June 27, 2018

The Skills Gap is Real - Skills-based hiring, not pedigree

By Joan Andrews, RTWBC

At a time when the skills shortage has never been more acute, can skills-based hiring help employers find hidden talent through objective measurement of skills?  Will employers agree to consider it?  BLS data indicates that there is a significant gulf between employer needs and the available workforce talent pool.  What is the source of the disconnect? 

The Skills Gap Reconsidered... 

The skills gap is real.  Employers are struggling to fill open positions with skilled workers! Yet, current economic data may lead to workforce solutions for both employers and job seekers alike.  The skills gap enables a company and job seekers not only the opportunity to identify in-demand skills, but also implementation strategies to achieve them. 
 
The May 2018 U.S. Bureau of Labor Statistics reports that:

 
This BLS data indicates that there is a significant gulf between employer needs and the available workforce talent pool.
 
What is the source of the disconnect? Do all unemployed people lack the skills sought by employers? Have educational institutions failed industry through outdated academic preparation?  Or, is it employer budget decisions to divest time and financial resources away from on-the-job training? The reasons seem to be endless yet the method of acquiring talent is not changing in any measurable, dynamic way.

A thought for employers and recruiters...

Given the skills gap, how are employers assessing those individuals who are actively looking for work and that will fill open positions?

Baby Boomers remember when employers hired employees and as part of the on-ramping process they underwent comprehensive “company-led training”.  This training could last weeks or in some cases months.  Today, in-house training has all but vanished. Consequently, new hirees miss the opportunity to refine the basic skills that may have earned them the job but are less than sufficient to perform as expected. Since 2000, technology has had a profound effect in the workplace resulting in a new set of employee success competencies and worker engagement strategies. Yet, business has been slow to make the necessary transition to catch up and likewise, job seekers are misinformed about the skills needed to perform the job. In sum, there is massive signaling problem.

Employers continue to search for ways to predict the qualities of a competent hire such as skills and aptitude.  Centuries-old hiring best practices to predict job performance historically consisted of general mental ability and integrity testing paired with a structured interview.  Today, hiring decisions are largely made based on pedigree.  Yet, employers are now learning that stacking degree requirements on top of template job descriptions to assess a candidate’s ability appears to be a far less effective evaluation method because it is failing to generate the caliber of talent they need.

Skills-Based Hiring

At a time when the skills shortage has never been more acute, can skills-based hiring help employers find hidden talent through objective measurement of skills?  Will employers consider it?

In Dismissed by Degrees, researchers at Harvard Business School, Accenture and Grads of Life contend that rising demand for a four-year degree for jobs that previously did not require one not only harms U.S. businesses, but also closes off critical career pathways for millions of middle-skilled Americans who could fill open positions. Yet, the study found that business leaders view college degrees as a “proxy” for both hard and soft skills, effectively shrinking the pool of viable candidates.  Core competencies often aren’t assessed until the final round of interviews, too late for non-degreed, skilled applicants who self-disqualified because of related work experience.  Moving from a degree and pedigree-based hiring process to a skills-based evaluation can help organizations build a sustainable talent pool.

Skills-based hiring is considered revolutionary; not every employer wishes to put themselves on the “leading” or sometimes referred to as the “bleeding” edge of change.  However, it would appear that the status quo will only continue to undermine economic growth, leave jobs unfilled and job seekers often underemployed.

Implement Change

Most recruiters will acknowledge that skills-based hiring is not an easy sell. Yet, it needs to become part of the culture - including the executive level, middle management, staff workers and HR - if change is going to happen. Technology positions appear to be an early adopter of skills-based hiring.  Well beyond where someone went to school, examples of their knowledge and coding skills can easily be evaluated during an interview or even before.  Certainly, an engineer can “draft” an example of their skills, nurses can be tested in a clinical (vs a paper-driven) environment and those applying for a role in customer service can be assessed in a work situation and not judged based on where they attended school.  
 
HR professionals, stop dusting off the old job descriptions and take the time to work with your business partners to assess the skills needed for a position.  Benefits of skills-based hiring include improved retention, employer satisfaction and a more diverse workforce.  This strategy, validated by a Gartner/Grads for Life study, takes time to learn but the evidence is there.   The ever changing role of work is the single most important determinant of candidate’s aptitude.

Solutions are both available and accessible.  Employers will advance their skills building when they invest in re-educating the entire hiring team, the recruiters, hiring managers, and senior leadership,as well as re-examining the applicant tracking system data (ATS).    The advancement and acceptance of online resources like Udemy, EdX, and Lynda have democratized learning to a great extent often providing mastery of skills without a college degree. Employers who embrace innovative forms of training will be successful in building sustainable talent pipelines...

For some organizations, the shift away from a university degree is taking hold. As more employers realize that skills are the currency for success in the new world of work, they can hope to bridge the skills divide.
 
Where does your organization fit into this shift?
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Ready To Work Business Collaborative, founded by a collective of Fortune 500 companies, is committed to working cooperatively to develop hiring best practices that target the long-term unemployed, under-employed, people with disabilities, military veterans, and Opportunity Youth. The RTWBC accomplishes this mission through collaboration, thought-leadership, and services that support employers who desire to serve these talent pools better.

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Ready To Work Business Collaborative works cooperatively to help employers develop hiring best practices that target the long-term unemployed, underemployed, people with disabilities, military veterans, and Opportunity Youth.

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