Human Resources

FAQ: Skills-First Approach to Talent Management

July 25, 2023
8 minutes

Frequently asked questions about skills-first approach

Skills-first approach is growing in popularity. The world is rapidly changing due to emerging technologies, climate change, political shifts, impacts to globalization, pressures on supply chain, and more. Skills-first is an emerging approach to build more competitive organizations with greater agility and adaptability. 

Let’s dive into some of the commonly asked questions about skills-first approach to talent management, its benefits to organizations and how to overcome some of the most common obstacles.

What is a skills-first approach to talent management?

A skills-first approach to talent management puts employees’ skills at the focus of how the organization runs. In a skills-first approach, organizations build and keep up to date an inventory of every employee’s skills. Skills are the foundation of roles within the organization, how work is assigned, how talent moves within the organization and how decisions are made.  There is an emphasis on continuous learning to nurture specific skills that align with employees’ responsibilities, aspirations and evolving needs of the organization. 

What are the benefits of a skills-first approach?

A skills-first approach offers several advantages for businesses.

  • Alignment: More closely match employees’ skills to their job requirements
  • Competitiveness: A more competitive organization that is constantly updating skills to match the demands of the market and technological advancements
  • Skills gaps: Constant attention on skills gaps and addressing those gaps with continuous learning 
  • Talent mobility: A more mobile, versatile and resilient workforce because transferable skills are known so talent can quickly be deployed based on changing needs
  • Future proofing: Ongoing succession being fostered

How does a skills-first approach differ from a traditional job-first or qualifications-based approach?

In a traditional job-first or qualifications-based approach, employers primarily focus on candidates' formal education, previous job titles, and experience. An employee’s job informs where they are in the hierarchy, their compensation, to whom they report, and their career trajectory.

 There is an emphasis on where a skill was developed, more so than on the presence of the skill and its transferability. 

A critique of the job-first approach is that it can act as a barrier for some people to access employment opportunities. While a skills-first approach focuses on the presence of a skill and its transferability, a qualification-based approach considers where the skill was developed. This, in turn, leads to a ranking order in terms of places where skills development happens like academic institutions, past companies and organizations where the person volunteered. A qualification-based approach also ignores, or at least downplays, skills acquired outside of professional settings. 

A skills-first approach looks beyond these factors and places greater weight on an individual's specific abilities, competencies, and potential to grow. This allows organizations to diversify their talent pool and consider individuals from non-traditional backgrounds who possess the right skills but may not have conventional qualifications. It invites more people into the labour market and equips them with the skills to grow over the long term.

How can organizations identify the essential skills required for various roles?

Identifying the skills required for a role is ideally a collaborative exercise between Human Resources and the People Leader of the role. Human Resources, and Talent Acquisition more specifically, should have a sense of the external market. Talent Acquisition should be keeping pace with the demand for skills and the supply of them on the market. Meanwhile, the People Leader should understand the skills requirements for the role and the ideal proficiency level for each skill. Remember, a skills profile for a role is agnostic of the employee holding the role today. The skills for the role is not a sum of the employee’s skills profile. Rather, it should answer the question of: What do we need this role to accomplish in the organization? The employee in the role may have a skills gap or upskilling opportunity. That can be addressed through formal learning, mentorship or some other training.  

How can a skills-first approach impact employee training and development?

A skills-first approach places a strong emphasis on continuous and rapid cycles of training and development. A skills-first approach identifies an individual's skills gaps. The importance of that skills gap can be assessed because  some skills gaps are more detrimental than others. Then, a skills-first approach can power personalized learning paths to address those gaps. In this sense, training programs become more targeted and effective, leading to a workforce that is highly skilled and adaptable, ultimately benefiting the organization's performance.

What role does technology play in implementing a skills-first approach?

In order to effectively and efficiently execute a skills-first approach, an organization needs a modern and integrated HR tech stack to manage this program. These are the key technology platforms and should pass data between each other. 

  • Human Resources Information System (HRIS) - this is the single source of truth of employee data. This houses employees name, email address, position in the organization hierarchy, job title, department, employment status, etc. When information is updated here, it is passed to the other systems.
  • Learning Management Systems (LMS) - cycles of continuous, personalized and rapid training demand vast amounts of learning content. While some training content may be so specific to the organization that it must be home-authored, other training content should be from trusted training partners like Coursera, Udemy, etc. Choosing the right LMS is its own undertaking, ensuring that the content offering matches the skills development needs of the employees with the right depth of content. 
  • Skills intelligence platform - a modern tool that is pulling from a unified skills library, like tilr, is required to house the skills data. Trying to build a skills inventory in a spreadsheet or any other pen to paper exercise is futile. It quickly becomes untenable as the exercise is socialized across the organization for collective input. A skills intelligence platform should offer:
  • Security
  • Permissions
  • Unified skills library
  • Metrics and insights
  • Market data and trends

How does a skills-first approach impact employee engagement and retention?

The data continuously supports the thesis that organizations that invest in employee development appreciate the greatest employee engagement and retention rates. The skills being demanded of the labour market are constantly changing and employees know that. Employers that invest in their skills development and help them keep pace with the change are returned with greater loyalty because they are being offered a path for career development and advancement. 

Can a skills-first approach be integrated into performance evaluations?

Ideally a skills-first approach is integrated into performance cycles. By rooting performance conversations in the metrics of the skills required for a role versus the skills an employee has, it is a more objective discussion. Further, when every role has a skills profile for it, employees and their Managers can more easily discover and map career paths within the organization. And in turn, create development plans based on those required skills. Assessing employee performance based on outcomes is not a comprehensive and meaningful assessment.

What are the potential challenges of adopting a skills-first approach to talent management?

Implementing a skills-first approach requires different effort for different organizations. But it can often be met with some friction because it requires a change in mindset and processes. Let’s look at some of the common challenges organizations face.

  • Leadership buy-in - An effort of this scale needs championing from the top. Having executives share the vision is critical for scaling a skills-approach through the organization.

  • Employee participation - Employees are a key stakeholder and their participation is critical. They may be required to share their skills and be more open about their aspirations. There could be reluctance around prioritizing this and transparency around those items due to fear about how the information could be used.

  • Resistance to change - Resistance to change is a common human reaction when established processes or workflows are disrupted. Employees may be comfortable with the existing system and show reluctance to embrace a skills-first approach.

  • Employees don’t want to learn new skills - Some employees may resist learning new skills, especially if they perceive it as time-consuming or irrelevant to their current roles.

How can organizations get started with a skills-first approach to talent management?

If a skills-first approach is something your organization wants to take on, the next question can be, ‘Where do we start?’. There are can be a few different starting points that could make sense for different organizations:

  • Pilot group: Identify a pilot group to run a skills-first approach. This pilot group is ideally a group of employees that are excited to participate and their leadership is committed to the program. Build the skills profiles for each of the employees and their roles, conduct a skills gap assessment and connect employees to personalized training. Track and measure the impact of this approach over some period of time to develop a business case. Apply this model to the rest of the organization.

  • Low hanging fruit: A skills-first approach can be applied to different stages of the employee journey. Break down the employee journey and identify where opportunities exist to test skills-based approaches. Hint: Hiring and learning and development are often the low hanging fruit.

  • Build an organizational wide skills inventory:  The other option is to take on a skills-first approach head on. Build out the organizational wide skills inventory. Collect people’s skills profiles and move forward from there.

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