Sixty-nine percent of companies report that they can’t find the people who have the skills they need to execute on their business strategy, according to research from ManpowerGroup. Skills are changing that quickly in the workplace. The half-life of any given technical skill is only about two to five years at the most. Further, there are now two open jobs for every unemployed person, an indicator of how tight the labor supply is right now.
There’s also a big mismatch between the talent available for work and the skills needed for many open positions. The supply of people with the sophisticated skills many companies need the most to modernize and compete is insufficient.
How do you deal with an acute labor supply shortage on an organizational scale? How do companies keep up with the need to have an ever-evolving supply of the right skill sets?
Answering these questions means broadening the aperture to access the necessary talent. It means getting creative to open opportunity to sources of talent you’re not tapping into.
This is a structural challenge. Traditionally, HR managers screened applicants based on their education, which meant having at least a four-year bachelor’s degree. According to WorkingNation, nearly 70 percent of jobs still require a four-year college degree, but fewer than 50 percent of workers have one. Many HR departments today either repel qualified applicants on their careers sites by listing a degree as a requirement, or weed them out using screening technology.
From a diversity, equity, and inclusion standpoint, the four-year college degree requirement may exclude many underrepresented minorities who don’t have the financial means to acquire a college degree. Unwittingly, many companies are structured to exclude from their talent pool people who are capable of performing the skilled roles they’re having difficulty filling.
Credentials and Certifications
Skilled credentials and certifications mean opportunity for people who are often overlooked in the workforce.
Certifications exist for almost every conceivable discipline. Associations in many fields provide certifications that are benchmarks of industry standard skills in various disciplines. One can become a certified med tech, or a certified product manager, or a certified HR professional. A company may need someone certified in a certain CRM technology, or it may want a certified Oracle administrator. Tech giants like Google and Cisco offer certifications based on their technologies.
Certifications and skilled credentials usually require some online education, and some practice or applied work. It’s one thing to take a course online, but another thing to be able to demonstrate a skill to a professional. That’s why industry experts often observe applicants for certifications as they work and verify that they have the skills in question. Apprenticeships are another form of certification that don’t require a four-year degree.
Beyond the benefit of expanding the talent pool, a skills-based focus also helps employees know where they need to apply themselves to advance and grow with the organization. Noting the shifting skillsets in their company, several years ago IBM got very clear with its employees about the skills that are of growing value to the organization, and those that are of declining value, due to the sunsetting of older technologies. IBM encourages its workforce to remain employable by upskilling to the skills of tomorrow, and by continuing to learn in the flow of work.
The challenge for a skills-based approach is to verify the quality of credentials applicants claim. There are so many certifications out there; how do you know which have practical value? IBM has gone so far as to create a blockchain technology to verify that applicants actually have the skills they claim to have. Some providers of technology certifications, such as those granted by Google and Cisco, are highly rated.
You also need a way to recognize and reward people who are doing the work to receive certifications. Research shows that millennials in particular value learning on the job. Incentives for employees should also reflect a skills-based focus by rewarding learning and skills development.
Companies should also look very hard at their job postings. Do you really need someone with a college degree for the jobs in question? Or is it a specific skillset that you’re looking for? Focusing on the skills required to execute your projects will not only provide access to the talent you need, but it will also enable you to move people from lower- to higher-wage jobs.
Looking at skills and experiences, as opposed to focusing on degrees, is a monumental mindset shift for most companies. As skills continue to change quickly, and companies are pressed to find the skillsets they need, they will have little choice but to become more creative about how they discover and deploy talent. February is Career and Technical Education Month, so why not start now? Companies that hire, promote, and incentivize employees based on skills will be empowered to execute their strategy and weather the storms of change ahead.
Edie Goldberg is a future of work expert, author, speaker, and talent management & organization effectiveness consultant. She was named one of the top 100 HR influencers in 2021 and 2022. Edie holds a Ph.D. in Industrial and Organizational Psychology and is a Fellow of the Society for Industrial-Organizational Psychology. She is the chair of the SHRM Foundation board and is on the advisory boards of several HR technology companies.