Bridging The Talent Gap Why Skills-Based Hiring is Crucial for Recruiters

The origins of today’s talent gap

The current job market is reeling from a phenomenon that began twenty years ago, and it is largely to blame for one of the worst skills or “talent” gaps that the marketplace has ever seen.  It’s called “degree inflation” – the arbitrary decision to require a four-year degree for jobs that did not previously require one.  

Degree inflation can be traced back to the dot.com bubble of 2000, but the trend accelerated during the Great Recession of 2008 – an economic crisis sparked by insufficient regulation and toxic mortgages that crashed the housing market.   During the peak of the Great Recession the unemployment rate in the U.S. skyrocketed to a mind-numbing 10 percent. 

In October 2009, there were six jobseekers for every open position.  This mismatch in supply and demand persuaded organizations to raise the academic requirements for their jobs with no real basis.  Soon we were living in a world where students were pursuing degrees that left them in huge financial debt to get a job that didn’t really even require their level of education.  At the same time, qualified candidates who possessed the required skills for a job, but not the degree, were left out in the cold.  

Fast forward to the present day and it becomes apparent how degree inflation has caused such a huge talent gap at so many organizations with its long history of screening out talented candidates who had the required skills, but not the degree.  While it’s true the pandemic has only served to widen this existing skills gap, many organizations are becoming privy to the fact that they can successfully bridge this gap by adopting new innovations in HR hiring technology that allow them to institute a skills-based hiring strategy.  

Modern recruitment management systems like a robust applicant tracking system (ATS) or related resume database software systems are now offering recruiters the tools they need to hire based on specific skills.   What’s more, once the right candidates are onboarded, organizations can continue to close their talent gap by instituting a comprehensive upskilling program.

What is Upskilling?

The Great Resignation sparked an all-out war for talent, but some organizations have found a different solution: their existing workforce.  According to a recent survey, nearly 7 out of 10 employers are "optimistic about filling open roles with current employees.”   

Remember, skills-based hiring is responsible for two things: locating candidates with the right skills and locating candidates who can be groomed for advancement within an organization via upskilling.  

Upskilling is a long-term, closely monitored program that invests in the skillset of an organization’s workforce – it is also a crucial component of competitive strategy today.  Ultimately, upskilling is the process of providing your workforce with hard technical skills as well as softer skills like collaboration and communication to “future proof” your organization and make your company more competitive.

Focus on Filling Your Talent Gap

Elevated rates of turnover are a huge liability for any organization, and the Great Resignation has brought plenty of it.  Employee turnover is largely the result of swaths of unfulfilled workers not feeling enough satisfaction from their job, and it’s a factor that only serves to widen the existing talent gap at any organization.  HR leaders are responsible for building a workforce of people who can see a clear pathway to their own personal and professional growth through the development of hard and soft skills.  HR leaders who are successful at this will make tremendous strides in closing the talent gap at their company.

The good news is that HR leaders are finally getting a seat at the decision-making table along with the CEO as the marketplace learns that the talent of an organization’s workforce is directly related to the long-term success and competitiveness of any company.  

The Technology Behind Skills-Based Hiring

Innovations in HR technology solutions have proceeded at a torrid pace since the onset of the pandemic and the early adopters of these HR solutions are the ones having the greatest amount of success in closing their talent gap.  How?  Well, modern Applicant Tracking Systems (ATS) have evolved way beyond simple resume databases.  

ATS systems are oftentimes at the heart of skills-based hiring strategies in any industry.  ATS systems function as a powerful competitive asset with the ability to use automation and artificial intelligence (AI) to rapidly identify the best candidates.  Essentially, an ATS system can play a key role in future proofing your organization.  

Here’s what we mean: 

The right ATS system equips recruiters with the necessary technology to analyze a pool of candidates for specific skills to determine if they’re not only a good hire, but a good investment for the company.  In other words, an ATS can reveal the candidates that are most compatible with your upskilling program and organizational culture.  That is “future-proofing” an organization.

In this job market, technology is the key to skills-based hiring.  HR leaders who desperately cling to the “traditional” way of recruiting without considering the market’s newest innovations in hiring technology willfully put their organization at a terrible competitive disadvantage.  The stodgy recruitment era of lengthy screening processes and lack of personal communications with candidates is dead.  

Cling to it at your own peril…

The Future of Hiring

One trademark of the current job market is that learning and professional development opportunities (upskilling) will continue to be the determining factor not only in whether the right candidate decides to accept an offer from your organization, but also whether they’re likely to stay with you over time.  Upskilling will be a condition of employment in the future, and it is your best bet for closing the talent gap at your organization.  

In a post-pandemic society, the future of hiring for modern organizations will be different.  The future of recruitment will be tech-fueled, skills-based hiring supported by a strong company brand.  Organizations that adopt the technology to fully institute a skills-based hiring process will dramatically enhance their chances of connecting with great talent.  With a solid technical foundation at the core of an organization’s hiring efforts, recruiters will get the best results in the future by using social media to promote not only the skills they’re looking for to active and passive seekers online, but also promote the upskilling opportunities that exist at your organization online.

Integrate Upskilling into your Employee Development Program

According to a Gartner survey, only 20% of workers are confident they have the necessary skills for the future, but there is plenty of research to demonstrate that new employees are eager to learn.  That presents a huge “win-win” opportunity for organizations that are willing to look beyond the short-term approach of simply finding talent in the shortest amount of time.  Instituting an employee development program (upskilling) is a demonstrated commitment by an organization that it makes investments in strengthening the skills and competencies of its workforce and it helps employees advance their careers.

