What is a Skills-First Approach and Why Should You Want It?

What is a skills-first people strategy?

Skills-first is a more ethical and inclusive approach to talent management and drives great employee engagement and retention. It’s also the strategy that is going to differentiate the companies that will succeed in the changing labour market. The reason is because skills-first organizations are more resilient to unexpected change in the world, and foster a more committed group of employees.

Let’s explore what is a skills-first strategy and how it works.

The best way to describe a skills-first people approach is to contrast it to the traditional way the vast majority of organizations operate today.

The traditional approach is summing a person and their capabilities up based on:

• Education
• Job experience, summed up by their job titles

There are a number of problems with evaluating talent through that simple lens. First and foremost it is biased and creates barriers to employment for people to join your organizations. It disproportionately impacts underserved groups and newcomers to our country. Secondly, it is not a talent management strategy that allows organizations to compete, thrive and be resilient into the future.

Let’s dive deeper into this and think about why:

• Education - it is no secret that all people do not benefit equally from the same opportunities and access. When it comes to education, this is an area where that access has a lot more to do with your socioeconomic status and less to do with your IQ, test scores and overall capabilities as a person. To put it bluntly, not everyone can afford a formal education. And it is not necessarily an indication of a person’s capacity to do the job.
  
  Further to this, a traditional lens that evaluates people on education, breaks it down further into where the education was gained and how quickly. This deepens the bias to disfavor people that have to pay for their own education so might need to work while they pursue education. So that 4 year degree might take them 5 or 6 years, simply because their parents don’t pay for their education. This is absolutely no indication of the value that person will drive in your organization.
  
  
• Job experience - In a world where a person climbed the corporate ladder - a ladder that went straight up in a single industry - this method of evaluating and managing talent might have made sense (and it was still fraught with problems but let’s not digress).

In today’s world, people simply don’t organize their careers in a single, upward trajectory. Today’s career looks more like a jungle gym - swinging from one department to another. And then switching industries and applying those learnings to an entirely new context and problem.

And the access to the job experience, that is the foundation for access to later opportunity, is often predicated on an education. At least in some industries. So the inequality and barriers start early on.

So what’s a skills-first approach?

Skills-first considers what skills a person has, and greatly de-emphasizes how and where they acquired those skills. This is a much more fair and inclusive way to look at people. And help them grow and navigate their careers.

Let’s contrast the skills-first approach’s views on education and job experience:

Education: In the traditional approach, a person goes to school. Where and how quickly they obtain that degree or certification matters. It’s considered market signals about the quality of materials that were studied. It also indicates the person’s capabilities to be accepted into that school, and successfully complete the course material.

In a skills-based approach, learning is ongoing, and where and how the skills are acquired through learning is far less important. This is because it is about maintaining relevant skills that are in-demand, because the skills that are relevant and in-demand are quickly changing. So the requirement for lifelong learning is more important, as opposed to a degree captured during one chapter of life.

We see a shift in approach to lifelong learning in the education opportunities that are continuing to emerge in the market. Some examples:

• MOOCs
• Peer uploaded courses on LMS’s
• Certifications by the software provider themselves like Google and Hubspot

Educational content has to keep up with the pace of change and is accessible by the people in those roles. And so we are continuing to see new formats and providers of that content. It won’t slow down soon.

Job Experience: In the traditional approach, what company you work at, your title, and your progression in the form of promotions is the focus to sum up whether an employee is “good”. Those factors are far less relevant, even moot, in a skills-first approach.

A skills-first approach focuses on what a person did. Deliverables and achievements are relevant, as are the recency that a skill was used, and the depth of proficiency with that skill. For example, did you support a project or did you lead the project? Is your proficiency with the skill solid enough that you could teach it to another person?

Why is the world shifting to a skills-first approach?

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The world is changing rapidly. And the answer to this question is complex because there are a number of drivers of change. Breaking them down gives a glimpse into some of the forces at play in the market. The sum of all these changes demonstrate how a skills-first approach is the inevitable future. The good news is it's a future we all ought to be rooting for because it's a future that holds greater employability for more people, it's more agile to respond to unexpected changes in the market.

