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5 ways a ‘skills-first’ approach unlocks access to future jobs

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Taking a 'skills-first' approach could democratize access to jobs.

Aarushi Singhania
Specialist, Education, Skills and Learning, World Economic Forum
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This article is part of: World Economic Forum Annual Meeting

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  • A 'skills-first' approach to talent management emphasizes a person's skills and competencies, rather than degrees, job histories and titles.
  • Focussing directly on skills, rather than how they've been acquired, could democratize access to economic opportunities and pathways.
  • The World Economic Forum has recently launched a revised version of the Global Skills Taxonomy to ensure a unified skills language globally.

The term ‘skills first’ is increasingly used to describe a new approach to talent management that emphasizes a person’s skills and competencies – rather than degrees, job histories, or job titles – regarding attracting, hiring and developing talent.

By focussing directly on skills, rather than on how they have been acquired, a skills-first approach has the potential to democratize access to economic opportunities and pathways to good work for many more people than traditional approaches.

For employers, a skills-first approach creates a significantly more robust talent pipeline and helps to address skills shortages. Indeed, 40% of hirers on LinkedIn used skills to fill open roles in 2022 – up 20% year-over-year.

These employers were 60% more likely to find a successful hire compared to those not relying on skills as part of the hiring process.

Here are five ways taking a skills-first approach can help recruit and sustain skilled talent:

1. Enable access to high-wage and high-growth future jobs

There is a big and increasing unmet need for talent for jobs of tomorrow – newly-emerging roles critical to our economies and societies – including, for example, 69 million teachers, 300 million new jobs in the care economy, and demand for workers with digital and green skills, which will significantly surpass supply in the next five years.

Taking a skills-based approach can help employers find non-traditional talent and help candidates to understand the skills they have and the ones they need to acquire. This information can also be useful for candidates to pursue a personalized learning plan for training, upskilling and/or reskilling as needed, preparing them to unlock a desired future job.

2. Gain access to high-potential, untapped talent in the labour market

Skills were not a big part of the conversation in traditional hiring practices. Candidates used to be hired based on their education qualifications and job histories as predictors of their likelihood to succeed in the role.

Skills-first hiring works within the reality that not everyone has the means or time to pursue higher education and at the same time doesn’t negate the university degree. Therefore, emphasizing focus on how candidates can demonstrate their skills to get the job done has proven to be effective.

In 2022, companies including Accenture, Apple, General Motors, EY, Google, IBM, Merck and PwC, among others, removed degree-based application requirements for several roles and opened employment access to non-traditional applicants.

"What matters most is that people – like organizations – remain resilient and relevant and hence employable over time. In today's fast-paced world, formal education, training or job experience acquired in the past have the potential to become obsolete very quickly, therefore we need to focus not on what people have done in the past but on what they are capable of doing in the future"

Judith Wiese, Chief People and Sustainability Officer and Member of the Managing Board, Siemens

3. Build employee trust, engagement and retention

According to LinkedIn’s Workplace Learning Report 2022, having opportunities to learn and grow is now the number one factor that defines an exceptional work environment.

Most industries have traditionally focused on offering training based on existing off-the-shelf training and development solutions to their employees. Today, industries and individuals need learning and development solution that are focused on helping individuals upskill and reskill based on business needs and their own needs.

In this regard, skills-based learning programmes are targeted to specific skills that matter to the future workforce. By investing in individuals' skills needs and aspirations, there is an expected increase in trust between employers and employees, which is a key enabler for employee engagement, satisfaction and retention.

"A skills-based approach enables organizations to upskill current employees, retain top talent by investing in their career development and attract a diverse pool of talented individuals from around the world. Organizations that focus on skills recognize that experience and knowledge come in many forms and will have an advantage in the global competition for top talent"

Jeff Maggioncalda, CEO, Coursera

4. Create future-proof talent pipelines and pathways

Traditionally career pathways have been linear, focussing on specific occupational fields ranked from highest to lowest based on level of responsibility and pay. Today, skills empower individuals to take charge of their careers, in terms of helping them decide for how long they want to stay in a current role, and how they want to leverage existing skills to transition into other roles within the same organization, or in other organizations and industries.

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The skills-focussed career pathway enables individuals to pursue vertical and horizontal mobility within the organization, including opportunities like job enhancement, dual career ladders, and accelerated or dialled-down career pathways, among others.

It offers the opportunity to take a stock of skills in their organization and exchange skilled candidates with other organizations based on industry needs and candidate interests, enabling the cross-industry movement of skilled talent.

5. Receive a holistic view of current and future skills needs

Historically, when business leaders carry out workforce planning, most of them have focussed on demand and supply of individuals for specific job roles, based on the assumptions that these job roles and their associated responsibilities, skills requirements, performance measurement and other specs would not change over time.

Using the skills-first approach, organizations will be able to develop a holistic view of the talent and skills they have today across functions, and job families and compare that against the skills they would need to achieve long-term business strategy.

By overlaying skills supply and demand across the whole organization, HR, line managers and business leaders can better understand if the business strategy is achievable, where skills gaps are prevalent, and what investment will be needed to make a difference.

“The era of managing labour and talent based solely on traditional degrees and linear career progression is over - it’s time to go all-in on skills. If organizations are to lead in this changing world of work, they must shift to skills-based talent strategies, embrace innovations like artificial intelligence and machine learning to power them, and support meaningful policies to scale them"

Aneel Bhusri, Co-CEO, Co-founder, and Chair, Workday

The World Economic Forum has recently launched a revised and interactive version of the Global Skills Taxonomy to ensure a unified skills language globally and is currently drafting a Skills-First Playbook in collaboration with PwC to help organizations, individuals and governments pursue skills-first practices to gain access to skilled talent.

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Forum InstitutionalJobs and the Future of Work
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World Economic Forum

May 21, 2024

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