How to Refine Your HR Strategy for a Skills-First Approach

We are going to dive into how Human Resources can refine its strategy for a skills-first approach. But before we think about that, let’s first understand what’s happening in the market and labour force that’s driving the need for Human Resources to refine their strategies in the first place.

There’s tremendous change in the air. Not surprising. We can all see it and feel it. And it's having seismic impacts on the labour market.  

World Economic Forum (WEF) estimates that by 2025:

• 85 million jobs may be displaced by machines
• 97 million jobs may emerge that are adapted around humans, machines and algorithms

The continued dominance of machines and their impact on us, as employees, is driven largely by 3 factors:

1. Changes in technology
2. The post pandemic recovery
3. Increased use of automation

Here’s a few places, in our own day-to-day lives that we see the change:

• The self-checkout at the grocery store.
• Behavioral health providers offering virtual appointments (like meeting with your therapist over Zoom rather than laying on a couch in their office).
• Exercising on the Peloton at home instead of going to the spin studio.
• Diapers automatically purchased and delivered by Amazon.

So what can we, as employees, do to ensure that we continue to be relevant and employable? According to the same report, WEF estimates that 50% of employees will need reskilling by 2025.

What is reskilling?

Reskilling is the process of an employee learning new skills so they can move into a different role within the organization.

The skills an organization needs are changing so the employees doing those jobs need new skills. And if they don’t have, or acquire, the skills then someone else will get that job.

The data tells this same story. LinkedIn looked at the aggregated and anonymized profile information from its 800 million global members and determined that “the skills set for jobs have changed by approximately 25% since 2015. By 2027, this number is expected to double. This means jobs are changing, even if you aren’t changing jobs, just as business demands are changing even if you’re not changing your business.” It is a shocking rate of change. So rapid, in fact, that organizations are left grappling with how they can compete.

“What’s our strategy to win in this environment”?

The skills-first age is upon us and many organizations are unprepared.

In light of such challenges, all eyes are on Human Resources for the answers. This type of organizational change is in the hands of HR. Like every function in a business, HR must have a clear sense of the choices and investments it takes to thrive in today’s environment. While defining a strategy can seem intimidating at first, especially in today’s complex world, building the strategy that answers the question, “What’s our strategy to win in this environment?” starts by answering these 5 key questions.

1. What are our company’s aspirations?

Most HR professionals will agree that conceptually, the goal of Human Resources is simple and well understood. “Find and develop the best talent to ensure the business can succeed”. Conceptually that makes sense. But now, all HR functions need to think more specifically about its functions' unique goals. How does the strategy allow our organization to stand out from our competitors? How can it give us an inch of an edge to be slightly better or different?

It’s a matter of being quite specific -

• What does “the best” talent look like?
• What’s exciting about the business that would inspire others to work here?
• Who is the “ideal candidate” at our organization?
• How do we attract talent?
• And once we have hired talent, how do we foster a committed workforce?

In today’s market, organizations need to dig deeper and ask tougher questions.

2. Where will we focus?

Once the aspirations are set, consider the most important activities that will enable you to achieve those aspirations and make them a reality.

The foundation of strategy is trade offs. Resources are finite and there is never enough. A favorite saying is, “Fast, Cheap, or Good?” You can have two but you can’t have all three. Something always has to give. That’s why focus is so important.

When you think about your HR strategy, work through what are the most important things that will enable you to achieve your aspirations.

Will your resources - money and people - go towards recruiting, talent management, L&D, organization effectiveness, succession planning or HR analytics?

The answer to that question depends on what your business needs, so HR’s focus will need to shift accordingly. Keep in mind that these types of decisions tend to be cyclical, so it's important to think about them in 3, 5 and 10 year increments.

3. How will we be successful?

After answering what you will achieve and where you will focus, the next activity is to map out how you will be successful in those areas.

Not to intimidate you early on in the list, just a warning that this can often be the most difficult part. The difficulty lies in the level of detail that is required to get it right.

