By Cynthia Anaba
- At least 80% of companies are moving away from DEI goals in favor of skills-based hiring
- Companies committed to DEI goals rate their success at 30%
Citigroup is making a major change to its hiring strategy, scrapping its Diversity, Equity, and Inclusion (DEI) goals in favor of a skills-based recruitment model. The move aims to broaden the company’s talent pool by emphasizing candidates’ competencies over traditional diversity metrics. A recent survey found that more than 80% of companies have adopted skills-based hiring practices, a significant increase from previous years.
Why This Matters: Internally, Citigroup has faced challenges with workforce preparedness, particularly in risk, compliance, and data roles. An internal review found that skills gaps among employees contributed to regulatory issues, underscoring the need for a hiring approach that prioritizes competency over demographic factors. The company’s shift aims to ensure that new hires are equipped with the necessary expertise to navigate complex regulatory environments. Employers are making this transition to address talent shortages and remove barriers to employment, making the hiring process more inclusive and performance-driven. This shift reflects a broader trend across corporate America, where companies are prioritizing skills-based hiring to meet evolving workforce demands.
And even though there’s widespread commitment to DEI, only 30% of organizations rate their initiatives as highly effective. This has led some firms to rethink their approach. Citigroup’s move aligns with a growing trend among companies that are shifting away from explicit DEI targets in favor of a more meritocratic approach. The financial giant isn’t alone, investment firms like Azoria are now launching funds that exclude companies with race- or gender-based hiring goals, advocating instead for skills-driven recruitment.
Situational Awareness: Transitioning to a skills-first hiring model is not without challenges. Companies such as Chipotle have integrated AI into their recruitment processes to streamline hiring, but this has sometimes led to impersonal interactions and logistical issues. As companies continue to experiment with new strategies to build strong, diverse, and capable workforces, skills-based hiring may become the standard, reshaping the way businesses attract and develop talent.
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