Skills based hiring in Australia is gaining serious momentum, and if you’re an employer trying to navigate today’s talent market, it’s worth paying attention. With skills shortages continuing across key industries and roles evolving faster than job descriptions can keep up, focusing on what candidates can do (rather than where they studied or how many years they’ve clocked up) is becoming a smarter, more practical way to hire.
According to the Hays 2025 Skills Report, 85% of hiring managers experience skills gaps in their teams, and 86% have turned to skills based hiring to help close them. These gaps are especially pronounced in sectors like manufacturing, engineering and other technical fields, exactly the areas where precision, experience and problem-solving matter most.
So, what’s behind Australia’s shift toward skills based‑ hiring?
- Skills shortages aren’t going away
Australia’s labour market is still feeling the strain. Jobs & Skills Australia reports that 29% of all assessed occupations remain in shortage, particularly in technical and regional roles. And thanks to rapid digital transformation, the nature of work is shifting too, so it’s no surprise employers are rethinking how they identify talent.
- Employers are getting better hires
The data backs this up: 91% of Australian employers now use skills based methods, making Australia a global leader in adoption. Employers report major improvements — fewer mis hires, more diverse teams and stronger overall performance. Rather than relying solely on CVs or academic pathways, employers are putting practical skills, task based assessments and real world experience at the centre of hiring decisions. And it’s working.
- Candidates actually prefer it
It’s not just employers who benefit. Seven in ten Australian jobseekers say they prefer a skills based hiring process because it gives them a fairer shot, especially those who may have taken nontraditional routes into their careers. In a crowded job market, that fairness goes a long way in attracting and retaining talent.
Why this approach works so well for technical roles
If you’re hiring in engineering, manufacturing or product design, you already know credentials don’t tell the full story. A candidate may have all the right letters after their name, but can they troubleshoot a design issue under pressure? Collaborate with cross functional teams? Adapt when machinery, processes or technologies evolve? Skills based hiring closes this gap by helping you:
- Access a wider, more diverse talent pool, including overseas specialists and career‑changers
- Reduce time‑to‑hire, which is especially important when 45% of employers report difficulty filling roles
- Future‑proof your workforce, building adaptable teams who can evolve with the industry
This approach shows you what someone can deliver, not just what they’ve done.
What employers can do next
If you’re considering adopting (or strengthening) a skills based hiring approach, here are a few simple steps to get started:
- Rewrite job descriptions to highlight skills, not just qualifications
- Introduce practical assessments, such as task based exercises or portfolio reviews
- Train hiring managers to evaluate skills consistently
- Use data to anticipate future skill needs
You don’t have to overhaul everything at once; even small adjustments can make a big difference.
This isn’t just a trend — it’s the future of hiring
As demand for technical talent grows and employers feel the pressure to innovate, skills based hiring offers a more flexible, inclusive and effective way to build teams. It opens doors for candidates, reduces hiring risk for employers and ensures organisations are equipped for the rapid changes ahead.
If you’re ready to explore how skills based hiring could strengthen your workforce, RHL Recruitment is here to help. Get in touch with our Sydney team today and let’s build your next great hire together.
