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Career Insights

The Skills Gap and a Tight Labor Market are Transforming the Pre-hire Process

August 8, 2022

Holly Garner

Employers are partnering with third parties to filter applicants in innovative new ways

It’s no secret that today’s tight labor market, reflected in the much-discussed Great Resignation, has shifted the employee-employer dynamic. Employees are prioritizing roles that offer growth and development opportunities, and are willing to hold out for positions they feel will provide them with those opportunities. Yet even with the workforce balance tilted in favor of talent, there remains a meaningful skills gap to overcome. Keeping up with advancing technology, hiring for hard-to-fill positions, meeting diversity, equity and inclusion (DEI) targets, improving retention rates—all these major challenges are pushing employers to take more active and innovative roles in hiring well-prepared employees and upskilling their current workforce.

As a result, the need to reconcile the skills deficit with nurturing talent has created a new market opportunity: pre-hiring solutions. It’s a term that refers to a fast-growing group of third-party companies that help employers with more prescriptive pathways for attracting, filtering, and developing talent before those individuals are hired. A range of pre-hire programs is gaining recognition for successfully creating intensive tools for developing talent, and for showcasing it in a way that’s useful for job candidates and hiring managers alike.

Pre-skilling the candidate pool

Take Ramped, an innovative skills-based hiring platform geared towards early-career job-seekers. More than 100 hiring companies on the platform provide Ramped with feedback on the most critical skills needed for success in specific roles (e.g. Tech Sales, Recruiting, Financial Advising, etc). This feedback goes into the creation of self-paced upskilling content and assessments for job-seekers that simulates those critical skills. That helps job-seekers who come to Ramped get company-specific and industry-specific guided career pathways and functional job simulations that ‘pre-skill’ them to become viable candidates for the specific positions to which they are applying. What makes this a win-win is that employers who hire from this candidate pool can have confidence that applicants have the relevant skill sets, filtered by the employers’ own feedback.

Third-party vetting

Curated job boards are also seeing an increase in popularity. These boards can use certifications and credentials to vet candidates before the employer even looks at them. One of these is One Ten, an online career marketplace with a mission to hire, promote, and advance one million Black job-seekers who do not have a four-year degree into family-sustaining careers over the next 10 years. The platform seeks to close the opportunity gap by enabling candidates to activate profiles based on their competencies and skills, search jobs, and then apply. Additionally, candidates gain access to a plethora of certificates and credentials from a variety of partners, across a broad spectrum of credentials. 

Kaplan is innovating in this area, too, constructing a pipeline program with a large national not-for-profit for students interested in the financial sector. Students commit to taking a Securities Industry Essentials (SIE) credential preparation course, and are given tutoring support and wraparound services such as coaching, advising, tutoring, and mentoring, and ultimately finish the course and take the SIE exam. Once they pass, students are granted job interviews with partner employers who intend to hire those who pass the interview process. For the employer, there is no pre-hire investment around marketing, recruiting, etc., and the candidate has a clear pathway to employment.

People today are less willing to invest in education or training without a clear understanding of the monetary return.

Direct partnerships to source talent 

Companies are also looking to innovative companies like Open Classroom, which partners with employers to expand their onboarding processes into apprenticeship programs that combine on-the-job training with online, project-based learning and mentorship. This approach effectively opens up the talent pool to include people who possess the aptitude for a particular job but lack some of the hard skills and training. That makes it easier to fill positions, diversify the workforce, and expand economic opportunities for people who can’t afford to take unpaid internships.

Part of what makes this growing attention to the pre-hire process effective, and necessary, is workers’ increasing focus on immediate return on investment. People today are less willing to invest in education or training without a clear understanding of the monetary return. So even as the labor market continues to evolve, we may continue to see increasing numbers of workers choose to take educational paths that lead directly to gainful employment.

There will still be a place for all kinds of more traditional degrees and credentials, of course. But more employers will surely see the advantages of working with specialized partners to develop and hire new talent quickly. That means those  alternative pre-hire paths are only likely to expand.

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