A data-driven, skills-based approach to talent management and hiring can
improve the employee experience and increase retention.
By Jarin Schmidt
Companies have been challenged to adapt to the digital age for as long as technology has been around. Some companies have figured out how to integrate technology into their foundational operations, while others still aren’t there yet. According to a recent McKinsey global survey of executives, those that did rise to meet the new digital needs of the COVID-19 crisis by experimenting with new technologies and investing in digital tools were twice as likely to report revenue growth as those that didn’t.
When it comes to talent management, the digital age ushered in a staggering number of opportunities to reevaluate talent strategy as a whole. New technologies, different approaches to where work gets done, and a fresh look at a larger talent pool all contribute to better employee engagement and retention.
To create a more engaged, connected employee experience, companies can make the most of digital tools to hire new employees, re-deploy existing employees, and train both with the skills necessary to future-proof their careers.
A New Approach to Sourcing Talent
In-demand jobs are currently facing a shortage of workers, in part due to stringent and outdated hiring requirements for college degrees and years of relevant experience. By adopting a skills-based approach to sourcing talent, HR leaders can expand their available talent pools, incorporating the more than 70 million American workers with no bachelor’s degree who still have the right skills and knowledge for difficult positions.
Skills-based hiring doesn’t discount academic or professional experience; rather, it avoids making those the primary proxies for determining if someone is a good fit for a role. In many cases, despite being as qualified as someone with a college degree, experienced workers get automatically screened out of the recruitment process. Skills based hiring increases the talent pool by focusing on the skills needed to perform a job, reinforced by certifications and digital credentials rather than years of experience and a degree.
This new approach, which is being increasingly adopted by organizations like Google, IBM, and even the U.S. federal government, leverages more relevant signals of competency alongside technology that provides context and verification of those skills. When the workforce is built from a skills-first approach, employers have a foundation for employee engagement that will benefit their organization and their employees in a myriad of ways.
A Digital Approach Drives Employee Retention
An investment in digital talent management tools and processes increases the likelihood for existing employees to find new positions within their organization. Rather than stagnating in their current role, employees can grow their careers, seeking higher level positions in their department or finding an entirely new role that suits their skills.
Traditionally, it’s far easier to find growth opportunities at other companies instead of moving up the ladder. Internal mobility, however, creates a culture of advancement and has significant benefits for any organization. Despite employee tenure length dropping every year, SHRM reports that internal mobility opportunities lead to increased engagement, lower costs, and a shorter hiring process -and can lead to a 41% higher retention rate. These are all indicators of a better, more personalized employee experience.
Organizations that actively promote education for and engagement with different roles will see a significant improvement in employee engagement. In fact, it’s more than possible to retain top talent by offering guidance on next steps and opportunities for promotions and new roles. Providing a more personalized experience that not only shows employees how to learn new competencies but also where they can put them into practice leads to a significant increase in retention.
Where to Start the Transformation
Transparency is paramount when implementing a new digital talent management strategy. Companies using skills-based hiring practices will receive more qualified applicants and a larger, more diverse talent pool. Existing employees will be more willing to stay at companies that encourage them to learn new skills and pursue opportunities for advancement.
Digital credentials are a verifiable metric to use when gauging experience and skills. New hires without college degrees may still have the right experience and qualifications, and data-rich digital credentials can help signal specific skills. A good start to transforming talent management is to start accepting digital credentials as relevant, proven experience for a position.
Existing employees can also use digital credentials to find new positions within their organization. Completed credentials offer details on proven skills as well as adjacent or transferable skills that could benefit other sectors or verticals. Promoting continued education and new skills leads to higher productivity and overall happiness.
With more engaged employees, organizations can start narrowing their skill gaps. Creating a new digital talent management strategy that emphasizes mobility and utilizes skills-based hiring simultaneously increases the number of prospective employees and incentivizes existing employees to stay and grow with an organization.
Jarin Schmidt is chief experience officer at Credly.