Skills data: The new currency for navigating today's turbulent job market

Skills-based workforce strategy has never gotten this much attention before. In my recent conversations with business leaders, I’ve heard a strong need for shifting from role-based planning to skills-based planning. Why is it now the time? A few different factors are making this a priority – the gig economy, intense competition for talent, and Diversity, Equity & Inclusion (DEI) efforts.

At the 2022 Talent Connect last Fall, LinkedIn’s largest conference for talent executives, I talked to as many CHROs, Chief Learning Officers, Talent Management executives about their skills strategy as I could over the 3-day period. The theme was clear across industries: we want to move towards skills-based strategy, but we don’t have enough skills data on our employees. It did not matter what their HCM and LMS were. It did not matter the frequency of their performance management cycle. The barrier came down to the lack of data on what skills the employees possess.

The top three opportunities for skills data in talent are: (1) internal talent mobility, (2) diversity in hiring, and (3) focused learning and development efforts.

Internal talent mobility

Having data on employee skills plays a critical role for improving internal mobility because one of the first steps in creating a skills-based strategy is to first understand skills your organization will need in the future to execute the business strategy.

For instance, if the business strategy of a tech company is shifting from back-end development to be more focused on front-end development in the future, it would be helpful to know the split of front- and back-end skills within the current employee population. If you know how many employees have front-end skills (such as JavaScript, HTML, CSS) vs. back-end skills (such as NodeJS, Java, and Python) and those who are skilled in both front- and back-end development, you can create a workforce plan with more granularity and flexibility.

Talent acquisition teams can also use the skills data to fill otherwise difficult-to-fill roles by finding candidates with adjacent skills. Improving internal mobility is an excellent way to improve talent retention. The latest LinkedIn Talent Trends Report shows that employees who made an internal move have a 75% chance of staying at their company after two years, compared to 56% for employees who haven’t.

Diversity in hiring

How does having skills data on employees improve diversity of hiring? Many organizations facing a talent shortage or intense competition have recently relaxed the requirement for bachelor’s degrees on entry-level roles. Instead, the focus has shifted towards evaluating candidates whether they possess the necessary skills to perform the role. Given the significant gap in bachelor’s degree attainment across race and ethnic groups, requiring specific skills rather than bachelor’s degree opens up the talent pool significantly.

Focused learning and development efforts

The third opportunity for skills data is focused learning and development efforts. Ideally, the learning and development strategy is created to ensure employees across the organization have the skills to deliver and achieve business goals. In organizations with robust skills-based workforce plans, there are team- and individual-level development plans.

Even if there isn’t an enterprise-wide workforce plan with such detailed analysis, it is helpful to focus training efforts on the skills the organization needs in the future. In the example above, the business strategy of a tech company is shifting from back-end development to be more front-end focused. The learning and development function can offer more courses on front-end development or find new ways to gamify specific courses to promote learning.

How do you get started if you have no data on skills right now or if you have tried and failed to gain leadership buy-in?

I have learned several lessons from creating and implementing a skills-based workforce strategy in F500 companies. The most important being not to boil the ocean. For large organizations, it is unrealistic to have up-to-date skills data on every employee. Focus instead on the roles and functions that have the largest impact on the future growth of the business, so you can secure the buy-in from senior leaders and employees to make time for providing, validating skills data, and collaborating on the action plan to close skills gaps longer-term. I have seen organizations make the mistake of piloting within HR or HRIT because it is “easiest”. Those pilots often do not scale because the skillsets are not easily transferable, so senior leaders quickly lose interest when easily translate into business metrics.

Whether you want to hire or promote employees based on skills they have rather than degrees or past job experience, skills data are your key to unlock the potential.

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Dr. Serena Huang is the founder of Data With Serena and the Chief Data Officer of ABE.work. Serena will be presenting at People Analytics World Conference in London on April 20^th, followed by the Skills-Frist Milwaukee Talent Development Conference at GE Healthcare on May 18^th. She will be releasing a new People Analytics course on developing a skills-first workforce strategy using data this summer, available on the LinkedIn platform to all 850 million users.