This is the sixth in a ten-part series on Skills-based talent.
Today’s blog discusses the implications and challenges of implementing a skills-based talent acquisition strategy. Shifting to skills-based recruiting can be a significant shift for recruiting professionals, though it has the potential to improve organizational agility, workforce diversity and planning, job fit, employee attraction, and long-term retention.
What is Skills-based Recruiting?
In traditional hiring practices, hiring managers open job requisitions to fill vacated positions or, after having successfully negotiated to add headcount to their organization. Job postings typically focus on qualifications, degrees, experience, previous job titles, or scope of responsibility. Skills-based recruiting prioritizes candidate search and selection based primarily on skills and abilities. This can extend to non-traditional labor pools, such as non-degree holders or contingent workforce segments, broadening the talent pool available in tight labor markets. In more mature skill-based organizations, talent acquisition may extend as an arm of work planning. Once work has been identified, it can be decomposed into the skills required to perform the work. Management can then determine how best to strategically source the work (which skills are best sourced internally vs. externally, onshore vs. offshore, upskilled in real time vs. handled by AI or automation, etc.). Work candidates could then be evaluated based on their proficiency or demonstrated capability of target skills.
AI technologies are now available that can correlate workers’ capabilities with their potential to acquire and apply new skills relevant to the job, regardless of educational background or past job experience. AI engines can be trained on vast worker profile databases who self-identify as experts in a field to aggregate the adjacency of skills, experiences, and training workers take to develop these skills – and create algorithms to scan and select for them. After hiring, the company can quickly build onboarding to train them with the specifics required to perform the skills in their particular environment. Such a change in the paradigm for recruiting brings several new implications and challenges to consider.
- Skills Assessment in Recruitment: Skills-based recruiting begins with a rigorous and systematic assessment of candidates’ skills. This might involve skills-oriented job descriptions, skill-based tests, practical assessments, simulations, or competency-based interviews to ensure a better fit for the required roles. It incorporates a more holistic evaluation of a candidate’s skills, achievements, and potential contributions to the organization. The organization aligns its talent acquisition strategy with skill needs – actively seeking candidates with the required skills.
- Focus on Potential in Selection and Onboarding: Hiring in a skills-based organization may prioritize assessing candidates’ capabilities, growth potential, and willingness to learn rather than just matching them to specific job titles or relying on past experience. This can lead to a more diverse and dynamic workforce.
- Skills Framework: Skills-based organizations maintain detailed skills inventories, taxonomies, or ontologies that outline the skills and competencies needed for each role and service offerings within the company. This map is a reference point for work planning and matching candidates with job requirements.
- Talent Pipelining: The organization may proactively build a talent pipeline of candidates with specific skills, even if there are no immediate job openings. This helps ensure a steady supply of skilled candidates when positions become available.
- Diverse Skill Sets: By valuing skills over rigid job titles, the organization is more open to candidates with diverse skill sets, experiences, and backgrounds. This promotes diversity and inclusion within the workforce.
- Employer Branding: Emphasizing a skills-based approach can enhance the organization’s employer branding, attracting candidates seeking a progressive and forward-thinking work environment.
- Talent Retention and Engagement: Employees are likelier to stay engaged and committed to an organization that grows their skill sets. Also, where their skills are valued and utilized effectively, this reduces turnover and enhances talent retention.
Implementing a skills-based career management infrastructure can offer some unique challenges.
- Skill Shortages and Talent Scarcity: In rapidly changing industries or specialized fields, skill shortages or talent scarcity with specific critical skills may exist. Finding and retaining employees with particular expertise can become challenging.
- Addressing Non-traditional Labor Pools: Evaluating candidates from non-traditional labor pools brings new risks in validating potential skills. Additional steps may be needed to validate the proficiency of skills or the potential to attain them, as traditionally, recruiters have relied on their familiarity with standard degree programs or job titles to evaluate the context and rigor of skills identified on job applications. There are additional challenges in regulated job markets where the ability to practice may rely on industry standards, external credentials, or licensing.
- Designing objective skills assessments for recruiting: Accurately assessing a candidate’s skills and competencies can be challenging. Objective measurement of skills requires well-defined criteria and evaluation methods. In some cases, determining the value of certain skills may be subjective and open to interpretation, leading to potential biases and disputes. Obtaining robust data to articulate existing skills, target proficiency levels, skills-based evaluation methods and implementing the necessary technology infrastructure can be challenging and resource-intensive.
- Applying Skills Sensing Data: Despite recognizing the importance of skill-based recruiting, leaders face significant challenges in identifying the specific skills that will be needed. Leaders may struggle to predict skills gaps, emerging skills, and skills of the future. Some organizations leverage AI technologies that collate internal job postings, trends in work staffing, or external market data to help identify emerging patterns in skills required for future work.
- Difficulty in Skills Mapping for New Roles: When new roles or emerging skill requirements arise, it may be challenging to map and identify the appropriate skills needed, as these skills may not have established standards or certifications yet.
- Cultural Shift: Transitioning to a skills-based recruiting model may require a cultural shift within the organization and buy-in from hiring managers and decision-makers. Recruiters may require training in new methods and tools for searching, evaluating, and onboarding new talent. As in other areas of skills-based talent, it may require aligning closely related talent processes, such as skills-based compensation packages or career paths, to realize the benefits of skills-based talent acquisition fully.
Stay tuned for our next blog on the Implications of a Skills-based Talent Strategy – on Organization Design.