Today’s hiring world is facing plenty of changes, and the strategies we use for recruiting are changing, too. The rise of AI technology could be a solution to today’s hiring concerns, but it’s just one part of the puzzle. The other part? An ongoing shift to putting skills at the forefront.
A Shift Towards Skills
Kaizen HR is seeing a growing body of research indicating an increasing disconnect between employees’ skills and their jobs – or at least their jobs on paper. In a 2023 PwC survey, 35% of employees said they have skills that aren’t recognized from their qualifications, job history, or job titles, while 27% say that employers tend to focus too much on job histories and not enough on actual skills. These misalignments have practical implications, ranging from “mere” frustration – which can soon tumble into employee disengagement and lowered productivity – to increased turnover risk.
A skills-first talent strategy, in contrast, allows recruiters to hone in on candidates with the real-world, practical abilities necessary to excel in a given role, which expands your pool of available talent. It also works to better align employees’ job duties with their actual skills and strengths—even if they’re not apparent on paper—which in turn can produce better business results. This approach is particularly valuable in high-level executive positions where specific skills, such as strategic thinking, leadership, collaboration, and problem-solving, are critical for success.
By prioritizing skills, companies are slowly shifting emphasis away from one traditional qualification marker: degrees. Research from the Harvard Business Review and labor-market data company Emsi Burning Glass found that, between 2017 and 2019, employers reduced degree requirements for 46% of middle-skill positions and 31% of high-skill positions, with “managerial occupations” as one of the fields most affected by this change. Instead of viewing a degree as a default indicator of desired skills, companies are putting more emphasis on actual, demonstrated competencies.
The benefit of this approach is multifaceted, not least because it may open the door to hidden talent pools and non-traditional talent who may not have a formal degree but would be an exceptional fit. This, in turn, can alleviate the pressures of a tight labor market by viewing a wider pool of candidates. The key is to ensure that these candidates still have both the “hard” technical skills and the “soft” social skills necessary to succeed.
So the next question, naturally, is: how do we do that?
Implementing a Skills-First Hiring Strategy
Every recruiting strategy will look a little different and emphasize different things. Still, a few key actions can lead to great results for your company. These include:
- Identify the core skills for each role. Start with the most crucial question: which skills are essential for a given position? Is it a business-oriented leadership role? A high-level HR exec? These skills should cover specific, demonstrable abilities alongside social and emotional intelligence, aka “soft skills.”
- Utilize skills assessments and structured interviews. Skills assessments, such as practical tasks, simulations, or problem-solving exercises, can help evaluate skills even in the absence of formal accreditations. Similarly, structured interviews can target candidates’ skills to ensure a clear and well-rounded evaluation.
- Invest in upskilling and career development. As noted in the Harvard Business Review, companies have been investing millions of dollars into “future-proofing” their teams through upskilling, continuing education, mentorship, and other career development support. Building a reliable internal pipeline with the skills you need is a hedge against turnover and the ups and downs of the labor market.
AI could also elevate skills-based hiring strategies. Strategy + Business recently spoke with Shay David, the CEO of Retrain.ai, an AI platform specializing in talent management and development, about how his company’s tools are designed to identify skills (and skills gaps).
“It’s able to scan many different information sources, such as job boards or LinkedIn. And then, it’s using an AI technology called NLP (natural-language processing) to be able to understand text—plain English text or plain Hebrew text or any other language—and to be able to capture the skills information from that. So, in essence, we developed two main technologies. One is a big knowledge graph that understands the relationship between roles and tasks, and skills. And the second is a language engine that is able to take normal text and be able to map that into that graph. Once you have both of those components, then you can ask a lot of questions about the data and understand it in a dramatically more granular and actionable way.”
The technology developed to address this allows for AI-powered, broad-reaching data analysis to capture and apply knowledge about necessary skills in a way that drives successful recruiting. In contrast with other AI uses, which may lead to fears over humans losing jobs to algorithms, this application of AI focuses on helping people maximize their potential and helping companies pinpoint where they need new skills and how they can best leverage each employee’s strengths.
This hopeful, future-forward outlook is the kind of thing that could transform HR and recruiting. As David puts it, “The solution in our minds is to help [people] tap into the same skills platforms so that they can understand what are the skills that are 21st-century skills, and how they could find training pathways that are going to give them the path back to full employability.” That’s a future we like!
By Rose Dorta
Are you a high-performing leader or believe you have the potential to tackle a more challenging role? Would you be interested in career opportunities that are seeking these attributes?
I’d love to chat with you and answer any questions that you have. Email me, Rose Dorta, Managing Director of Kaizen HR Solutions, here.
