The rise of skills-based hiring: Getting future-ready

Advancements in science and technology have transformed the future of jobs and evaluating this for the near future is also quite challenging. This is leading to a widening gap in the talent pool. It further got exacerbated in the last few months due to the COVID-19 pandemic. The major reasons were  the increase in demand of technology workers as companies had to embrace change by adopting digital technologies to sustain their businesses and how the pandemic affected the global workforce dramatically 

While many jobs are unlikely to return, industries are experiencing a shortage of people having the right skill set to deal with the current environmental changes.

This has accelerated the need for ‘skill-based hiring’ as against the trend of degree-based hiring which got commonly known as “degree inflation” post the Great Recession of 2008-2009. It was during the early 2000s that the majority of the employers added the requirement of degrees in their job descriptions even if it was not required for that particular job, owing to the pressure built up by the era of degrees.

However, the acceptance towards technology seen all over during the pandemic was remarkable for a developing country like India. Laptops and smartphones took over the country and reached even the remotest areas, keeping the light of hope bright as ever. Also the Government of India through the ‘AtmaNirbhar Bharat’ initiative is promoting skill-based entrepreneurship. This entails training people on varied skillsets and providing an ecosystem for setting and running entrepreneurial ventures. This is certainly driving change in the job market and is leading a paradigm shift in the thinking process of employers.  They are also realizing the importance of skill-based hiring thereby replacing the degree inflation tide. 

There is an emerging trend towards employers seeking out skills sets. One can see that during placements at MBA institutes, the first ones to be hired are those who possess specific skills – engineering or technical skills. The era of specialists is on the rise more than that of a generalist. Even though the demand for generalist managers will always be there, with the advent of technology the number of generalist roles available in the market are shrinking.

Generalist roles are shrinking to the higher echelons of the business levels.  There too the specialists who prove themselves to be business strategists and who possess people skills are the ones who are being given the preference. Recent rise of CHRO’s being raised to Business Leaders roles is an indication of the future trend.

Organizations are realizing that hiring generalists at junior levels and overpaying them due to the qualification, degree and pedigrees are not translating into early productivity for the businesses. Degrees are not necessarily making candidates business or job-ready. Thus there is a visible declining trend in hiring based on degrees and rising importance of selecting employees based on skills required for the job. This reset happening at the hiring front is vitally very important as it is decreasing reliance on just degrees while encouraging job applicants to focus more on developing the right skills to be employable. This will help create a striking balance in managing demand and supply in the labor market. Candidates will become employable with every skill set that they acquire with continuous learning and enhancement of relevant skills leads to growth. 

Increasing design of curriculum on the incremental skills sets and learning allows a scholar to learn at their own pace without being labeled for academic gaps. Learning through the application of skills and acquiring practical insights through skill-based employment becomes fundamental. After a careful analysis of various employment announcements by various organizations, it is observed that the majority of them are ready to forego degree requirements in filling up the jobs.

But that brings us to the most important question: How will we cope with the new changes and fill in the skill gap? 

The answer to this is – ‘Continuous reskilling’ and ‘upgrading skill-set in the new technological context’. A study by Gartner also confirms that 58% of the workforce would require newer skill sets to do their jobs. Thus, in order to keep the employees future ready the leaders of the organization should emphasize on ‘upskilling’ and ‘reskilling’ of their teams. 

It is important to create multiple career tracks where parity of growth levels and earnings is maintained across general management, technical and skill-based careers to maintain an equal status of roles as per the expertise.

With this upskilling wave in motion, the onus of learning and growth lies equally with the employer and the employee.

Employers must provide the environment to take upskilling not just as a mandate but as an integral part of their work. Building a culture that fosters upskilling will help in encouraging employees to build that desire and wholehearted participation in various learning activities required for the job. Thus, the employer should provide opportunities in learning, unlearning, failing and relearning by allowing employees to devote time and energy for the same.

Employees, on the other hand, should be proactive in leveraging the learning opportunities and resources to keep themselves abreast with the new trends and identify opportunities for enhancing their roles. Thus upskilling will certainly help them in developing personally and professionally and stay ahead on the learning graph.

Because ‘it’s always the small pieces of the puzzle that make the picture holistic’, likewise both the employers and employees have to work in unison to achieve the objective.