Many organizations are turning to skills as the foundation for building their talent strategy. With skills at the center of your talent strategy, leaders plan around the organization’s skills and needs, candidates are evaluated on skills, and employees are enabled to grow and develop skills critical to the organization’s success. In doing so, companies gain access to a richer and more diverse candidate pool, improve employee engagement through internal job mobility and growth, and facilitate more agile team-based work that drives business outcomes.
The first step to a talent strategy centered on skills is often to adopt a skills-based approach to hiring. This hiring model has soared in popularity in recent years, with 73 percent of employers saying they used some form of skills-based hiring last year, up from 56 percent the year before, according to a recent survey. With skills-based hiring integrated effectively across the organization, the natural next step is to extend the skills-based model across the entire employee lifecycle and ask yourself: How will we promote these new employees? How will we enable their development? And how will we think about filling roles internally?
Regardless of where you start, a talent strategy founded on a skills-based model can accelerate the organization’s ability to anticipate, react to, and plan for transformational change. It can be hard to know how to initiate this journey, but a few steps can help you leverage a skills-based approach to keep up with the rapidly evolving needs of your organization.
1. Document each employee’s skills and skills needed for each role.
Create a live-time skills repository for every employee in your HRIS system. For every role in the organization, capture and keep the skills required for each role up-to-date. This will unlock lots of opportunities to hire, grow, and promote based on skills. When you are considering whether to promote an employee, you can evaluate whether their existing skills are a match for the new role. When creating their own development plans, they can look at the roles they want and decide which skills to acquire. When you are looking to fill a role, you can look for a skills match inside the organization before turning to external candidates, creating career movement and retention through internal growth.
By understanding the skills you need and the skills employees have, you can also create programs to develop new skills, allowing employees to grow in their careers at the company and rewarding them for the skills that are critical to the organization’s success. This creates a culture of continuous improvement closely tied to the company’s goals. It also improves retention and engagement, as employees who see good opportunities to learn and grow are 2.9 times more likely to be engaged.
2. Leverage technology to support a skills-based approach at scale.
There are a lot of tools out there that solve for elements of a skills-based approach, including skills inventory, skills matching, skills-based evaluation and performance management, and more. AI is playing an increasingly important role as an accelerator of the skills-based approach to talent management, enabling companies to plan for evolving skill needs, track workforce skill levels, match the supply and demand for skills, and foster skill development. Leveraging the advances in technology, including AI tools, can lessen the workload associated with the skills-based approach.
Consider, for example, the consulting industry, which relies heavily on people to deliver value. Firms like Propeller leverage multiple integrated tools to have employees update their skills consistently, identify the skills needed for upcoming projects, and align employee skills with project requirements to constantly move talent into the most critical roles. It also enables the firm to see which skills are in high demand and conduct workforce planning around hiring and developing the emerging skills they will need in the future.
3. Ensure a successful roll-out of the skills-based approach.
Many leaders and the employees who report to them need to be convinced that moving to a skills-based approach is worth the effort it will require. They may be accustomed to traditional hiring and talent management practices, which have long relied on college degrees and previous work experience as a proxy for skills. It can also feel overwhelming to move to a skills-based approach. It isn’t as easy as flipping a switch; instead, it will require you to take a holistic, systematic look at your entire employee lifecycle and integrate skills into every touchpoint.
Start by investing in change management to demonstrate the benefits and ROI of skills-based approaches and fuel adoption. This can help convince leaders that the shift aligns with the organization’s values and long-term goals and help employees see the value of a skills-based approach to their development and long-term career growth. A pilot with one function can help you demonstrate business value, ensuring that you have the business engaged in championing it before rolling out a skills-based approach on a larger scale.
Skills are far from static. In every industry, you must keep up with a highly dynamic and changing landscape in which unique job skills have an ever-shorter lifespan. In fact, executives surveyed recently said that nearly half (49 percent) of the skills in their workplace at the end of 2023 will be outdated by 2025—and their own skill set is no exception.
That means that the skills needed within an organization will be constantly evolving. Every employee must continually grow and adapt their skills—both for the role they are currently in and planning for their next role. Organizations that create comprehensive talent strategies built around skills will increase engagement and agility and establish a competitive advantage in their ability to hire and develop the skills that will drive the company’s most critical initiatives forward.