The traditional approach to hiring (or redeploying) talent relies on assessing people based on their experience, education, and previous job titles. But many businesses are now starting to embrace a skills-first approach to talent management: the notion of focusing on the skills needed for particular tasks.
Becoming a skills-first organization has risen up the business agenda. This means identifying the skills relevant to do the work, then matching people (with those skills) to the tasks at hand.
84% of business leaders think talent approaches need to reflect a focus on skills rather than traditional job roles. (Navigating The Changing Talent Landscape)
The beauty of a skills-first approach is that it can be applied across the full talent lifecycle. With a single currency and common language for assessing candidates (as well as employees and alumni), HR teams and management can really understand the human capital that their business needs.
Putting skills at the heart of your organization gives you many of the answers you need in response to the changing economic situation. It helps you become more agile and unlock greater productivity, while boosting diversity and enhancing employee engagement and wellbeing.
“I do think in the future, it is going to be table stakes to have a talent intelligence platform as part of HR. The future is really putting them into a cauldron of skills matching and then picking the best and the brightest with a skills-based approach.” – Elin Thomasian
‘Jobs’ vs. Skills: Why you need a unified skills taxonomy
Increasingly, it’s clear that we have been too limited in the way we look at work. Instead of trying to fit people to a fixed ‘job’, we should be focused on identifying what skills are needed to do the work. Forrester calls this ‘unbundling the job’: a more adaptive model to work, where elements of jobs are broken down into projects, gigs or tasks.
Rather than focus on ‘jobs’, we focus on the problem to be solved or the ideal outcome – and then find the people with the skills, interests and capacity to get us there.
A skills-based approach acknowledges that people are so much more than a job title. Or even one static job description. They have skills from previous roles, skills they picked up in other walks of life, and ‘adjacent skills’ that they could – with the right training – quite easily acquire. And they are keen to learn. As their skill sets grow, they can be deployed to new tasks or projects to meet business needs.
A skills-first organization is therefore one that is incredibly agile and well set up to meet the needs of a changing world, and demanding workforce. So how do you build one?
1. Create or enhance your skills taxonomy
Understanding what skills you have – the potential in your organization and wider talent pipeline – and the skills you need, relies first and foremost on a unified skills taxonomy. Your organization must clearly define what skills truly ‘mean’ in your organization (including soft skills, technical skills, and behaviors), and then connect this to a dynamic job architecture.
“Only 10% of HR executives say they effectively classify and organize skills into a skills taxonomy or framework—although nearly all (85%) have some efforts underway.” (Deloitte study)
The skills taxonomy needs to be clear, dynamic, and interoperable with other systems and platforms.
2. Manage your new taxonomy
44% of business leaders told us that “better workforce data” was needed in order to enable a skills-first approach to talent – and 42% noted “more automation of HR processes” was required.
This is where AI can help. With smart explainable AI tools, you can ensure skills are commonly defined and automatically connected between systems. AI can also infer what skills a person may have but not have listed; work out what skills they could potentially develop; and work out their seniority and proficiency, relative to industry context. Crucially, it can ensure people’s skills are updated as they learn new things – automatically.
Make sure your new job architecture doesn’t become stale in a fast-changing world of talent.
3. Start actioning valuable skills insights
A unified skills taxonomy opens up a whole new world of insights about your workforce – and your potential workforce. Understand where skills deficits are in the labor market. Shape your L&D strategy to re-train or upskill talent, in order to plug gaps. Compare what is happening in the external world and better prioritize acquisition activities, in order to build talent pools of those most-sought-after skills.
Skills intelligence sits at the heart of improved internal mobility initiatives, for example: where employees and opportunities are matched together in a Talent Marketplace. Better internal mobility programs could massively impact retention in a tight talent market – and it’s impossible without good data and systems.
Smart, explainable AI comes in here too. It can take the information about the skills of employees and use that to match them to suitable roles, or recommend training opportunities.
And it’s amazing for workforce planning. With always-up-to-date skills intelligence, organizations can quickly identify where they have what they need to address new business priorities, respond quickly to new opportunities or challenges, and ensure that they have the right people in the right roles at all times.
4. Connect the rest of your ecosystem
According to Deloitte, 63% of HR executives say they are using “skills-related technology embedded in core HR information systems” – but just 33% say they have a single source of skills data across the entire workforce. If you’re going to be making important talent decisions about people based on skills, then that skills data needs to be verified and valid.
Enabling talent agility requires combining capabilities across your talent tech stack – which may include an internal Talent Marketplace, Learning Experience platforms, your Talent CRM, an ATS, and so on – in order to connect talent supply to demand (skill needs and opportunities), on a continuous basis.
This combination of skills intelligence and talent supply, within a truly holistic approach that looks at non-traditional as well as traditional talent pools, is what will enable true talent agility. As part of a total workforce strategy, a skills-first approach offers access to a wider pool of skills and expertise, including contractors, freelancers and other non-traditional workers.
It’s a continued effort that is agile and iterative. People are motivated by the data that is leading them to new opportunities, they pursue those and build more experience, which leads to better data about people’s experiences, which feeds better matches between talent and opportunities in the future.
A skills-based approach means cultural as well as technological changes. The roles of managers and leaders evolve from managing employees to orchestrating work and skills through projects, tasks, gigs, or problems to be solved; they need to be prepared and empowered to share talent more freely in the organization.
Technology can work in the background to empower leaders to make better decisions with skills data. Employees too can get recommendations for new opportunities to upskill, within the flow of their work. The power of generative AI means that adopting the right technology for a skills-first approach doesn’t have to be arduous – it can be as simple as asking one question.
The question for leaders is: are you ready to embrace this change?