A Focus on Skills: Talent Acquisition and Performance Management in a Skills Based Organisation: How to recruit and measure performance based on skills

The demand for certain skills is at an all-time high, leading to talent shortages where skill supply is low. Data skills are especially desirable, with almost half of UK business recruiting for hard data skills such as machine learning and programming. However, many organisations have struggled to hire for these skills over the last few years. With the War for Talent ever present, attracting top talent at speed has never been more important. Transforming the way in which we approach talent acquisition and performance management may offer a solution to the struggle to hire people with desirable skills.

Such a solution may come in the form of a Skills Based Organisation (SBO). This new operating model that puts skills at the centre of an organisation is gaining momentum. Individuals are no longer defined by the job they do and are instead seen for the skills they bring. 70% of workers say that this approach would improve their experience at work, due a greater visibility of opportunities and making job searching fairer. A skills-based approach can be used at multiple points throughout the employee lifecycle, from attraction and selection, to onboarding, to career development. Skills can be matched to evolving business priorities, resulting in scalable and equitable ways of working.

Three Elements of an SBO

• Moving away from Traditional Recruitment

Skills-based hiring is the practice of identifying and selecting candidates based on their relevant or adjacent skills, rather than experience. It addresses talent market shortages by tapping into talent pools that may have otherwise been overlooked. This practice uncovers “hidden talent”; groups of people who experience barriers when being considered for roles. When hiring for skills that are in high demand, organisations can broaden the criteria to include adjacent or foundational skills. These adjacent skills can then be developed into the sought-after skills. Recruitment in an SBO therefore increases opportunity across a more diverse pool of individuals, improving diversity, equity, and inclusion from the outset.

• Redesigning Selection and Assessment Processes to Focus on Skills

The negative impact on certain groups of assessments that fail to meet industry standards necessitates the importance of careful provider selection. The challenge lies in finding the right solution that not only indicates candidate potential effectively but also ensures time efficiency. When working with candidate volume, online skills-based assessments that meet industry standards can narrow the talent pool and successfully locate the best candidates. Novel assessments and using gamification can increase engagement through the candidate journey. Reliable, valid, and fair assessments ensure that the hiring process takes steps towards protecting diverse talent.

With a smaller candidate pool, a relevant task-based exercise can showcase the skills being assessed. This gives the candidate insight into the organisation’s ways of working, as well as the range of skills used in role. This increases transparency between the organisation and the candidate, extending the beginnings of a psychological contract. For the organisation, it is also an opportunity to assess technical skills and human capabilities. Hiring managers are trained to focus on a candidate’s skill potential, rather than the experience listed on their CV. Interviews have a human-centred core, sourcing talent based on skill and potential.

• Embedding a Culture of Learning to boost Performance
  

Organisations embracing a skills-based model prioritise internal talent recruitment through agile marketplace practices, such as secondments and skill-aligned projects. This fosters a learning culture, encouraging continuous upskilling for individuals to maximise development opportunities. As a result, this approach creates diverse career pathways beyond traditional structures, placing emphasis on development while meeting business needs and bolstering employee engagement. By tapping into transferable skills within existing talent pools, businesses unlock the full potential of this talent whilst bridging internal skill gaps.

When measuring performance, integrating skill development metrics alongside job performance is essential to instil and nurture a culture of learning. Employees dedicate time during their workday to upskill and apply newfound knowledge effectively. These measures are underpinned by skills-based performance management, driven by real-time skills insights. This ensures sustainable growth, propelling the organisation and its workforce towards continuous improvement and success.

Whilst this is a significant change for many organisations, it is evident that the need to shift to become an SBO is here to stay. Employees are beginning to seek new ways of working associated with adopting skills at the heart of an organisation, with evidence suggesting these changes can lead to enhanced hiring diversity and development opportunities. Becoming an SBO presents an innovative and agile solution, that can evolve in a way that aligns with organisational priorities and goals. Before embarking on this journey organisations must first ask themselves whether they're truly ready to adopt this transformative solution?