Skills-based hiring vs résumé: How world’s largest book publisher, Penguin Random House, recruits

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Applying for a job is a really easy process. Despite the seismic changes to how we work, candidates for generations have been asked to submit their résumé and hope for the best.

But the practice is outdated and riddled with bias. 

Research consistently shows that in the few seconds it takes for a hiring manager to scan a CV they have already judged the candidate based on irrelevant (to the role) information like their name (with non-white sounding names at a disadvantage) and home address. 

Meanwhile, those with employment gaps or looking to make a side-step into a new industry are all too often overlooked.

Khyati Sundaram, the CEO of Applied, knows the feeling all too well. 

She founded the recruitment platform that reduces bias with techniques such as anonymizing résumés after her own CV was rejected over 100 times.

“It was just exhausting,” she tells Fortune. 

Sundaram started her career in banking for the likes of JPMorgan and launched her first failed tech venture Fosho in 2013, before rejoining the job market where recruiters weren’t a fan of her squiggly career. 

“They said I couldn’t get a banking job despite having done it for six years (but not for the last four years) because I was doing a startup job which according to them was basically a sabbatical,” she says.

With millions of jobs set to be displaced by artificial intelligence, it’s a conundrum Sundaram predicts many candidates will find themselves in—and one that employers could easily counterbalance by scrapping CV requirements altogether.

“In a society which is going to look so different with A.I., we really need to rethink what skills look like,” she says. Sundaram insists that experience will no longer be a relevant parameter to recruiters because certain jobs might not even exist.

“If that person—whose job has been lost to A.I.—sends their CV out in 20 years time, should we just bin it because they don’t have the experience for this new job? Or should we try to understand what other skills this person brings?” she adds.

How skills-based hiring works

Research shows that skills-based hiring is on the rise, with a 63% year-on-year growth, but the world’s largest book publisher, Penguin Random House, was way ahead of the curve.

As of 2021, the publishing house employed over 10,000 people across 20 countries—and anyone hired in the last six years has been asked to complete an anonymized skills-based test through Applied, instead of the conventional CV and cover letter requirements. 

An example of a skills-based test question is something like: “It’s 5 p.m. on a Friday and you have these five tasks to do but you can only do three, which would you work on?”

“That’s a situational judgment test, which allows us to infer the thinking process and the behaviors of the person,” Sundaram says. “That particular question is testing for prioritization and communication.”

The answers are then anonymized, randomized and rated by a panel of hiring managers to prevent any bias. 

By testing candidates on how they’d handle the actual day-to-day responsibilities of a role, employers are more likely to hire the best person for the job instead of being drawn by big names and snazzy titles.

As Sundaram points out, just because someone has listed on their CV that they’ve worked with the SEO team at somewhere alluring like Google, it doesn’t actually mean they know the ins and outs of search engine optimization to the extent that’s required for a role. 

“We are trying to make sure the test or the question is as relevant to the job as possible and that’s the reason that candidates love it too,” Sundaram says. “They see that it is really relevant to the role as opposed to writing and sending out the same cover letter, but having to spend 20 minutes tweaking it for every employer.”

It takes candidates longer, yet increases engagement

Even Sundaram admits that she’d intuitively assume that taking multiple skills-based tests would feel like more of a nuisance for candidates than simply blasting their CV at hundreds of roles. “But the data shows otherwise,” she says.

Applied has worked with over 700,000 applications and over half a million candidates, who Sundaram says have rated their satisfaction with the platform a solid nine out of 10.

“Every candidate who applies through us absolutely comes back and says, ‘I loved it because I was allowed to showcase myself—it was not just a piece of paper that I sent in a black hole and never heard back,’” she adds. 

Plus, for candidates who are often overlooked, skills-based testing finally offers them a fair shot at bagging their dream job.

For example, Applied data reveals that the number of women hired into senior roles increases by almost 70% when candidates were asked role-specific questions.

Of the 2,260 candidates they hired into senior roles following a skills-based interview, 52% were women. This is a 68% increase on the global average, where women account for just 31% of senior positions.

“So it is about equalizing the playing field making sure people have access to the workforce that would otherwise not be possible,” Sundaram insists. 

Plus, the data was equally as advantageous for businesses’ bottom line. 

Sundaram says that Applied closely monitors not only if the right person was matched for the role through retention rates, but also whether they are thriving in the job through promotion rates. 

The churn rate for candidates who have been hired by Applied is 7%, compared to the U.K. average of 17%. Meanwhile, it usually takes a candidate around three years into a new job to be promoted, versus one year for Applied candidates. 

According to Sundaram: “The proof is in the pudding.”



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