Skills first: 6 success factors for recruiting and developing talent

In Europe, around one in 30 jobs currently remain unfilled - or 2.9% - which is the highest rate ever recorded, according to the World Economic Forum's Putting Skills First report.

In the US, meanwhile, there are over 3 million more job openings than there are unemployed workers - at 9.6 million and 6.4 million respectively.

Talent shortages and tight labour markets impact economic growth. Six in 10 businesses say skills gaps in the local labour market are impeding their business transformation. More than half (58%) of workers believe the skills their job requires will change significantly in the next five years.

As the global population ages and as the green transition, generative AI and emerging technologies of the Fourth Industrial Revolution continue to shift the skills needed, it will only be more important to upskill the workforce.

The majority of industries perceive access to talent as a bigger challenge than retaining and developing it: only 39% of businesses report a positive outlook for talent availability in the next five years, compared to 53% for retention and 77% for talent development.

Talent shortages are particularly challenging for Supply Chain and Transportation, Health and Healthcare, Manufacturing, and retail industries.

A 'skills-first' approach to talent recruitment and development - which looks at whether someone has the right skills and competencies for a particular role, rather than how they've acquired those skills - is one way of bridging skills gaps and easing labour shortages.

"Employers need to rethink their limited focus on using educational achievement and previous experience as proxies for the skills they require," says the report.

"Such an approach perpetuates the scarcity of talent and excludes many people who would otherwise be hugely valuable in the workplace."

The report identifies five areas of opportunity where applying skills-first approaches can generate the highest returns for workers and employers.

It also provides examples of successful policies and initiatives taken by 'lighthouse' businesses, governments and educational institutions to implements a skills-first approach.

Here are six key learnings from the lighthouse organizations.

1. Sponsorship from leadership

Leadership must endorse and model skills-first approaches. Business functions must co-own skills content. Leadership must monitor data on skills and skills gaps to track the business impact of learning and development. Leaders must remain accountable and make informed decisions on deploying skills-first approaches.

2. Alignment with business needs

Many businesses struggle with skills gaps, which hinder productivity and business transformation. It's important to view skills-first approaches as more than just a human-resources project. They are the key to transforming your business. To be effective, skills-first strategies should be based on practical business needs and market priorities. By linking skills metrics to broader organizational goals, such as improved productivity and more efficient hiring techniques, you can unlock the full potential of your workforce.

3. Leading with effective communication

Implementing skills-first strategies is not a quick process. To successfully manage this change, regular communication is key. It is important for both management and employees to understand the benefits of engaging in skills development. Creating a network of change champions and advocates from different parts of the business helps build a supportive and enthusiastic group of supporters for the programme.

4. Data and evaluation for iteration

Skills-first lighthouses keep track of important metrics like skills gaps, active users, learning hours, course completion rates, and internal and external mobility. This data helps both employees and employers understand which skills are lacking and find effective ways to bridge those gaps. The organizations collect feedback through standardized forms and regular check-ins with stakeholders to constantly improve. They also conduct external audits and internal evaluations to identify areas that need further development.

5. Leveraging technology for scale

Initiatives typically start with targeted pilots. However, to enhance skills transparency and visibility, it is crucial to make technology platforms and tools accessible to all employees. Lighthouses commonly employ customized or vendor-integrated technology to track skills and identify skill gaps. These skills profiles are then linked to upskilling or reskilling initiatives on a larger scale. Both business functions and human resources departments are responsible for this process, ensuring its practicality and relevance. As organizations expand, keeping track of skills gaps for numerous employees can be facilitated by ethical, secure, and trustworthy AI.

6. Leadership from governments and the education sector

It is crucial for employers, as well as the broader education and public-sector systems, to embrace skills-first approaches. By adopting these approaches, we can complement traditional systems, address talent needs in our economies, and invest in the future workforce.