On July 28th the government announced a major package to support young people to gain the skills and experience they’ll require to enter the workforce. The initiative aims to support the development of skills that local employers require, along with connecting training to viable career pathways, and build a stronger, and more relevant link between education and work.
This aligns with a shift we are already seeing within organisations to focus more on skills development, and broaden the capability of employees to grow their careers internally within organisations. Initiatives like this should further drive this shift over time by shaping a population entering the workforce with a portfolio of skills to offer rather than just specific work experience. It will establish an expectation that careers are about skills, and not just limited to climbing a vertical ladder of roles.
It’s an opportunity not to be missed. Creating a harmonious workplace, where people are valued for their skills and contribution is likely to prevail, over those that don’t offer skills development. Organisations that lack clarity on career pathways may miss opportunities to maximise the use of these skills, and are likely to suffer higher rates of attrition as talented people look elsewhere for career opportunities that maximise their skills.
Whilst taking a skills based approach as a way to create wider talent pools and create greater career opportunities for employees is the direction of travel for the future, there are also compelling reasons for businesses to start that journey now rather than wait.
Better hiring decisions
Focusing on skills in the hiring process can reduce mis-hires where assumptions are made that job titles and experience will translate into competence. Removing the bias that can come from what appear to be “the right” job titles can lead to a greater focus on the actual skills needed to do the role, even if their work experience isn’t traditional. This approach can be particularly effective in industries undergoing change where job titles may not keep pace with how roles and skills requirements change.
Greater agility
Understanding the skill set of your employees, not just within the context of your organisation, but alongside skills they have acquired in other aspects of their lives or from other roles, can help with current and future resource planning. It can support quick re-deployment of resources where needed, for example, to speed up the forming of project teams. This reduces the reliance on hiring external talent to fill gaps, and develops transferrable skills within an organisation.
Mapping skills across a workforce can feel daunting, but not if you engage your employees in the process. PwC have engaged colleagues to document their own skills, which then connect to a learning system that can help shape their development. Alternatively, a platform like Innecto’s Pathfinder platform has ready built skills taxonomies and functionality built to automate the population of skills.
Increased diversity
There have been many studies to show that greater diversity can lead to better business outcomes. McKinsey in their Diversity Matters report found that organisations in the top quartile for ethnic representation were 39% more likely to outperform compared to those organisations in the bottom quartile. Companies with over 30% representation of women on executive teams are significantly more likely to outperform financially. Shifting the focus from past experience to skills can lead to greater diversity of talent as it values the skills needed rather than how they were attained.
Extended employee lifetime value
Boston Consulting Group in their research with Lightcast back in 2023 found that people hired based on skills are promoted at a comparable rate to people hired based on more traditional criteria, but they are more loyal to their employers and have a 9% longer tenure than people hired on traditional criteria. This aligns with research from ADP that found that the percentage of employees leaving their organisation due to lack of career opportunities is increasing. Broadening hiring criteria and creating lateral and diagonal career opportunities, rather than focusing solely on promotions, can improve employee retention. This helps retain valuable knowledge and experience while reducing the costs and disruption associated with turnover, such as project delays, burnout, and temporary cover expenses.
In conclusion, shifting to a skills based approach can have significant business advantages providing an edge in a highly competitive and evolving world. Technology such as the Pathfinder platform not only supports in surfacing these skills but provides an engaging way for employees to own their development and explore ways to grow their career within your organisation which may not have been otherwise visible to them.
Discover how Innecto's Pathfinder platform can help you identify critical skills, create meaningful career opportunities, and build a more agile, engaged, and future-ready organisation. Get in touch with our team today.
