Why a skills-first talent strategy is key to retention in 2023

You can’t teach an old dog new tricks. Actually, yes, you can. In the workplace, it has been proven to help retention and boost the overall employee experience too, so let’s get studying.

LinkedIn’s Global Talent Trends report showed that employers with employees who learned skills on the job had a 7% higher retention rate (once employees had been with the organisation for 3 years.) On-the-job learning encourages employees to stick around.

LinkedIn’s chief people officer, Teuila Hanson, says that “a skills-first talent strategy” (matching businesses and people based on skills) is good for employees and businesses. This approach satisfies the business demand for agility as well as the employees’ need for growth.

In the era of talent, people want a job where they can grow and develop. It’s not all about the money.

What is a skills-first strategy?

A skills-first strategy means focusing on skills and competencies, rather than qualifications. Qualifications are important, as they demonstrate commitment and knowledge. But skills are necessary in today’s market, where there is a severe skills shortage and where employers are struggling to hire skilled people.

Results from the Australian Bureau of Statistics (ABS) show that job vacancies (as of February 2023) were 92.4% higher than they were in February 2020, prior to the start of the pandemic, reflecting ongoing labour shortages in most industries.

PwC is working with the World Economic Forum to help drive a skills-first labour market globally. They believe the move could unlock the labour market for 100 million people around the world. Their aim is to “empower one billion people with better education, skills and economic opportunity by 2030.” 

While building a skilled workforce is necessary for the future, you can also build skills within your organisation to strengthen your team.

Why your organisation needs to adopt a skills-first approach

According to an Australian CEO Survey, 90% of businesses expect to be affected by staffing shortages in 2023, with 36% reporting skills shortages as a reason why their business fails to grow. If you make upskilling employees a priority, you won’t have to face the hiring challenges of those seeking skilled talent. Keep the talent you have by satisfying their need to grow and develop.

Linda Jingfang Cai, LinkedIn’s VP of talent development, says that ‘the only constant in today’s talent market is uncertainty, and talent professionals are at the centre of steering organisations through this change.’ Linda believes ‘workplace learning is key to developing agile and resilient workforces to navigate these macro shifts.’

What skills are talent looking for?

LinkedIn’s Workplace Learning Report found that younger workers (aged 18–34) rank learning opportunities higher than even work-life balance. The most in-demand skills list revealed soft skills like leadership and communication are high on the list. These are skills that AI can’t replicate. Technical skills like software development and cloud computing are also desirable in the need to create a career for the future.

How to start incorporating a skills-first strategy

A skills-based strategy isn’t hard to put in place. It’s a mindset, rather than a one-off action. By understanding where there are skills gaps and talking to your employees to see where learning and development can be of benefit, you are in the best position to boost productivity through a better employee experience.

Here are some basic steps to get started:

Skills audit: Audit the skills you already have within your organisation. Where do you see the potential for improvements through training and development? 

Talk to your employees: What skills do they feel they need to improve on to be better at their job? Give people the opportunity to find a course or program they feel would benefit them. Otherwise, provide options for skills-based learning. Hearing their input is crucial because if they don’t see the value in it, it is a wasted investment.

Provide team learning and development opportunities via external sources: As well as individual learning, offer regular opportunities to learn via scheduled workshops or guest speakers.

Incorporate training and development opportunities within job descriptions: Boost your employer brand by letting people know you are committed to ongoing learning and development. 

Monitor and assess skills development: Regularly assess the value of the learning programs provided, and adjust to create the best outcome. 

Final thoughts

The key to creating a skills-first strategy is to make it relevant. Make it relevant to the job and relevant to your organisation. The idea is not to invest in employees so that they can take their newly found expertise elsewhere but to harness their new skills to improve the productivity of your organisation. Make your people part of the future by providing tools to empower them. 

Looking for more insights about talent attraction and engagement? Check out our employer resources.