By Tracie Shepherd and Nanette Swarthout
The summer I (Tracie) turned 16 years old, my dad had big plans for me. That was the summer I got my driver’s license and he decided I was going to learn to change a flat tire. It was hot, messy, heavy, stubborn work, and I was amazed to wake up to so many flat tires – on the car, the pickup truck, the riding lawn mower – what were the odds? Despite my teenage attitude, he was determined that by summer’s end, I’d have another life skill tucked under my belt. That’s the word we’re going to wrestle with today – skill.
According to merriam-webster.com, skill is defined as “the ability to use one’s knowledge effectively and readily in execution or performance; a learned power of doing something competently,” whereas upskilling focuses on the acquisition of “more advanced skills.” It’s interesting, and perhaps a little ironic, that for all the buzz about AI, organizational leaders have a renewed focus on their people – helping employees “build critical skills and competencies,” and leaders readily admit “need for critical skills has never been greater” (Build the Workforce You Need Post-COVID-19 (gartner.com)).
What caused such emphasis on and need for skills? Human resource management has undergone massive shifts in the last two decades. Such upheaval has been driven by numerous factors including global economic shifts, evolving customer demands, and technological advancements. The most recent compounding factors were economic recession (2007-2009) and the COVID-19 pandemic (2020-2023), which sparked urgent employee upskilling and reskilling, which, in turn, only fueled the approach toward a skills-based talent-management strategy.
Although training can fill some gaps, organizations are discovering that they can’t wait until someone is hired to acquire or develop necessary skills and competencies. This is one reason why numerous businesses are building strategic partnerships with higher ed institutions like Western Governors University to influence what skills and competencies are taught in certificate and degree programs.
In many industries, a skills approach to hiring, and subsequently learning and development, is about priority, or at the very least, emphasis. Traditional hiring prioritizes candidates’ degrees, certifications, references, experiential pathways, similar job titles, etc. Skills-based hiring does not disregard those elements but rather prioritizes or emphasizes candidates’ enacted knowledge – their capabilities or skills, or what they can do with what they know.
A 2023 Gloat article contrasts traditional versus skills-based hiring and unpacks at least three differences:
- Decision factors – While hiring managers using traditional methods might make job-offer decisions based on experience or a preferred degree, those using skills-based practices allow the candidate’s skills to drive decision-making. While other factors may be secondary considerations, the ultimate deciding factor is skills.
- Processes – Skills-based hiring requires that requisite skills are identified for each role or similar roles, and then as the selection process unfolds, candidates’ skillsets are evaluated to determine the best fit. Candidate scores on job-knowledge tests or skills assessments are highly weighted.
- Internal and external candidates – Although externally recruited talent can offer fresh perspective and should remain an option, a skills-based focus primarily considers internal talent. Those already inside the organizational family are likely to have strong multidimensional fit; in other words, they already align with the culture, have bought into the mission, live by the core values, understand work processes, and have acquired skills that make them valuable assets to leverage somewhere in the organization.
Now that we’ve talked about what skills-first hiring is, why should organizations bother with it? Is it really any better than traditional hiring models? If skills-first hiring is indeed better, then organizational leaders should expect to reap some benefits. Below are some strong possibilities suggested by future-of-work specialist Nicole Schreiber-Shearer:
- Greater agility –Skills-driven organizations can advantageously shift more nimbly when change comes because continuous skill acquisition and refinement mean the workforce remains poised and ready.
- Minimize silos and enhance productivity – Have you ever been in a turf war at work, disregarded a customer need because it was somebody else’s responsibility, or failed to get updated on information critical to your responsibilities? If so, these are some characteristics of work silos and productivity zappers. A skills-first approach is a mindset that automatically shares talent, competencies and insight across the organization. A skilled workforce moves fluidly, and collaboration of cross-functional teams is the natural practice.
- Improved diversity, inclusion and employee engagement – A skills-based approach focuses hiring efforts on what matters. It reduces the potential for bias and illegal discrimination since managers are less likely to be aware of, preoccupied with or swayed by factors unrelated to a job. Since candidates’ skills alone are the main driver of hiring decisions, representation from minority groups will likely increase. Logically, organizations want to fully capitalize on their employees’ skills for competitive advantage, and an inclusive work environment makes that possible. Engaged employees are grown over time by managers and leaders who create an environment where their people do what they’re good at doing! A skills-driven environment fosters engagement – rather than wielding a job description to arbitrarily limit employee potential, employees are encouraged to seek out opportunities across the organization in which to leverage their potential.
HR leaders eager to craft a talent-management strategy that employs a skills-based focus should start with the critical step of gaining an accurate and thorough grasp of what skills employees already have, need now, will need in the future, and where the gaps are.
Reconfigure the entire selection process so that skills are elevated above other considerations –greater than references, degrees or job titles – and then thoroughly evaluate candidate skillsets with valid and reliable assessments. It’s also imperative to invest in a talent-management system (TMS) suitable for your organization, industry, needs and budget, one that provides access to real-time workforce and internal skills data. Another key step is to build comprehensive as well as micro-training and development plans that drive aggressive and transferable skills growth for all employees.
Tracie Shepherd, Ph.D., SPHR, SHRM-SCP
Senior Faculty, School of Business
Western Governors University
Tracie.Shepherd@wgu.edu
Nanette Swarthout, MBA, SPHR, SHRM-SCP
Senior Faculty, School of Business
Western Governors University
nanette.swarthout@wgu.edu