Let’s dive in:

1. Too many jobs, not enough people: To put it simply, there are more jobs than people. Organizations need employees to staff their organizations. According to BDC, 55% of Canadian entrepreneurs are struggling to hire while at the same time 26% of Canadian entrepreneurs are struggling to retain talent. Two thirds of these businesses have reported missing out on opportunities or potential growth. A primary solution to this problem is to remove barriers to employment. By removing the requirement for a bachelor's degree, for example, you are increasing your talent pool.

2. Innovation is driving skills-change: The world is changing too much and too quickly, so new needs, industries, and companies are emerging every day. And with it, new jobs and the requirement for new and different skills.

The digital marketing discipline illustrates this very well. The advertising platforms are changing their algorithms, rules, technology, privacy rules, every day. In order for a Marketer to remain relevant in their industry, they absolutely must be learning new skills. When Apple rolled out iOS14 in May 2021, virtually overnight Performance Marketers running ad campaigns on Facebook had to completely revamp their strategies to compensate for the new rules of data sharing on Facebook’s platform. Google has announced it’s moving to a keyword-less future, leaving SEO experts scrambling to understand what the new winning strategy looks like. You blink, and the industry moves over an inch or even a foot.

3. People want to be challenged: People know that there are more interesting opportunities out in the world for them, and they are determined to tap into them. They know that the world is changing at lightning speeds and they have the chance to be part of the innovation. There is an ambitious, curious and driven nature to the human spirit that is simply tapping into what this world has to offer. They want to work in different companies, in different industries and even different disciplines. They are demanding different challenges from their career. For their own sake.

And the traditional approach to talent management doesn’t do a good job of tapping into that energy. A skills-first one does.

4. Job titles have lost their meaning: In the world with the linear corporate ladder, the job title might have meant something. It was a fair and decent market signal about the things a person did in their day-to-day role. But today, where companies are pivoting and employees are the ones doing the pivoting, job titles have to be as flexible as the people holding it. The job title simply does not adequately summarize what the person is doing in their role. And, in turn, the skills they are acquiring.

Let’s take a look at a Customer Success Manager at an early stage startup. That person will likely be managing the full customer lifecycle - from the minute they sign on the dotted line of the sales agreement to the contract renewal stage. The Customer Success Manager is responsible and accountable for onboarding and implementation, to day-to-day account management, first line of support, identifying and maybe even pursuing upsell opportunities, to contract renewal. As a software company matures, those tasks might fall under different people’s portfolios. There might be an Implementation Manager responsible for that completion of sale to launch period. There could be an Account Executive from the Sales department assigned to the account to manage upsell opportunities. And a Support department that focuses on triaging and responding to support requests. In that organization, the skills of a Customer Success Manager are different than the skills of a Customer Success Manager in that young startup.

That’s all OK. But the traditional approach isn’t as effective at identifying what those two Customer Success Managers have actually done in their roles and where their competencies lie.

5. We are more than a sum of our work experience and education - The thing about today’s work world is that people enter, often exit, and then re-enter the workforce. And what they did during that exit period is probably valuable in the workplace.

In the traditional approach, that period when the person was out of the workforce is a real problem that the person has to somehow overcome. It is considered a negative market signal (dare you leave a gap on your resume *gasp*) and should a recruiter or hiring manager ask you to explain the gap, there better be a really really really good answer. Otherwise, your candidacy is definitely dropped from the pile.

What we all know, because we are all humans with lives that extend far beyond our work life, is that we have busy, full, and challenging lives outside of work that require us to develop and use a wide array of skills. And when a person leaves the workforce, it is for a good reason. They were doing something. Whether it be a parent running a household and raising children, a person caring for a sick loved one, a parent navigating the systems for their disabled child, a personal sabbatical to explore a corner of the earth that they’re deeply curious about, skills were gained. And these skills will certainly benefit every organization that they work for in the future. So this period of time should certainly be part of their skills profile.

So how do you implement a skills-first approach at your organization? Well, there’s a lot of different things you can do! And that’s what we are obsessed with at tilr. Subscribe to our newsletter (we won’t spam you, promise) and follow us on LinkedIn for more thoughts on this topic.

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