If there’s one buzzword that’s been gaining traction among talent professionals and in the labour market recently, it’s “skills-first”.

But what does ‘skills-first’ mean? A skills-first approach to hiring means focusing on whether a person has the right skills for a job, rather than simply focusing on their educational background, job history or experience. 

For the longest time, people were hired based on ‘traditional’ credentials such as what degree they had, where they worked or who they knew. But now, things are starting to change. Businesses are paying more attention to skills. Applicants, too, have grown better at explaining the value they bring to the table.

For hirers, putting skills first is crucial. It doesn’t just increase the size of employer talent pools. It can also help employers thrive while developing a more nimble, engaged and diverse workforce, and helping to plug the skills gaps we currently have in Australia.

However, there are challenges when it comes to skills-first hiring. To understand the challenges – and ideate the solutions – LinkedIn brought together more than 300 senior talent and HR professionals for workshops in Sydney and Melbourne. Here are some of their key insights and takeaways. 

The benefits of skills-first hiring

First, let’s look at the context. Seventy-two per cent of workshop participants agreed skills-first is the future of work. And, according to LinkedIn’s 2023 Future of Recruiting report, 96 per cent of recruiting experts in Australia and New Zealand agree that understanding the skills employees do and don’t have is necessary to make informed talent decisions. And 83 per cent of them expect skills-first hiring to be a priority for their organisation in the next 18 months.

According to staffing firm ManpowerGroup, global talent shortages are at a 17-year high, with more than three quarters of employers unable to find talent with the right technical and soft skills.

So how can skills-first help? LinkedIn’s data shows skills-first hiring has various benefits:

1. Increases talent pools by 10.2x in Australia. This makes it easier for organisations to find quality applicants for hard-to-fill roles.
2. Makes access to jobs more democratic and equitable. In fields where women have traditionally been underrepresented, a skills-first approach increases the proportion of women in talent pools by 24 per cent more than it would for men.

Bridging the skills gap

“Job titles are no longer currency. Skills are. And we need to spend 15 per cent of our working week learning and developing new skills in order to stay current.” – Ben Hamer, Future of Work expert and keynote speaker at LinkedIn’s workshop event.

The World Economic Forum suggests that by 2025, 50 per cent of employees will need reskilling. With the current uncertain economic backdrop, upskilling and reskilling are critical. Businesses must continue to understand the skills their employees have, and the skills they need.

Workshop participants were also feeling the pinch. They identified critical roles they were struggling to fill; these ranged widely across industries from engineering, data and cybersecurity to sales and nursing roles.

Here are the top nine tactics talent and L&D professionals were looking at to bridge the skills gap: 

1. Traineeships and graduate programs
2. Brand advocacy and marketing
3. Mentoring, reskilling and transferring internal talent 
4. Career pathways and capability frameworks
5. Succession planning
6. Offering flexible work arrangements 
7. Networking and referrals
8. Encouraging diversity, equity and inclusion 
9. Sourcing talent from overseas. 

Challenges to going skills-first

While companies are increasingly aware of the importance of a skills-first approach, they are at varying stages in their journey. 

LinkedIn’s Head of Public Sector – Australia and New Zealand, Becky Tyler, highlighted that 83 per cent of recruiting professionals in Australia expect skills-first hiring to be a priority for their company in the next 18 months. But only 43 per cent are in the program development stage.

The main obstacles participants identified:

1. A lack of buy-in from senior leadership, who might be risk-averse or not fully aware of the benefits of a skills-first approach
2. Traditional recruitment expectations, such as wanting a 10/10 skills match
3. A lack of time, budget and resources for learning and development.

 The proposed solutions:

1. Identify critical skills and have a competency framework
2. Use data and case studies to educate leaders 
3. Allocate time and resources for learning and development 
4. Make career pathways more visible
5. Hire junior talent and let them grow
6. Succession planning
7. Embrace diversity.

Key insights and takeaways for creating a skills-first strategy

Participants emerged from the workshop with several insights:

1. The importance of having a skills framework to identify the necessary skills, and map out how they might be systematically assessed and developed within the company. Technical skills are vital, but so are soft skills.
2. Use data-driven storytelling to demonstrate the benefits of putting skills first. Communicating the business value of the skills-first approach – for instance, its effect on staff retention – could help change senior leaders’ mindsets. 
3. Re/upskilling existing staff and allowing them to transfer internally within the organisation could also help fill critical roles. 
4. Companies will need to dedicate time and resources to learning and development, treating it as essential rather than an “add-on”.

As organisations evolve their talent strategies, there are plenty of resources that can help.One is LinkedIn’s Learning Hub, which has courses that can help companies with development of their upskilling and reskilling strategies, including:

• Upskilling and reskilling the workforce 
• Promoting internal mobility as a manager 
• Attracting, hiring and working with Gen Z
• Diversity recruiting 
• Creating a culture of learning.

LinkedIn Learning is the only development product that uses member data to create and curate courses and content based on emerging skills we see on the platform, and provides  up-to-date skill building to help and empower individual career growth.

It currently has a content library of 20K+ courses across tech, business and creative categories, led by about 3 thousand  industry experts from around the world. Sixty brand-new courses are added every week. 

To find out more about how to future-proof your talent strategy, contact your LinkedIn representative or one of our talent specialists.