dominant and preferred recruitment method, not just for businesses, but for employees seeking new jobs.
“Degree requirements are not going away yet, with 59 percent of employers saying it is actually more important for candidates to have degree qualifications. But skills-based hiring methods are complementing and in many cases replacing traditional recruitment, and organisations that don’t give non-degree-holding candidates a chance to demonstrate their skills are in danger of missing out on an untapped pool of talent.”
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Wouter Durville is CEO and Co-Founder of TestGorilla.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
- Amelia Brand
- Amelia Brand
- Amelia Brand
- Amelia Brand
