Although financial metrics are critical to business, hard and soft skills are also essential to growth and success. According to Deloitte, organisations that embed a skills-based approach are 63% more likely to achieve results than those that have not adopted skills-based practices. Nick Gallimore, Group Managing Director at The Ingenuity Group, explores which skills-based methods companies can adopt to ensure business growth.
In the past year, there have been mixed messages regarding the job market. Forbes reported that 75% of employers globally are struggling with filling roles, while research from Vistage found that CEOs are optimistic about the recruitment landscape. I tend to agree with the latter. While many have convinced themselves that there is a shortage of talent, I believe there’s actually an abundance.
So, what’s going wrong? The problem is leaders are focusing on the wrong things.
In today’s rapidly changing business environment, shaped by the impact of COVID, recession and rising inflation, companies need to be adaptable when it comes to building teams. To address this, I recommend adopting a skills-based approach.
According to Deloitte, organisations that embed a skills-based approach are 63% more likely to achieve results than those that have not adopted the practice.
At The Ingenuity Group, we have a history of prioritising skills when growing our team and have seen numerous benefits when it comes to retention, greater diversity of thought and cultivating a positive culture – all crucial factors in driving business performance.
The concept explained
To really understand the value of a skills-based approach, it’s important to clarify what it means and how it differs from other methods.
A skills-based approach focuses on the competencies and behaviours of individuals rather than their educational background or previous job titles. It prioritises what a person can actually do, not where they’ve been.
A report by McKinsey found hiring for skills is five times more predictive of job performance than hiring for education, and more than two times more predictive than hiring for experience. Thus, this approach allows companies to find the best workers and retain them.
I find this is particularly relevant in the realm of business development, one of the areas I work in. Success in business development often relies on personal traits, such as confidence, communication and resilience, rather than a degree in marketing or business management. While qualifications are certainly important, they can’t determine how confident someone might feel picking up the phone to a prospect.
Boosting business performance
Based on my experience, I believe a skills-based approach to hiring can help an entire company to flourish.
One key benefit is that it broadens the talent pool and provides access to non-traditional candidates. So, by favouring a wider range of skills, you can increase the quality and quantity of job applicants.
Because the talent pool is bigger, it’s also likely to be more diverse. There has been plenty of research to indicate that a well-rounded workforce made up of different people with varying perspectives boosts business performance.
Additionally, as roles are filled with more resilient candidates, employee retention approves.
Many of our senior leaders secured their first job at Ingenuity with limited experience. But through a combination of training, exposure and on-the-job learning and development, they have grown into leading consultants who advise our clients to build ambitious new business strategies.
In short, a skills-based approach supports career development, fosters diversity of thought and encourages continuous upskilling. A culture like this is the foundation for sustainable growth and can absolutely propel a business to new heights.
Practical tips
Unfortunately, a skills-based approach can be controversial, especially internally. Many business leaders tend to measure talent through a more traditional lens, looking at years of experience or qualifications. When this is the norm, completely overhauling your approach can be quite a difficult process.
For businesses that are seriously considering change, there are three key things to do:
- Define talent success profiles: Business leaders should be collaborating and becoming more involved in the overall hiring process. But crucially, they should fully understand the type of person they want on their team. I call it success profiling. This involves reflecting on past employees who were particularly effective and identifying the behavioural traits that have contributed to their success.
- Revise your recruitment process: One of the most impactful changes a business can make is to rethink its hiring process. That could involve removing CVs from the initial stages to focus more on the candidates’ skills and attributes, for example. This forces the business to reevaluate what talent looks like and review the candidates they are hiring.
- Evaluate and train: Once a new approach is established, ongoing evaluation and training become essential. Businesses should continually assess whether their talent management practices align with their skills-based objectives and provide training to support the development of these critical skills.
Best of all, adopting a skills-based approach to talent management offers businesses a significant edge in today’s evolving marketplace and competitive recruitment landscape. By defining clear talent profiles, revising recruitment methods and continuously training teams, organisations can unlock untapped potential, foster innovation and ultimately drive business success.
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