Remember, when your employee development plan lets workers take advantage of upskilling opportunities for their personal or professional growth, other key metrics such as employee engagement and retention will no doubt trend upward.   

Talent Attraction & Employee Retention

Let’s pause a moment to understand something crucial – talent gaps largely exist because of the disparity in who gets access to these learning opportunities.  Covid-19 only muddied the waters further as something as benign as child-care responsibilities affected a worker’s ability to improve their skills.  You can use this as an opportunity to show the market that your organization is different.  Organizations can use their upskilling program as a talent attraction strategy by proactively promoting personal development opportunities via your organization’s social media outlets – we mentioned branding earlier, and it can be very persuasive to passive job seekers.

Recent statistics place the cost of losing an employee can range from one-half to two times of said employee’s annual salary – ouch!  Frankly, upskilling can go miles in helping an organization improve its employee retention rates, and the benefits are thousandfold.  Company loyalty, feeling appreciated, improved culture are all by-products of having an employee development plan that includes upskilling.  

Increasing Productivity 

Invest in your workforce and your organization becomes more productive.  The formula seems suspiciously academic, but the fact is that the organizations offering comprehensive learning and training programs indicate a significant increase in revenue per employee.

Employee engagement is described as the level of enthusiasm and commitment that an employee feels towards their employer when they know and understand their role in the company’s growth.  It is the octane that fuels production at an organization, yet only 15% of the employees on planet earth feel any real sense of engagement.

Organizations that provide professional development and upskilling opportunities can dramatically improve employee engagement at their company.  Massive global productivity losses should communicate all too well the liability of overlooking or treating employee disengagement as a trivial matter.  And it’s more than dollars - multiple published studies have shown that disengaged employees have a negative impact on teamwork, quality, and, ultimately, revenue.  When an organization offers learning and development opportunities, employee engagement increases. 

Upskilling does more than close your talent gap, it also can inject an organization’s workforce with renewed vigor and accelerate productivity.

Enhanced Customer Service

The quality of service that an organization provides to their customers can make or break an organization.  Investing in upskilling creates a staff of workers that is confident and skilled.  This is usually reflected in a work environment that is supported with a strong and positive work culture that is much more willing to demonstrate deeper amounts of empathy with an organization’s customers.  Oftentimes, it’s because the workers know that the organization they’re working for “has their back” and this cultivates a very positive experience for an organization’s customers.

An organization can offer the best product on the market, but the one thing customers are most likely to remember is their direct interactions.  When an organization invests in upskilling programs it produces a workforce that delivers an out-of-the-ordinary customer experience.

Market Competitiveness

The goal of upskilling is to provide employees with the skills and training they need to do their jobs not necessarily better, but to do their jobs “the modern way.”  It’s worth pointing out that Covid-19 was a huge driver in technology and automation, and it has essentially reshaped the division of labor between people and PCs.

An organization’s plans to institute an upskilling program must consider all the work that is now being performed by machines and have a plan to train its workforce to work more cohesively with these new technical innovations.  An organization that wants to bolster its competitive positioning needs to have a workforce that is trained to assimilate with its digital counterpart - the computer.

Having the right technology in place and having a workforce that is trained to amplify the benefits of that technology is the key to achieving greater levels of success in competitive advantages.  

Importance of Employee Wellness

One of the modern trends in organizational leadership is the championing of efforts to achieve a greater level of employee wellness.  For many companies, employee wellness has escalated to being a strategic priority in 2022.   As a society, we just spent the last two years learning how fragile life is, and how rapidly everything can change, and not always for the better.  The modern employee wants the organization they work for to have values that are closely aligned with their own values and ethics, while also demonstrating an element of respect for an employee’s work-life balance.

Upskilling isn’t entirely about providing technical skills.  Organizations that offer holistic, comprehensive wellness programs as a component of their employee development program can help employees deal with stress, anxiety, and other mental health issues that are so prevalent in our society.  

Workers who can rely on their employer to get help in these areas can develop fierce amounts of loyalty and they are likely to promote the fact online to their social media contacts, drawing other candidates within hiring range.

Conclusion

A recent report by Harvard Business Publishing found that over 50% of the global workforce will need upskilling by 2025, and, in the same report, a majority of employees believe they know where they have a gap in skills but less than half had any confidence that their management understood those talent gaps.  

As a result, talent gaps will continue to widen at many organizations across the globe.

It’s a crisis that can be overcome by adopting both a skills-based hiring strategy and a modernized high-powered recruitment management system to function as the nerve center of your HR operations.  These strategies married with a company-wide upskilling program can not only overcome the lasting effects of degree inflation they can also go a very long way in attracting new candidates to your organization as well.

Remember, recent innovations in HR technologies and modern ATS systems are uniquely effective in their ability to help organizations bridge their talent gaps as well as their ability to identify candidates with the skills and characteristics to be developed to future-proof your business.

Manatal – The Top ATS Platform for Skills-Based Hiring

With 79% of CEOs regularly worrying about their workforce's existing skills, having the right tools to locate, hire and train the best talent is a strategic priority.  Manatal provides a customizable, easy-to-use ATS and CRM that offers recruiters a wide array of tools to help them identify candidates with the right potential to bridge talent gaps that exist at organizations.

Our powerful and intuitive AI recommendation engine has demonstrated its usefulness in helping recruiters find the candidates with the right skills upon hire. It also helps recruiters analyze data to identify those with the characteristics to be groomed for a future with their organization via upskilling programs.

To see for yourself just how well Manatal’s AI-powered platform can help you close the talent gap that exists at your organization, you can take advantage of the free trial that the company is now offering.