If You’re Not Hiring for Skills, You Probably Aren’t Keeping Up With the New World of Work

For as long as I can remember, the most important thing for recruiters and hiring managers was just this one thing: your job title.

If you were applying for a position, having the preferred experience, which generally meant having the right job title on your resume, was the key to having your application taken seriously, and more importantly, for you to have a real chance of landing the job.

The big focus on job titles was part of the military-like command-and-control management style that permeated so many organizations (especially in the United States) from the 1950s well into the 1990s. It was defined like this:

In the more traditional command and control structure, all of the decisions in an organization are made at the top. The CEO makes decisions, which are passed down through a chain of command, and everyone in the organization is lockstep in line with those decisions, doing exactly what they’re told without the freedom to make judgment calls of their own or offer feedback.

While the command-and-control approach to management may work in small organizations where the CEO knows all of the employees and work that needs to be done, it actually breaks down in larger organizations.

One of the big problems with command-and-control was that decision making frequently broke down the lower in the organization you got.

In large organizations, the CEO simply cannot be aware of everything that goes on. By trying to make all of the decisions at the top, they may fail to take into account factors at the frontline of which they’re unaware. Top-down decision-making also becomes problematic when a manager runs into something unexpected at the frontline.

When that frontline manager doesn’t have the authority to make a decision regarding the issue, they have to send it all the way back up to the top of the organization. Then, when a decision is reached, it has to come all the way back down the organization to the frontline. This wastes an enormous amount of time and inhibits the organization’s ability to respond to issues in a timely fashion.

Although command-and-control management hasn’t been totally discarded, the focus has changed a great deal in the new, post-pandemic world of work. Job titles may still have some importance, but they are nowhere near as relevant as they once were.

Back in 2016, Forbes predicted that that the old ways of working were changing and that organizations that wanted to get ahead of the curve needed to change too, As Forbes put it:

The old working world is going away, and the organizations that are fastest to get the memo and shift their cultures are the ones who will keep growing and innovating over the next 30 years. The organizations who pretend it’s still 1955 will lose talent and lose customers. We have to wake up and realize that our ability to snag talented people and hang onto them is our only sustainable competitive advantage — but it’s an incredible benefit to have.

Yes, part of the culture shift Forbes describes is about a stronger focus on retaining talent given how much harder it has gotten to recruit and hire that talent today, but there are two other elements that have emerged in the 2022 workplace that are equally important.

One is a focus on employee skills rather than their previous job title, and the other is building a culture where workforce agility, defined by SHRM as “An organization’s ability to alter its direction or … to swiftly adapt to the changing needs of customers, employees and the marketplace” as is a critical element to both developing and retaining talent.

Recent research from Fuel50, an AI Talent Marketplace technology company, described this workplace shift in a LinkedIn newsletter post titled The Move Towards a Skills-Based Talent Strategy: Why it Matters. Here’s how they put it:

“In today’s world of work, the tides are changing. Technology is continuing to evolve at rapid rates, and organizations are finding it harder to predict and prepare for the future. This is exactly why workforce agility has now become imperative to organizational success, growth, and future readiness. A skills-based talent strategy – where the focus shifts from jobs to skills – enables organizations to respond to change more efficiently, helping to boost their agility, adaptability, and nimbleness.”

The Transition to Skills-Based Workplaces Makes a Lot of Sense

They also described the big shift from traditional role-based or job-based workforces, where employees are put into positions based on education, credentials and experience, to a skills-based approach where tasks are assigned based on people’s skills instead of their previous roles. A recent report made this case as well, bluntly describing the challenges most organizations are now facing:

We all know the world of work is continually evolving. In fact, strategies that may have worked just a few years ago aren’t as fit for the work environment we have today. The rapid changes in technology over the past decade have boosted digital adoption in all aspects of work. As a result, experts predict that 50% of workers will be displaced by technological automation in the next five years and 40% of skills will no longer be relevant.

These workers will need to reskill to stay competitive in the job market or may even need to change the direction of their careers altogether. Forbes says this is what has led to many organizations developing a skills-based talent strategy.

Here’s my take: It can be difficult to wrap your head around the seemingly sudden shift from a roles-based workplace to one that is focused instead on skills and agility. But, it also makes a lot of sense when you dig into it, because the notion that organizations can simply continue to just churn through people and then crank up the recruiting to find more again when needed is not only costly to their employer brand but also terribly expensive and counter-productive.

That’s Just Not the Way to Build a High-Performing Workforce Anymore

The Harvard Business Review saw the skills-based approach coming back in June of 2021, and they made it clear then that this was a train that was gaining speed and that leaders would do well to jump onboard right away. They pointed out that:

Evaluating employees and new hires based on their skill sets instead of their work history can help level the playing field — and help companies realize the talent they already have. It also makes talent pools more diverse and often makes hiring more effective.

This is the future of hiring and development. To get ahead of it, companies need to start weaving learning into their company cultures. Organizations slow on the uptake will be left behind and forced to deal with unsatisfied and unmotivated employees and significantly less innovation overall. At a time when talent is the number-one commodity in business, companies can’t afford to remain stuck in old mindsets.

Well, the future of hiring and development is here.

The true game-changer comes when leaders connect skill-building to internal mobility. Prioritizing employee development is now a non-negotiable for organizations to drive retention and engagement. Employees are looking for ways to grow their skill sets and plan their careers, and the best way to facilitate that is through internal opportunities.

People want a career path they can count on, and employers want more agility to move workers around as workforce needs continue to change. A skills-based approach that recognizes the power of more internal mobility that helps both workers and the needs of their organization is the modern way to build a better business.

Authors

John Hollon

John Hollon is managing editor at Fuel50, an AI Opportunity Marketplace solution that delivers internal talent mobility and workforce reskilling. You can download the research reports in their Global Talent Mobility Best Practice Research series at Fuel50.