Becoming a Skills-Based Organization

Skill requirements are changing in every industry and location across the globe. And while becoming a skills-based organization isn’t as quick as flipping a switch, the benefits are real. 

Here are three key benefits of becoming a skills-based organization: 

1. Resilience in the face of change

2. More strategic recruitment 

3. Engagement and growth of talent

Skills-based organizations are more resilient. 

Skills-based organizations are more adaptable, equitable, and innovative. The economy and workforce are constantly evolving. New technologies (ChatGPT anyone?), the pandemic, and other factors are shifting the way we need to think about our workforces and what organizations need to do to remain competitive. And these shifts aren’t just reflected in headcount or job titles, but in the underlying skills that are required of our workers. If you want to keep an eye on changes in the workforce and adapt as needed, you need a skills-based lens.

Skills-based hiring enables more strategic recruitment. 

When you move beyond hiring for a degree or a job title, you can recruit more strategically. Speaking the same language of skills allows hiring teams to focus on what really matters for their open roles. Skills-based hiring expands candidate pools, increases diversity, and reduces cost per hire and time to fill. 

Focusing on workforce skills allows your employees to develop and advance. 

Once you have people in the door, you can take a skills-based approach to engage and grow your talent more effectively. If you have a clear line of sight into what skills are needed across different roles, you can give people a direct path to develop their capabilities. This will benefit both the company as well as individuals in the long run by building out career pathways and unlocking internal mobility. 

While these are all meaningful benefits, eventually someone is going to ask, what is the impact on the bottom line? Taking a skills-based approach to workforce planning can save companies millions of dollars. By investing in building skill sets rather than buying them, you can potentially save tens of thousands of dollars per hire. 

Want to get started on your path to becoming a skills-based organization? We’d love to help. Connect with us!

Here are the first three steps organizations can take to successfully implement skills-based initiatives:

1. Level-set and plan

2. Find quick wins

3. Solidify your business case and demonstrate ROI

Step 1: Level-Set and Plan

The first step to becoming a skills-based organization is to intentionally build your roadmap. Ask yourself, how do I plan to find quick wins and develop a strong business case for the skills-based initiatives I’d like to implement?

Level-setting is making sure you have a foundation in place to move forward as a skills-based organization. You need a common language of skills that is dynamic, synced with the labor market, and aligned with other parts of your business. Also consider your data: where is it coming from and how is it flowing throughout your organization? 

Review internal and external data, as well as current and future data. Ask questions like: 

1. What are skill requirements based on our job descriptions? 

2. What are in-demand skills from a competitor perspective? 

3. What are our skills and capabilities today, and where do we want to be in the future?

In order to become a skills-based organization, look at everything more holistically. Create alignment in your technology, data, and conversations. From a relational standpoint, you need to educate the entire organization as to why a skill-focus is so important. When you provide the answers, everyone can get on the same page. 

For example, talent management is a main priority. With people more mobile than ever, and turnover and rehire being so expensive, talent retention is crucial. Show stakeholders what it would look like to manage talent more effectively from a skills approach. 

Ready to start strategic workforce planning with Lightcast? Connect with an expert.

Step 2: Find Quick Wins

After you have a plan and stakeholder buy-in, you need to move to the action phase for your skills-based initiatives to prosper.

Common skills-based quick wins may include: 

• Building market-optimized role and skill profiles

• Right-sizing job descriptions

• Building career pathways

• Expanding talent pools

• Optimizing learning and development

The key is to dial in. Target the key roles you need to focus on in the next year. For example, which ones have high turnover rates, are hard to find in the market, or are strategic growth roles? Take a deep dive into understanding the skills needed for these roles, the complexity of what’s going on in the external labor market, and communicate with leaders to understand their pain points. 

Ask simple questions like, “based on turnover last year, do you know what skills left your organization?” While they might know what job titles left the company, if roles aren’t defined from a skills perspective, there are now unanticipated skills gaps. Leaders need a mechanism to understand this, and you can show them how a skills-focus will address this problem. By looking at the skills of employees and skills within your job architecture, you can help create actionable plans for future business needs.

Example: Job Posting Optimization

1. Skills-based hiring practices that use skill-rich job postings will attract even more qualified candidates to your open requisitions. Job search engines and job boards use AI to match candidates to job postings. While you can’t control the algorithms of these sites, you can optimize how you write a job posting. 

With Lightcast, a medical device company dialed in their job postings for strategic roles from a skills-perspective by removing antiquated language and focusing on key specialized skills to give a better preview of what was needed in the role and to open up access to more qualified candidates. Within two months, they saw a better candidate flow for the roles they were focusing on.  

Tie skills-based initiatives to real business challenges. 

When you start small, you can develop ROI metrics to present to executives and get the resources you need for the next phases of your skills journey. If you can solve a very targeted problem in a short period of time, you’ll earn c-suite buy-in and get the leverage you need to continue to expand your skills-based focus to other parts of the organization.

Step 3: Solidify Your Business Case and Demonstrate ROI

Once you kick-off your skills-based initiatives, you need to be able to demonstrate their value. A common place to identify skills-based initiatives that drive the highest ROI is within these four Bs—Buy, Build, Borrow, and Bot.

Here’s an example of taking a skills-based hiring approach and optimizing job descriptions for cybersecurity jobs:

A skills lens helps you make better talent decisions.

Reducing degree and certification requirements promotes labor cost savings, but there are also secondary benefits that come from skills-based hiring. These include increasing the diversity, innovation, and creativity of your workforce. When you have more people with different mindsets, you’re more agile and able to pivot quickly as skills shift and jobs change.

Without a skills-based strategy, you're navigating without a compass.

Understanding talent from a skills perspective gives you complete visibility of your workforce to make better decisions. Skills data provide directional guidance to make informed talent, learning, and hiring decisions. Are you ready to become a skills-based organization? Lightcast team members work with clients to help them advance as skills-based organizations with marketplace-tested and practical real-world approaches.