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.
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.
A skills-first approach offers several advantages for businesses.
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.
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.
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.
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.
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.
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.
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.
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: