Skills-based hiring

The lack of consistency in defining ‘what is a skill’ in our market makes this question difficult to answer. Both competencies and skills focus on behaviours that impact successful role execution, but there are three key differences between them:
1. Skills are typically more specific and task-focused compared to competencies, highlighting the practical abilities needed to perform particular work tasks. Competencies are broader and often relate to a combination of personality, attitude, ability, and approach.
2. Skills can relate to both the technical aspects (job-specific skills) and behavioural aspects (transferable skills) of a role, while competencies generally tend to concentrate only on the latter.
3. Skills can be developed through training, coaching, and deliberate practice. Competencies can also be developed, but because some competencies are often influenced by a person’s personality and values, they may require a fundamental shift in an individual’s mindset.

Role-based hiring focuses on filling specific job positions with candidates whose experience and educational qualifications match the criteria for those specific roles. In comparison, a skills based talent strategy in hiring moves away from a candidate’s experience and qualifications and instead focuses on the candidate. Skills-based hiring revolves around understanding a candidate’s abilities, competencies, and potential rather than just relying on their CV. In skills-based hiring, there may also be a focus on looking at their fit to multiple roles rather than a single specific job. This approach allows for greater flexibility and agility as organisations respond to change.

Every organisation is different so whether they should focus on skills-based hiring really depends on their processes, culture, and goals. The reason why a skills based talent strategy might be right for an organisation is that hiring decisions based largely on pedigree and experience are rapidly losing relevance in a dynamic job market. This means that focusing on who a person is – not just what they know or what they’ve achieved – is becoming a more effective approach in a world where jobs change constantly. Skills-based hiring features an agile, dynamic view of individuals which organisations find appealing because it supports future-ready strategies and internal mobility.

Adopting a skills-based hiring approach can be easier than you might first think. Competency frameworks and other structured hiring processes, which many organisations already have, are a solid foundation to build upon. Skills can build a layer of detail into your competencies, creating a more dynamic ‘fit’ profile for current requirements. Many organisations use the opportunity of implementing skills to reduce the impact of experience and qualifications on their hiring decisions. However, it’s the organisation that ultimately needs to choose which components factor into their talent decision-making process, depending on its goals.

One challenge with adopting a skills-based talent strategy for hiring is that ‘skills’ are not always defined clearly. In the past, the word ‘skill’ was often associated with specific technical capabilities. However, in this new era of skills based hiring, ‘skills’ are now used very broadly and include a wide range of individual characteristics. For example, some definitions of ‘skills’ include corporate attitudes, personality, interests, and motivation. Since this can be confusing, it’s critical for organisations to first define and clarify what ‘skills’ means for them. Only then can they begin to establish a skill-based hiring approach.

Both hard skills (or ‘job-specific skills’) and soft skills (or ‘transferable skills’) are important for the current and future needs of an organisation. However, in a world where hard skill requirements are expected to change frequently, soft skills are particularly important. Knowing if someone can do a specific job is only part of the equation. This means that soft skills are more likely to remain relevant over longer periods and throughout people’s careers. So, it’s essential for organisations to understand the following about a candidate to find their best-fit:
– How will the candidate perform on the job?
– Is the candidate able to grow within the role?
– Will the candidate be engaged and invested in the company’s success?

Organisations that have an established competency framework already have a strong starting point because those frameworks can be adapted for a skills-based approach. Competencies are a useful way to combine related skills together into ‘skillsets’. These skillsets are an effective way to organise skills into hierarchies within your organisation. Measuring competencies also ensures your organisation has a holistic view of person specifications for specific roles, which helps consider relevant aspects of work behaviour – such as integrity or change orientation. In our view, a move towards skills based talent management doesn’t mean a move away from competencies. It simply means not prioritising candidates’ educational achievements and experience during recruitment.   

Organisations are recognising that if they focus on people’s skills, rather than their qualifications and experience, they can identify and place talent more effectively to fit changing needs. Skills based hiring also allows organisations to access a broader, more diverse talent pool because they’re not restricted to traditional, fixed career pathways (e.g., degrees).

Mapping skills across roles, projects, and career development pathways means organisations can flexibly deploy talent in roles that match their skillsets, instead of deploying people based on their job title or seniority. Similarly, integrating skills data into workforce planning, learning and development, and internal mobility systems can help organisations create a strategy for flexible and future proof skills-based talent management.

Talogy works with you to help you select and develop the right person for your organisation by focusing on long-term fit. With insights that allow you to look beyond the skills for ‘right now,’ we create a complete picture of someone’s skills potential that will help them and your organisation to adapt and thrive in the future. Our team of expert talent consultants partner with you to understand your needs and identify which skills to assess to develop a skills-based hiring process tailored to your organisation and its goals.

Approaches to skills-based hiring are evolving rapidly and gaining momentum across industries. Here are four key trends likely to drive the evolution of skills based hiring in the future:
– Powering skills-based hiring through Artificial Intelligence: AI can help to identify skills required for roles, skills held by candidates, and support upskilling suggestions for new hires.
– Multi-role matching: Candidates can be assessed and matched to multiple potential opportunities that fit their skillsets across different organisational functions or departments, which enables organisational agility.
– Identifying skills gaps with analytics: Organisations can build a picture of a team or function’s available skills, using analytics and data dashboards to help identify skills gaps.
– Skills micro-credentialing: There is likely to be more focus on employees obtaining independently verified, digital certifications relating to job-specific and transferable skills. These can then be paired with hiring assessments to identify key talent with the right skills.