Skills First – what is it and what does it mean for organisations?

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98% of company executives say they plan to move towards a Skills First approach to HR.

Do we even know how to do it ?

2023 is European Year of Skills according to the European Commission. Who knew? Not us – until we read this interesting research published in July 2023 by Skillnet Ireland and the Learning & Development Institute (L&DI) on why a Skills First approach may be a better way to tackle the HR challenges facing organisations.

It’s a 52 page report (!) 😀- here are our key takeaways:

Let’s start with the basics.

What is a Skills First HR approach?

Rather than focusing on years of experience, industry knowledge and qualifications which are the typical criteria organisations look at when writing job descriptions and evaluating suitability for an opportunity, a Skills First approach identifies the key skills needed to complete a project/opportunity and hires for those skills. CVs are reimagined as Skills Profiles or Skills Passports to make it easy for employers to see what skills candidates are bringing to a role. Skills incorporate both hard skills (technical abilities) and soft skills (human capabilities).

Are we all on board? Not yet.

According to a recent study by Deloitte while 98% of company executives say they want to move towards a skills-first approach, only 20% of companies were currently using a skills based approach in any material way.

Why are organisations even considering Skills First?

Two of the key reasons identified in the research are:

  • Lack of skills supply and difficulty in finding these skills – companies need a better method of keeping track of what skills are in the organisation in the first place and where the skills gaps are. You don’t need to hire outside the organisation if you know the skills are already there.
  • The rapid pace of change in skills particularly in the technology, AI and analytics areas. What was cutting-edge two years ago is probably mainstream now. To keep up with the pace of change and the unrelenting introduction of new skills, organisations need to be able to analyse and track how the usefulness and relevance of the skills currently held in the organisation will be impacted. The World Economic Forum estimates that the half life of a skill is 4 years, meaning that the value and usefulness of the skill will be halved after 4 years. If you don’t have clear data for what skills you have, how can you evaluate the risk of them being less impactful or even obsolete. You are in unknown unknowns territory. Not a great place to be.

What can organisations do about it?

  1. Identify what the required key skills are for your organisation. List them by role, by project, by business area, by geography – whatever makes the most sense for your business
  2. Carry out a Skills Audit / Skills Inventory. Once you know what skills you need in the business undertake an audit to figure out what skills you already have in your organisation. Identify the gaps and areas of key strength. Of the 116 respondents to the survey completed by the Learning and Development Institute and Learning & Development Skillnet, 36% of companies were already piloting skills audits or had completed them in some parts of the organisation.
  3. Ask your employees to complete a self-assessment of their skills. Some organisations are using Talent Cards or Skills Passports – a digital resource providing employees with skills prompts based on their business are where they can select the skills they think they have and how they would rate their level for each. This could be incorporated into career growth conversations with your employees.

Hilt works with organisations to help their employees identify their skills to put a plan in place for career growth.

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