According to a recent Deloitte survey, companies in the US and abroad are already shifting to a new approach in hiring. The quantitative and qualitative research focused on how various businesses around the world are approaching the transition to skills-based structures, and whether they are implementing it. After surveying 1,021 workers and 225 businesses in various industries, researchers concluded that a new trend is now disrupting industries everywhere—the transition to skills-based companies. According to the study, both HR executives and workers have expressed a clear preference for this model over the traditional job-based method.
Given that both managers and employees seem to favor this new approach to work, the fact that skills could replace jobs in being the prime focus in hiring is not at all surprising. In fact, numerous companies have already started to imagine work outside the job. Not basing actions on job definitions, titles, or degrees might prove difficult for HR managers. 50.5 million people in the US quit their jobs last year, and numerous other problems have also plagued the industry after what is now known as the “Great Resignation”. However, adapting to this new trend comes with some important advantages.
The Advantages of Skills-Based Hiring
According to Marketing Consultant Jen Dewar, highly skilled employees will always be needed, and skills-based hiring can help organizations recognize, engage, and retain workers. Writing on the LinkedIn Talent Blog, Dewar mentions that skills-based hiring comes with essential advantages, such as boosting companies’ quality of hire, increasing their talent pool, promoting inclusivity, and even improving employee retention. In fact, LinkedIn studies confirm that organizations that practice skills-based hiring are 60% more likely to make a favorable hire than those relying on traditional constructs like job definitions, titles, or degrees.
A separate ManpowerGroup study demonstrates that 77% of employers are now reporting hiring difficulties. This makes skills-based hiring extremely attractive, especially because this new trend is thought to help organizations expand their talent pools. As Dewar demonstrates, skills-based hiring can be equally beneficial when it comes to promoting inclusivity. While workers from marginalized groups have historically faced lower rates of educational attainment and greater barriers to work entry, skills-based hiring is based on objective criteria. This can undoubtedly help companies avoid unconscious bias in the hiring process, and even help them add inclusivity as one of their core values.
Skills-based hiring is not only useful in acquiring new talent, but also in retaining employees. According to LinkedIn, workers without a traditional four-year degree stay 34% longer within a company than those with a degree.
First Steps to Skills-Based Hiring
The Deloitte skills-based organization study identified legacy mindsets and practices as the primary obstacle to transitioning toward a skills-based structure, with 46% of business and HR executives citing it as one of the top three obstacles. However, the survey also prompted researchers to outline four major steps to effective skills-based hiring:
Focusing on Skills Instead of Focusing on Tasks
Rather than defining work in terms of a specific job with a predetermined set of responsibilities, HR managers should focus on the required skills. To do this, they must first consider their company’s strategic objectives, then determine the work that must be done to accomplish those objectives and the specific skills this work requires.
Using New Technology to Analyze Candidate Skills
Recent advancements in technology have enabled companies to gain access to a deeper level of work skill data. By using AI-powered analytics and data, HR managers can better evaluate external candidates. This technology can also be used to assess the skills of all current employees.
Evaluating Workers Based on Their Skills, Not Job Titles
Rather than viewing workers as individuals holding specific jobs and performing certain tasks, HR managers should evaluate them as unique individuals with a diverse set of skills. This approach involves matching workers with the tasks that align best with their skill set. When using this strategy, HR managers would also need to match workers with the tasks that fit their individual interests, values, passions, and development goals, since people tend to be most productive when their work aligns with their personal values.
Focusing on Skills Beyond Hiring
In addition to matching workers with work based on their skills, companies should also focus on making skills a central part of their workplace practices, from hiring to career development. This strategy means placing a greater emphasis on skills and a lesser emphasis on jobs and titles.
Looking Ahead
Research shows that skills are undoubtedly becoming more important than job definitions, titles, or degrees in hiring. Moreover, companies seem to be making a rapid shift to becoming skills-based organizations that focus on individual abilities well beyond hiring, making them a central part of all workplace practices.
