IT Careers: Does Skills-Based Hiring Really Work?
More organizations are moving toward skills-based hiring and getting mixed results. Here’s how to avoid some of the pitfalls.
Skills-based hiring can be a blessing or a curse, depending on how it’ s implemented. Before the pandemic, the speed of business was already accelerating continuously. The pandemic followed, forcing companies to become an extreme form of agile. Both those trends remain true today.
So why skills-based hiring? It makes the organization more agile and resilient, and it provides employees with greater opportunities for growth.
“The traditional way of working isn’t flexible or responsive enough for the many rapid changes we’re experiencing,” says Janice Burns, chief transformation officer at learning and upskilling platform provider Degreed. “With skills-based hiring, all you need to do is break your job descriptions down into the tasks that need to be done and then look at the skills [required] for those tasks ... If it’s done as a silo, then it won’t offer all the benefits that skills-based organizations can bring.”
According to a Deloitte report, organizations embracing skills-based hiring are:
52% more likely to be innovative,
57% more likely to be agile,
107% more likely to place talent effectively, and
98% more likely to retain high performers and have a reputation as a great place to grow and develop.
“As automation and artificial intelligence reshape the workforce, the specific skills required for success are constantly changing,” says Vit Koval, global hiring and remote work advocate at B2B ecommerce platform provider Globy in an email interview. “To maximize the benefits of skills-based hiring, companies should foster an environment that encourages continuous learning and skill development. This approach ensures that employees remain relevant and can grow alongside the business, addressing both current and future needs.”
Skills-based Hiring Helps Level the Playing Field
In traditional hiring, one looks for degrees as evidence of expertise. Particularly in IT, technology is changing so quickly that one must mindfully inventory skills and fill the gaps on a continuous basis. It’s a process, not a destination.
“We probably did the wrong thing at first, like everyone did. We went after more data scientists and coders that understood Java, but our hit rate was getting worse and worse,” says Antoine Shagoury, CTO at IT services provider Kyndryl.
So, the company started inventorying skills, focused on seven different types of professions in the organization, including consulting, critical thinking, analytical, engineering and software development skills. The exercise helped teach Shagoury and others how they could advertise for talent while providing career trajectories for team members that otherwise didn’t have much of a career path or growth opportunities.
“When we split from IBM, just under 90,000 employees came with us. We have thousands of technology managers, thousands of project managers and thousands of analysts, but if you asked them what they did versus what their title was, the divide grew exponentially,” says Shagoury. “[At the time] we were changing the HR management systems, HR processes and even the teams joining the company, like a lot of HR talent, so it became a mutual journey and the talent process became very strategic.”
Kyndryl also got outside assistance to think through the problem because Shagoury and others wanted to explain exactly what they needed. So, instead of saying something broad like “I want someone with healthcare industry expertise,” the team started breaking down the language of what they sought.
The company also created a university-like program for skills development that is attended by thousands of “students” on an ongoing basis. Meanwhile, the traditional focus on technology-specific roles like Java developers morphed into full-stack developer conversations, so those working on the back end could also develop on the front end and vice versa. That was followed by another shift from full-stack development to “business capable,” meaning they understand how what they’re doing benefits the business or customers.
Expect Pushback
Constantly changing business and technology environments require individuals to be more adaptable and resilient, yet humans still naturally resist change. For example, when Shagoury first started inventorying skills, requests were sent out to about 1,000 employees, but only 15% to 20% responded.
Shagoury didn’t understand why, so he asked in a meeting and then suggested the pilot group think of the skills inventory as an internal LinkedIn, where employees could share their skills. However, the first question was, “Are you going to fire me if I don’t have the skills you’re looking for?”
Then, the scope of naysayers expanded to other organizational leaders who didn’t want their employees sharing their skills outside the local fiefdom. Customers also voiced concerns because they were comfortable working with Kyndryl consultants as-is. Some assumed the change was driven by cost reduction, though a couple of organizations asked Kyndryl to present what it was doing to HR and talent teams because they realized the skills-based approach was becoming increasingly necessary and they, too, needed assistance.
Degreed has also adopted skills-based hiring and processes.