Are you losing out on extraordinary talent?

10 minutes

Are you losing out on extraordinary talent?

One of the most unexpected developments of the pandemic is the widening skills gap organizations are grappling with. Even before the arrival of COVID-19, a considerable chasm existed between labor supply and demand, but with the acceleration of digital transformation around the world, the need for in-demand and new skills has simply skyrocketed. For many employers, competing in limited pools of talent is increasingly untenable. So how can they overcome this challenge in a talent-scarce environment?

One of the most unexpected developments of the pandemic is the widening skills gap organizations are grappling with. Even before the arrival of COVID-19, a considerable chasm existed between labor supply and demand, but with the acceleration of digital transformation around the world, the need for in-demand and new skills has simply skyrocketed. For many employers, competing in limited pools of talent is increasingly untenable. So how can they overcome this challenge in a talent-scarce environment?

More and more, companies are embracing a skills-based approach to hiring and redeployment. Instead of relying only on college degrees and work experience alone in their selection process, businesses are achieving hiring success by also focusing on candidates’ hard and soft skills. Doing so allows employers to expand the talent pool they need. And by providing training and development along the way, companies keep their workforce relevant and up to date to the evolving nature of their business.

A skills-based approach is more critical to today’s talent strategies than ever. According to LinkedIn data, skill sets for jobs have changed by around 25% since 2015, and this figure will double by 2027. In 2021, the network’s members added 286 million skills to their profile, a rise of 22%. This is caused, in part, by the acceleration of digitalization across all sectors.

Such a shift indicates organizations are emphasizing skills acquisition and development rather than just hiring their way out of the current talent scarcity. A growing number of companies are eliminating the requirement for traditional academic degrees all together; instead, they are seeking abilities and aptitude – qualities that leaders such as Elon Musk prioritizes in Tesla’s recruitment efforts.

Furthermore, companies realize they need to build their own skills rather than just simply look externally. According to a survey conducted by the Society for Human Resource Management (SHRM) and TalentLMS, more than half of companies questioned said they face a skills gap, and 50% say they are addressing it through training existing employees. In fact, two-thirds of HR managers say their company is increasing L&D budgets in 2022.

 

Alternatives to college

Today, there are more alternatives for workers to acquire the skills needed for a successful career. According to the OECD, the emergence and proliferation of “alternative credentials” mean workers can bypass traditional four-year colleges to competently perform the work performed in hourly and professional roles. These alternatives include certificates awarded by educational institutions and professional bodies; digital badges conferred to those who have achieved certain skills; and micro-credentials that consist of multiple courses but short of a full degree.

These alternatives demonstrate skills proficiency by program participants, and it’s a way for employers to be assured talent has the competencies for a specific role they need filled. More importantly, at a time when college enrollment is down markedly due to soaring tuition and questions of whether a four-year degree is cost effective, these different routes enable workers to get training without huge costs. And employers can more quickly source talent knowing these candidates can get the job done.

Additionally, by focusing on skills as a qualifier, companies can better redeploy workers within their organization. During the pandemic, numerous examples of people with transferable skills were able to find employment even when their jobs were lost due to lockdowns. For instance, flight attendants were retrained to be frontline healthcare workers when travel was grounded. Even now, the country’s largest coal miners’ union has called for retraining its members to work in renewable energy. Similarly, German automotive manufacturers are rapidly retraining their internal combustion engine employees to work in software and other electric car operations.

 

A different way of thinking

Skills-based hiring and redeployment may seem like a straightforward strategy for employers, but it’s not as simple as it sounds. Companies need to reconsider their traditional way of sourcing and screening for roles because many internal stakeholders will need to buy into such an approach. Hiring managers who historically have insisted on formal credentials may need to rethink job roles and the kind of talent needed to perform them. Recruiters will also have to become familiar with emerging channels of learning and development to determine which alternative credentials adequately prepare candidates for their roles. Additionally, the question of compensation parity needs to be addressed for workers lacking formal degrees but possess the right skills.

For many organizations, eliminating requirements for formal degrees has not actually resulted in filling jobs with non-college graduates, and this is a missed opportunity for opening up their talent pool. As the Harvard Business Review pointed out, eliminating college requirements has varied significantly from company to company, in part because some organizations are using college degrees as a measure of soft skills rather than technical competencies.

Should employers, however, eliminate degree requirements all together and simply specify soft skills requirements in job descriptions? Such a pragmatic approach would expand talent pools and create a more diverse and inclusive workforce at the same time. It would also help companies become more competitive in the labor market by making them more attractive as an employer.

Even so, a policy change alone won’t lead to transformative results without an accompanying change in talent management strategy. Human capital leaders should boldly articulate why a skills-based model can benefit all stakeholders through faster acquisition, a more diverse candidate slate and higher-quality hires.

As talent scarcity continues to deter business growth and as more talent look to alternative certifications and credentials, companies should take a closer look at a skills-based approach to recruitment and redeployment. By overcoming legacy thinking and ingrained hiring practices, businesses can ensure more effective outcomes in their talent strategies.

Want to ensure success for your skills-based talent acquisition and redeployment strategy? Consider these three critical questions and how you can win buy-in with the requisite resources for an effective rollout.

  1. Are internal stakeholders amenable to a skills-based approach? Without hiring managers and business leaders willing to change their requirements for college degrees, human capital leaders will struggle to bring about change. They will need to demonstrate the benefits by using labor market data and early recruitment wins.

     

  2. Is there a robust learning and development strategy in place? Candidates – internal and external – with skills closely aligned to open roles may still need additional training. The best skills-based hiring models are often supported by an effective L&D structure.

     

  3. How will you reset job descriptions and taxonomy? This may be one of the most challenging tactical tasks involved in this process and requires hiring managers to reconsider what are essential skills for a job and which adjacent ones can be adapted.

If you’re ready to explore a skills-based approach to hiring, Impellam Talent Consulting can help guide you. Our industry-leading talent consultants have all the answers you need to succeed. Find out more.

 

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