Within the next five years, 23% of jobs will change, while the core skills of 44% of workers’ will alter, according to The Future of Jobs Report 2023 from the World Economic Forum. So, it’s no surprise that many organizations are shifting away from traditional recruitment, with its focus on formal education and work history, to a skills-based hiring approach.
Moving to a skills-based model can help organizations adapt faster as new challenges and opportunities arise. By identifying best-fit candidates based on skills and potential, organizations will find it easier to plug gaps in the tight talent market.
However, change is about far more than simply giving extra weight to the capabilities listed on someone’s résumé. A genuine skills-based talent strategy will be holistic and dynamic — factoring in someone’s potential, career development, and rapid advances in the marketplace.
Here are three hallmarks of a skills-based organization:
Related content: Learn more about how to “Retain, reskill, and hire your global workforce with deep-learning AI” with Eightfold and SAP SuccessFactors to support your skills-based talent planning needs.
No. 1: You identify the skills you need for tomorrow
Do you want new employees to thrive right away and improve over time? Hiring for skills is five times more predictive of job performance than hiring for education and two times more predictive than hiring for work experience, according to McKinsey.
But it’s essential that organizations avoid using the sought-after skills of the past to define future needs. When jobs need filling, it’s a mistake to dive into your jobs library, find the closest match to your current requirements, and then simply tweak old descriptions to accentuate the skills element. Sure, you’ll be hiring for skills — the ones you needed yesterday.
The better approach is to use future-ready solutions, like a talent intelligence platform, that will provide insights into rising and declining skills. Using AI, talent intelligence can analyze millions of anonymized profiles in the marketplace today and uncover trends. It can then update the job taxonomy for you based on your likely future needs.
No. 2: You select people with potential in mind
It’s tempting to simply take your new job description and hunt for candidates based on skills. But you may find the number limited, especially in today’s tight talent market. The people you need may already be working for you or found in unexpected places.
With AI-powered talent intelligence solutions, you can massively expand the pool of quality candidates. AI will assess people based on their core capabilities and also take into consideration their adjacent skills and potential. For example, someone may have highly transferable skills from a completely different role, or one of their adjacent skills lends itself to a niche area that’s high on your skills list.
Talent intelligence can present you with a far greater pool of candidates. It can find matches among existing employees, contingent talent, candidates previously turned down, and those who might be overlooked because they lack the traditional qualifications. With a little encouragement, these could be your star performers of tomorrow.
No. 3: You know how to flex your organization
A skills-based talent strategy will have a profound impact on the shape of your organization. You may need to redefine departments, recalibrate roles, sunset outdated skills and roles, and invent new ones as you create a workforce ready for anything.
A greater focus on the skills you need can also drive workforce development across roles. You can build plans for training programs, workshops, online courses, and on-the-job training so you can retool teams and individuals for new challenges.
Another good idea is having an internal talent marketplace. Here, you can give employees a taste of new opportunities and spot the early signs of potential through side projects, gig assignments, and peer connections. The SAP SuccessFactors Opportunity Marketplace is a great example of how this can work.
Focusing on talent and transition will help you boost engagement and retention rates. In fact, skills-based organizations are 98% more likely to retain high performers, according to Deloitte. People can fulfill their aspirations without needing to move to a new employer.
Skills readiness today keeps you ahead tomorrow. Becoming skills-based is essential for organizations to stay ahead in an increasingly competitive environment. But it’s not a set-and-forget strategy. With the right solutions, you can keep pace with change — putting everyone in your team on the front foot, ready for fresh challenges, and enjoying work at the top of their game.
For more information about what Eightfold and SAP SuccessFactors can do for you, contact us.
About Eightfold AI and SAP SuccessFactors: Together, SAP SuccessFactors and Eightfold AI help customers drive more effective, forward-looking talent strategies. By connecting the comprehensive foundation of enterprise and employee data in SAP SuccessFactors with the Eightfold Talent Intelligence Platform, organizations can find and recruit the right talent faster, accelerate employee development and growth, promote internal mobility, and drive the organizational agility needed for future business success.