Is a Skills-Based Structure the Key to Your Business Transition?

July 4, 2024 thehrobserver-hrobserver-businessformation

Traditional job descriptions, constricting job roles and constructs are becoming less relevant, and there is a growing emphasis on skill-based organisational structures.

In fact, according to the Deloitte Middle East Human Capital report, the largest readiness gap that companies face currently is indeed the move towards becoming a skill-based organisation, with 93% of organisations recognising the importance of moving away from traditional job constructs for their success but only 20% claiming to be adequately prepared to make such a transition. 

This gap underscores a pivotal challenge faced by modern businesses, emphasizing the need for a more flexible and skill-focused approach to talent acquisition and management.

Is your business ready for the change?

The Deloitte report lists several signs HR and business leaders should look for that signal their organisations need for transition and lack of readiness to do so.

  • Job description contortionism: Your organisation spends too much time adjusting, and readjusting job descriptions to accommodate the continuously changing nature of work and its requirements.
  • Loss of top talent: Top talents in your organisation are leaving as a result of inadequate development opportunities to grow adjacent/transferable skills. 
  • Overreliance on traditional credentials: Many companies still prioritize degrees and specific job histories over a candidate’s skills and potential, which can misalign with emerging business needs.
  • Exclusion of diverse candidates: Rigid criteria based on traditional job histories can lead to the exclusion of the soon to be majority of qualified candidates that just don’t happen to fit the rigid mold your organisation is needlessly still attached to.
  • Limitations within siloed structures: Employees often find it difficult to transition to new opportunities outside their immediate business units due to narrow job specifications and lack of visibility into other areas within the organisation.

The future of skill-based hiring

Back in the day with the emergence of what was then cutting-edge technology, there was a need for a high level of specialisation, employees would spend 10, 20 and 30 years in the same track if not the same role. Jobs were highly specific and fairly straight-forward in their requirements and the need for “specialists” was evident.

Now with the emergence of the technology of our time and the conditions of our business landscape the rigid lines that separate one job from the other are fading, one generalist with the right skill set and access to AI tools is now able to do the job that once was done by four specialists.

It is becoming more and more clear that skill-based hiring is not a trend or a fad, and that the proverbial pendulum of organisation and workforce design is swinging in full force. The problem, however, does not lie in the concept of skill-based hiring itself but rather in its current execution. To fully leverage the benefits of this approach, companies must refine their strategies and overcome existing barriers.

Why do companies struggle with skill-based hiring?

There are several challenges that organisations face with implementing effective skill-based hiring, some of the most common ones are:

  • Inadequate assessment tools: Many existing tools are ill-equipped to properly measure soft skills and potential, focusing instead on hard skills that are easier to quantify.
  • Short-term focus: Prioritising immediate solutions to skill gaps over investing in long-term talent development.
  • Legacy based performance management: There is sometimes a disconnect between hiring practices and broader strategic objectives of the company, the KPIs and metrics it uses to measure and track performance, which can lead to misaligned talent acquisition efforts.
  • Cultural misalignment: And of course, even the best efforts at skill based hiring will fail without the internal culture that supports continuous learning and cross-functional mobility.

What are the strategies for improvement?

The successful implementation of skill-based hiring, organisations need to look into and change a lot more than just their “hiring” practices;

  • Develop robust assessment methods: Invest in tools and technologies that can assess a broad range of skills, including soft skills and potential for growth.
  • Foster a learning culture: Encourage continuous professional development and provide opportunities for employees to acquire new skills that align with future business needs.
  • Align hiring with strategic goals: Ensure that talent acquisition strategies are closely aligned with the organization’s long-term goals and market direction.
  • Promote internal mobility: Implement systems that allow for greater visibility of internal opportunities, helping employees transition across different areas of the business.

As the business world continues to evolve, skill-based hiring will play a crucial role in shaping resilient and adaptive organisations. But organisations should always remember that while skill-based hiring is indeed crucial, they need to change much more than hiring practices in order to become skill based organisations.

Adham Abdelsalam

People and Culture Consultant

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