Dustin Burgess | March 27 2023 |
Why aren’t more organizations successfully transitioning to a skill-based hiring approach to talent acquisition? There are numerous benefits to doing so, from faster fill times and expanded talent pools to increased diversity and improved talent retention. And according to a recent McKinsey study, hiring for skills is five times more predictive of job performance than hiring for education.
Business leaders have taken notice, with 98% of executives planning on moving more toward becoming a skills-based organization, and 90% actively experimenting with skills-based hiring approaches now, according to Deloitte research. But despite the enthusiasm for the concept, fewer than one in five organizations are adopting skills-based approaches to a significant extent across the organization, in a clear and repeatable way.
Why the disconnect between aspirations and reality? Common challenges include:
Let’s look at four key steps your organization can take to successfully transition to a skill-based hiring approach and realize significant hiring talent acquisition and retention benefits.
The first step is to know where you’re starting from. What skills do you have in your organization across your entire catalog of job descriptions, business units, and locations around the globe?
It sounds straightforward enough. But historically this has been a Herculean manual effort, and the inability to establish this baseline has hampered efforts to effectively implement a skills-based approach.
Today, AI-powered technology is changing the game, enabling much more efficient analysis of tens of thousands of job descriptions and sophisticated matching techniques.
When competing for talent in a global market, having missing skill requirements can result in “mis-hires” that are costly to the company. This is why it’s important to examine the skill inventory findings and add skills to job descriptions where appropriate.
Here’s how it works. First, you need access to a “key” – a massive data set of tens of millions of job postings to associate the most common skills for each job description based on the taxonomy. Next, AI-driven technology is used to quickly evaluate a job description, parse out and rank a list of skills for that description, match it to the database, and identify missing skills that are most associated with this job.
Including non-critical skills in a job description can drive longer fill times, unnecessarily inflate price points, and decrease diversity. This is why, as part of the analysis outlined in step two, it’s critical to also look for skills included in job descriptions that are NOT included in the typical “industry description.” You can then revisit these descriptions and remove the skills that aren’t truly necessary.
This optimization process should also include scanning the organization’s entire job catalog to identify redundant roles. It’s not uncommon for large companies to have two different job titles that have the same underlying skill requirement. Streamlining these roles reduces inefficiency and can also help decrease job parity and pay equity issues.
Now that you’ve optimized your job catalog and taxonomy, you can use your skills-based hiring data to drive more effective talent acquisition, retention, and workforce decision-making. Opportunities include:
Effectively implementing these four steps requires data, technology and know-how, but it’s worth the effort: Organizations that embed a skills-based approach are 107% more likely to place talent effectively, 98% more likely to retain high performers and 49% more likely to provide an inclusive environment according to Deloitte research.
Magnit is uniquely positioned to help organizations overcome common barriers to adoption and successfully deploy a skills-based approach by leveraging its:
If you’re interested in learning more about how Magnit is helping organizations implement winning contingent workforce programs globally, please contact a Magnit representative at email@example.com.
Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.