Let’s walk through an example to illustrate how to approach this question:

Your HR team decides that talent acquisition is going to be the key area of focus. Now, how will you differentiate your talent acquisition approach in the market?

A few answers to the questions might be:

• Hire externally from a certain area of the world.
  
  
• Invest in the current employees by supporting their reskilling activities, and then promote internally.
  
  
• Hyper-focus on the candidate experience to offer an absolutely stellar and exceptional experience.
  
  
• Broaden your recruitment efforts to larger groups of candidates with non-traditional backgrounds.

The choices are endless! Just remember, it’s important to think of these decisions like you are building a product for a certain set of customers. In the skills-first approach, you need to differentiate.

4. What capabilities will you need?

The hard part is done. Now, how are you going to execute? What do you need in order to operationalize that goal?

Let’s go back to the list and think about what that might mean and look like:

• Hire externally from a certain area of the world.
  
  This might mean finding new recruitment agencies and partners that understand how to find talent in that particular market. And broadening your employee base to include a new market, what does that mean for employee engagement and communication? You might need to introduce new collaboration tools so employees can work together effectively, like Slack and Zoom. And ensure that working hours cross over enough to support the necessary collaboration and knowledge sharing between the different parts of the world.
  
  
• Invest in the current employees, support their reskilling activities, and then promote internally.
  
  This might mean you will need to invest in new learning and training platforms so that employees can gain new skills. Depending on your industry and the skills requirements will dictate which learning partner is the right one for you. Coursera could be the right LMS partner if you are in the technology space.
  
  
• Hyper-focus on the candidate experience to offer an absolutely stellar and exceptional hiring experience.
  
  This might mean switching to a different ATS with a built-in CRM and with marketing automation. In order to hire quickly while offering a high quality experience, introducing automation into your process will be very important for managing a scalable experience. Treating the recruitment process like a marketing campaign could be a differentiating factor to hiring candidates that historically fell through the cracks or left mid-way through the recruitment cycle.
  
  
• Broaden your recruitment efforts to larger groups of candidates with non-traditional backgrounds.
  
  This might mean recruiting from different industries and then immediately training them during the onboarding process. While this approach demands greater investment during the employees early days at your organization, the differing perspective could inject a competitive edge.

As you go through these questions, always make sure you are checking back with what you’ve previously laid out to ensure it all fits together.        

5. What systems and enablers do we need?

Finally, it's time to define the systems required to build, support and measure all that you’ve just layed out.

What does support and measure mean?

Well, it can take a number of different forms, including processes, rules, norms, measures, etc. All of which will inform how well you are tracking against your strategy.

Let’s use our same example to look at how this might work.

You’ve confirmed that talent acquisition is going to be your biggest area of focus and that broadening your recruitment efforts to larger groups of candidates with non-traditional backgrounds is how you’ll differentiate.

You’ve confirmed you’ll need a way to effectively equip hiring managers with the right tools to see a candidate’s skills vs their job title or previous work experience and now, you need a way to track and measure.

To do this, you may consider establishing a set of metrics to assess the proportion of candidates hired from non-traditional backgrounds vs. those from traditional backgrounds and track those metrics over time against your organization’s desired skills base. When the time comes for your annual or quarterly talent planning, you can then bring up these metrics and assess whether you are hitting your goals. There are many ways to establish such systems but they must be unique to your organization so that your strategy is being actioned appropriately and you build the culture required to institutionalize such practices.

The future is skills

In the past 2 or so years, we have all been through a lot. We are coming out the other end in a new world. And that new world requires new solutions that demand new skills. The strategy that drove your Human Resources before might be fine, but it is certainly time to revisit it. And refining it with a skills-first focus might give your organization the edge to be more resilient during this period of change.

At tilr, we are obsessed with these types of ideas. And thinking about how organizations can be ready for the skills-first world. To get involved in the conversation, follow tilr on LinkedIn and subscribe to our newsletter.

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