Skip to main content

How Do Businesses Uncover The Skills They Need To Succeed?

Businesses are struggling to find the skills they need to be successful. Despite a tightening economy, the job market is still robust – with the lowest unemployment in more than 50 years in the U.S. (3.4% as of January 2023) and of all time in Europe (6.1% at the end of 2022). How can HR teams better attract and engage talent with the key skills they need in such a competitive environment?

We recently did a study called Navigating The Changing Talent Landscape, where we surveyed 713 business leaders and held roundtable discussions with senior HR professionals and industry experts. When asked about their biggest talent challenges, 54% of our respondents said that “increasing skills shortages/harder to find the skills they need” was a current challenge.

Worryingly, less than two thirds of those we surveyed think leaders in their businesses understand where the skills gaps are (60%) or what skills they already have in the organization (58%) to a great extent.

There is also a related issue with meeting the skills needs of the future. Less than 60% of those we surveyed think leaders in their businesses understand what skills they may need in the future (56%) “to a great extent”. This was even lower in larger organizations (54%).

The digital skills gap or the ‘digital divide’ is widening. Consultancy UK reported in Q4 of 2022 that half of businesses are struggling to compete due to skills shortages.

How can leaders understand the gaps if they don’t have accurate skills data to reflect what skills their employees currently have and what skills they develop over time? And how can organizations be proactive with hiring if they aren’t able to predict the skills they will need in the future?

Start with a skills-first hiring strategy

A skills-first approach means looking at people through the lens of what they can already do, and what they could potentially do, in order to cast a wider net and make better, fairer hiring decisions. Managers are realizing that they may be overlooking high-quality candidates if they only focus on the top universities, years of experience, or the company names on a candidate’s resume.

68% of the business leaders we spoke to think focusing on a person’s capabilities and competences (skills), more than their formal education and time spent in a previous job, can better support business growth.

46% of those we spoke to believe skills-first hiring expands their talent pool and helps create a more inclusive talent pipeline. 43% think it can help them more effectively address skills shortages or gaps that exist within the business, and 39% believe it will create more resilience in the business.

skills first hiring

According to McKinsey, resilient companies have an advantage over the competition. A culture of resilience built on skills data allows companies to adapt to the changing market conditions, while also enabling the rapid redeployment of talent (with the right skills) to where they are needed most.

Creating common definitions around skills, organizing the data appropriately, and applying cutting-edge technology to match people with work are the key components of a skills-first talent strategy, but it begins with a better understanding of skills.

Understanding skills and skills data

Before you can find the skills gaps that are left unfilled, you must first understand the skills you already have. Organizations need a smart skills taxonomy where disparate HR systems can automatically connect and communicate with one another – removing the room for error and that hassle that comes with manual mapping.

Companies that invest in the right HR technology can ensure that their skills data remains up to date without any time consuming manual effort. With an AI-driven tool, employers can infer skills that people could easily learn based on what they already know. AI can also help recruiters and hiring managers understand the levels of proficiency each person has around a particular skill. Once you have that understanding, you can then create a dynamic job architecture.

The end of the traditional “job”

It’s not enough to look at people through the lens of skills – you must also start thinking about jobs in terms of the work to be done – not a list of static requirements. You must deconstruct the idea of the traditional “job” and instead, look at them by the skills needed to do the actual work.

84% of the organizational leaders we spoke to told us it is more important to focus on skills rather than traditional job roles. “Unbundling the job”, as Forrester calls it, helps to break down silos and hierarchies – helping businesses become more agile and resilient.

This can look very different depending on the type of organization or industry you are in, but unbundling the job may include turning elements of those “jobs” into short-term projects or gigs, and turning your focus to the actual problem to be solved.

By looking at existing employees and potential candidates with a skills-first mindset, you create a common “currency” within your business, which makes acquiring talent and developing workers a much easier task. The key is to use a tool backed by explainable AI, to ensure users can see the components that were taken into consideration in the decision-making process – so there’s no confusion about how an employer came to a particular decision.

Be ready to welcome cultural changes

When we asked business leaders what needed to change within organizations to enable a skills-first approach to talent management, 54% said that there needs to be a mindset shift among leadership and hiring managers.

Changing how managers and business leaders view “work” is a transformation project in and of itself. An important part of that transformation is deploying more objective assessment methods in the hiring process. Businesses must consider each individual’s existing skills, as well as their potential to learn. If your recruiters still have to manually sort through resumes and CVs to identify only those who match a job description exactly, you are surely missing out on highly skilled talent without even realizing it.

This can also cause a serious DE&I issue. With such strict criteria, there’s no doubt that candidates are simply being overlooked. And whether we like to admit it or not, everyone has at least some level of unconscious bias. So when recruiters are evaluating candidates manually, there’s a greater likelihood that they are prematurely eliminating candidates based on their own bias (that they might not even realize they have).

But when skills are the focus, and ethical AI is used to automatically identify the candidates or applicants who would be a good fit for the role, the entire process becomes much fairer and more equitable.

However, a skills-first approach goes beyond looking at just external candidates differently. It also involves looking at your existing talent differently. If you say that you are hiring for potential, you must continue to nurture an employee’s potential – for as long as they are with your company.


There are many benefits that come with deploying a skill-first approach to talent management. But some of these benefits are particularly needed in the current economic climate and talent market. Achieving talent resilience and agility is top of mind for virtually every CHRO and business executive. But building an agile workforce that can adapt (to whatever market conditions come next) is next to impossible if you don’t have the proper tools or technology.

Download the report, Navigating The New Talent Landscape, to see the full data from our study.