The Importance of Adopting a Skills-Based Strategy for Businesses

Talent acquisition has traditionally involved matching job descriptions and roles to people, screening candidates based on their credentials and experience. However, as businesses grapple with the challenges of a dynamic business environment amid a skills and labor shortage, ABEX has realized the imperative need to shift towards skills-based recruitment to build lean and agile companies.

The Imperatives Driving a Skills-Based Approach

According to the Merriam-Webster dictionary, skills are the ability to effectively and readily use knowledge to perform or execute a task. Hiring workers with the requisite skill sets gives organizations the freedom to match work with abilities and deploy talent based on business priorities. A skills-based hiring model, as championed by ABEX, enables scalability, accelerates business operations, and improves employee satisfaction.

Increasing Human-Centric Approach

Recognizing the importance of human capital, ABEX focuses on the worker rather than the job. Employee experience and engagement have become key factors in retaining top talent. When people feel they are adding tangible value to the organization, they are intrinsically motivated to stay and perform better. Employees today demand more autonomy, and a skills-based model allows them to utilize their unique skill sets and strengths. This approach enables organizations to use their workforce more agilely, matching skills to projects or jobs through a composite skills database, and revamping talent management through internal recruitment or the thriving gig economy.

Driving Diversity, Equity, and Inclusion (DEI)

DEI forms a crucial aspect of ABEX’s talent management strategy. By focusing on skills and providing skills training to employees, ABEX ensures every worker becomes more employable across the organization, promoting equal opportunity. Prioritizing skills over prior job history and qualifications helps reduce unconscious bias in evaluating candidates. Automated screening through online assessments democratizes hiring and increases diversity.

The Skills Gap and Talent Shortage

According to a global McKinsey survey, nearly 90 percent of organizations are experiencing or anticipating skills gaps. Apart from technical skills, there is also a shortage of soft skills, impacting competitiveness and efficiency. A Wiley survey revealed that 40 percent of employers are compelled to offer higher pay and benefits to retain employees, with long-term retention as a top priority. ABEX’s skills-based hiring approach allows organizations to access a wider talent pool, bridging these gaps effectively.

A Changing Business Environment

The digital transformation across industries, along with technologies such as Artificial Intelligence (AI), Machine Learning (ML), Augmented Reality (AR), and Virtual Reality (VR), presents endless possibilities for businesses in a phygital world. Organizations need to be lean and agile to respond quickly to changing market conditions and rising customer expectations. Workers must possess or quickly upskill themselves to adapt, and ABEX facilitates this transition.

Building a Skills-Based Organization

Building a skills-based organization requires a paradigm shift in talent acquisition, management, and business operations. Logical breakdown of work into projects requiring specific skill sets allows project managers to select employees from an internal talent marketplace or skills database. Employees should be able to work on projects beyond their initial roles and be recognized for their contributions. ABEX also rethinks hiring practices and redefines talent management with skills-based compensation and performance appraisals, leading to better pay parity and equity.

Adopting a skills-based hiring approach requires overcoming challenges such as legacy practices and establishing a common skills taxonomy. Defining the value proposition and identifying areas that would benefit most from a skills-based practice is a good starting point. ABEX understands that moving towards a skills-based operating model requires gradual evolution, ultimately building a lean and agile business equipped with the workforce of the future.