The building blocks of a skills-based workforce

As skills grow in importance in today’s workforce, businesses must get more strategic about employee hiring, retention and career development.

Sheepskins are out. Skills are in. And that means big changes for businesses taking a traditional approach to hiring, retaining and upskilling their workforce.

Career website Indeed recently published a report tracking job postings in the US. A majority (52%) of job postings in the US had no formal education requirement, marking a subtle but noteworthy upswing from 48% in 2019. In the same time period, the share of US job postings requiring at least a college degree fell from 20.4% to 17.8%.

A slew of major employers, including Walmart, Bank of America and at least 16 state governments, have removed four-year-degree requirements or plan to do so.

The reasons for the incredible shrinking diploma are well known. Start with the demographics. Worker shortage? There’s a growing people shortage out there, and in some regions of the world, it’s getting pretty dire. Additionally, college costs have risen so much that the value proposition of a four-year or advanced degree just isn’t overtly apparent for many people.

In such an environment, qualified workers are more important than ever. Employers insisting on a degree may be cutting off their nose to spite their face.

Reskilling means retention

But this sets up a major collision. More organizations are looking to new and emerging technologies like cloud solutions, big data and artificial intelligence/machine learning (AI/ML) to help them operate more efficiently and reduce costs. As a result, demand is growing for a workforce with the skills necessary to make the tech go. Even as generative AI threatens to disrupt some jobs, it will also require platoons of skilled technologists to create, train and implement tomorrow’s large language models.

Moreover, in some cases, these technologies will dramatically change how some within the organization operate. Roles are changing, and this trend will pick up momentum. The need to retain strong employees will bring new urgency to reskilling.

Today, “reskilling” is too often a mere buzzword—a checkbox item that enterprises talk about with little process or even understanding. Workers are feeling the pain; 78% say they lack the skills and education to move forward in their careers, and many of those will seek out a more accommodating employer.

To make it happen, here are the key building blocks we’re advising clients to put in place.

1.    Create a database for skills

With skills taking precedence, organizations need to do a thorough skills assessment. They need to collect skill data from employees, track that data and make it easy to spot gaps. By doing so, they can align their workforce strategy with larger organization goals. If a business knows what it wants to achieve and the skills needed to get there, it can ensure those skills are being developed.

Establishing a skills platform begins with building out foundational functionality, such as crucial skills, proprietary skills and the ability to match skills to employees. Businesses can then optimize talent by setting up an interest framework. The next step is to create an experience by building an engaging launch of the revamped skills strategy.

More mature organizations often have a dedicated team responsible for developing a skills strategy across the company. Various business units define the current and future skills they need to meet their unique needs, which enables the company to respond quickly to new skills demands. These groups should collaborate to share best practices and ensure alignment of the strategy across the organization.

2.    Provide employee education tools

Once the organization knows what skills it needs, this information must be translated into hiring considerations and relevant training for existing employees. Employees need accessible training programs and educational resources.

Additionally, organizations need an end-to-end solution to identify, engage and hire the right internal and external talent. With a skills-based hiring program, businesses can suggest skills and jobs that help candidates better articulate their experience and connect them to job opportunities. When these suggested skills are placed into job requisitions, hiring managers can highlight the crucial skills the organization requires. Meanwhile, candidate skills-matching capabilities help recruiters prioritize applicants by uplifting candidates with a potential skills match.

3.    Create pathways for career progression

To encourage skill development and drive employee engagement, organizations should create clear pathways to promotion. Workers must be able to easily identify the skills they need to grow into a specific role, and then participate in training programs that develop those skills. This empowers employees to take charge of their careers.

For example, an entry-level financial analyst may want to develop their skill set by taking short, self-paced learning modules that result in certification. Or an IT leader may break through a career hurdle with in-depth, relevant learning opportunities. The ability to generate a suggested career path, including the skills needed to expand a current role or move into a different one, helps employees feel engaged and supported in their individual professional journeys.

Looking ahead

There’s an old joke about evaluating job candidates merely by tossing their resumes toward a flight of stairs; the heaviest resumes travel farther, and that’s who gets hired.

Jokes aside, businesses can no longer hire simply by seeking the most prestigious university affiliation. Companies need to be more enterprising when it comes to provisioning skills, and that requires a rational, repeatable process.

By investing in a skills platform, businesses can reduce acquisition costs and regrettable losses, improve business outcomes over the long term, and ensure employees succeed in their current roles while growing professionally.

To learn more, visit the Workday section of our website.