Barriers to Implementing Skills-Based Hiring
The Challenges Organizations Face
If skills-based talent management is so great, why isn’t everyone doing it? While the trends toward skills-based hiring are strong, and the benefits promising, executing on a skills-based talent management strategy can be challenging. Often, organizations are stymied by the following issues:
Mindsets
Many HR organizations have spent years developing ideal candidate personas that include education and past role credentials. As a result, many veteran recruiters perceive candidates with a four-year degree to be less risky in their experience than candidates with non-traditional backgrounds. It will take dedicated change management, evidence, and patience to change those mindsets.
Assessment Methods
Organizations used education and experience credentials because they were good proxies for knowledge and capabilities. In their absence, HR professionals will need some other way to assess candidates to confirm they either have the skills you need, or they have the ability to develop them. That transition may require new training for recruiters in different interviewing techniques, as well as investments in assessment tools and approaches.
Traditional onboarding and development
Onboarding a candidate who has done a job similar to the one you are hiring for looks very different from onboarding a candidate whose work experience has been limited or defined by a different work environment from yours. Organizations that fail to take those differences into account will struggle, either because their new hires take longer to reach full productivity, or because they leave sooner due to frustration or a lack of engagement. Successful skills-based talent management requires a full lifecycle approach that considers the person’s needs from recruiting through onboarding and ongoing development. This applies also to onboarding and developing candidates in different generations.
Pay equity
There is no simple answer to the question of pay equity. Two people doing the same job in theory should be paid comparable salaries. Yet there continues to be a gender pay gap in tech. Pay scales also tend to take experience and tenure into consideration, which can lead to significant pay discrepancies. Organizations will need to balance the range of issues that determine fairness in pay in a context where a person’s degree or experience held less weight in hiring than it had in the past.
Measurement
For HR teams that track metrics and receive rewards for meeting their organization’s talent goals, skills based talent management creates a new paradigm. That may require new or different metrics for determining success and incentivizing behavior. For example, skills-based HR teams may need to match recruiting metrics, such as average time to fill a role, with effectiveness metrics, such as employee tenure, to ensure that the skill-based strategy isn’t sacrificing quality for speed.
Conflicting HR priorities
HR teams have been under a lot of pressure in recent years to deliver greater talent outcomes with fewer resources. While narrowing the skills gap is a major driver of HR priorities in 2024, it is not the only driver. Concurrent trends around adopting HR tech and managing the impact of AI on jobs and the workforce may take precedence, and push a systemic change like skills-based talent management to the back of the priority list.
Many veteran recruiters perceive candidates with a four-year degree to be less risky in their experience than candidates with non-traditional backgrounds. It will take dedicated change management, evidence, and patience to change those mindsets.