In the fast-paced world of Financial Services, the key to success lies not just in finding and hiring people – 51% of business leaders in Financial Services identify skills shortages as one of their biggest talent challenges – but strategically placing them in roles that drive business growth.
Unfortunately, many organizations within the financial services sector still rely on outdated Talent Acquisition (TA) processes, prioritizing factors such as previous job titles, years of experience, and educational backgrounds rather than honing in on the actual and potential capabilities of the candidate.
Reimagining recruitment in the Financial Services industry requires a shift towards skills-based talent strategies, including skills-based hiring. 78% of business leaders we surveyed in that industry think a skills-first approach to hiring, which focuses on a person’s capabilities and competencies more than their formal education and time spent in a previous job, can better support business growth in their organization.
“What we're seeing is that five to 10 years from now, the skills that we need are not always the one for one match that we have today.” – Art Lokerson, Wells Fargo
Skills-Based Hiring in Action
The process of skills-based hiring involves breaking down the work, identifying necessary skills, and evaluating who is best equipped to deliver.
In interviews, candidates would be asked to explain how they have (or would) demonstrate a particular skill. Employers would use objective assessment methods to establish if someone has the skills to succeed: rather than assessing them on “cultural fit” or other criteria where human bias can creep in.
As well as tweaking the requirements in terms of external hiring, there may be an internal component: looking at how you can reskill or deploy existing employees in order to fill gaps quickly and cost-effectively. Again, this would be based on objective data around people’s skills, likely adjacent skills, and potential.
So how does this information come to light? Most companies will have information about talent stored in different systems – and this must be turned into a centralized repository of skills data. Data about employees, candidates, previous applicants and alumni should be collected and enriched, and then kept up to date (this can be done dynamically with the right technology partners.)
You can then connect your jobs to the skills you have and need, with a (dynamic and contextual) Job Architecture. Consider bringing external labor market insights, to ensure your data set is as useful and useable as possible.
Together, this Skills Intelligence is the key ingredient that makes skills-based hiring possible.
Benefits of a Skills-Based Approach to Hiring
83% of our respondents in Financial Services agreed that skills-first hiring can better align the needs of employers and employees, making work work better for everyone.
A survey by Deloitte found that skills-first organizations were 57% more likely to anticipate change and respond efficiently, and 107% more likely to place talent effectively. 80% of executives surveyed said that making talent-related decisions based on people’s skills rather than their job history, tenure in the job, or network, would reduce bias and improve fairness.
Prioritizing skills over traditional factors reduces bias in the hiring process, leading to a more diverse and inclusive candidate pool. This is crucial in industries like Financial Services, where more diversity would certainly be welcomed.
Recognizing skills gaps and swiftly finding candidates with the required skills also enhances organizational efficiency and agility. This proactive approach contributes to cost savings and helps “future-proof” the business – which is ideal in an industry seeing rapid technological change.
Indeed, AI-powered HR tools can help Talent teams in Financial Services identify existing skills, define skill gaps, and find and nurture candidates efficiently.
“The leveraging of technology as a core part of our business is fundamental to how the bank evolves and meet the needs of our customers moving forward.” – Art Lokerson, Wells Fargo
It’s worth noting that skills-based transformation extends beyond recruitment to internal talent mobility, talent management, learning and development, and workforce planning.
It’s also important to remember that technology and data alone will not deliver skills-based transformation in your business. It requires an organization-wide cultural change in the way “work” is organized – and a willingness to look at talent, and talent-related processes, differently. Are you ready for the change?