Skills-first is the new buzzword in human resource management and it’s raising eyebrows because it turns traditional recruiting on its head. In the past, the emphasis was on qualifications and experience. With skills-first, it’s the things people are good at (problem solving, manual dexterity, attention to detail, negotiating – the list is long) that get priority.
Implementation of skills-first HR is in its infancy but it’s gathering momentum for a few reasons. In January, Aarushi Singhania, a specialist in education, skills and learning at the World Economic Forum, concluded that skills-first is the key to worldwide economic opportunity and the global democratisation of jobs.
Closer to home the practice is getting attention because it’s a quicker way of finding someone who’s a good fit for a job and it also provides a methodology for organisations shifting their attention from external hiring (which is becoming increasingly difficult due to skills shortages) to developing in-house talent.
Skills-first is also proving effective at matching people to the anticipated long-term commercial needs of a business while it also works well to identify how those with competency in one field could be redeployed to another within their organisation. For example, an employee with a facility for numbers could be redirected from a dwindling job in accounts to an in-demand role in data analysis with appropriate training. This saves time and money on a new hire and offers career progression to an existing employee.
With the lifespan of skills continuing to fall, the building and rebuilding of employees’ capabilities needs to be a priority
In 2022, some 40 per cent of companies recruiting on LinkedIn used skills assessment to fill open roles (an increase of 20 per cent over 2021) and Singhania says that, “These employers were 60 per cent more likely to find a successful hire compared to those not relying on skills as part of the hiring process.”
The Learning & Development Institute, a 3,000-strong professional body founded here in 1969 to provide continuous professional development (CPD) to those working in the sector, has been keeping a close eye on what’s happening with skills-first. It recently commissioned a report on the subject from DCU associate professor John McMackin and Prof David Collings of Trinity College.
“In the past, the focus was on competencies and traditional styles of training and development, and while some of those approaches are still fit for purpose, we wanted to look at what’s coming, and specifically at the opportunities and challenges presented by skills-first,” says the institute’s CEO, Sinead Heneghan.
“Organisations are facing prolonged and chronic skills shortages, and with the lifespan of skills continuing to fall, the building and rebuilding of employees’ capabilities needs to be a priority. In general, organisations are badly prepared to meet future skills needs, a fact borne out by our research which showed that while 98 per cent of organisations say they are planning on moving to a skills-based approach, only one in five are doing so in any structured or repeatable way.”
McMackin, who chairs DCU’s executive MBA programme and is attached to the work, psychology and strategy group within the business school, says that implementing skills-first is not going to be a walk in the park. It will require a change in senior management mindset, some reorientation of the HR function and, crucially, a lot of patience to develop a shared language to describe the existing skills within an organisation and to define those it might need in the future.
In an effort to progress the adoption of skills-first, the World Economic Forum has produced a taxonomy with a view to creating a unified language for global skills.
Trawling through the template offers an insight into just how broad and potentially complex it’s going to be for organisations to agree a set of skills that will help them to retain and develop in-house talent, while also attracting outside hires where required.
“There are a number of interrelated building blocks required to implement this approach, including a skills taxonomy, skills audits, external analysis and job architecture,” McMackin says. “We have identified a series of factors that will enable the transition to skills-first, but one of the most important will be senior leadership support, which is achieved through positioning the intervention as a business solution rather than a HR initiative.”
McMackin says early movers in the space are already doing things like dropping third level qualifications for some entry level positions (studies have shown no difference in productivity between those with degrees and those without) and moving away from selection based on a job description to hiring for skills instead.
In general, organisations are badly prepared to meet future skills needs, a fact borne out by our research
He adds that in a skills-first organisations, all employees are likely to have a personal skills profile that goes into a central pot where the number-crunchers can analyse the accumulated data to identify gaps and the skills that need beefing up to support growth.
“In reality, skills-first is not ‘new new’, as it’s not that far removed from the competencies framework that’s been around for over 20 years, but the game-changers this time round are technology and data analytics,” McMackin says.
“In the past, the information was there, but it wasn’t easily accessible. Technology means it can be accessed and used in a much more dynamic way. Moving to skills-first HR has all the characteristics of a transformational change programme, and our analysis suggests that the success or failure of organisations in navigating it will ultimately depend on many of the factors that determine the fate of most transformational change initiatives – leadership, culture and change management skills.”
