The Power of Skills-Based Hiring and Development

Transcript

Karen

This is the Make It Work podcast. My name is Karen Kirton. And along with my co host Lachy Gray, we explore the future of work, and how we as leaders need to adapt. In series four, we're focusing on upskilling. And why it is the key to attracting and retaining great people and thriving in today's world. We aim to give you thought provoking ideas and practical takeaways that you can use to future proof your organization. In Episode One, we discussed how our roles at work are a collection of skills that can change over time. And that we're starting to transition away from thinking of what we do at work in terms of job titles, to actually the skills that we apply every day. And our federal government has launched a website with the Australian skills classification that's designed to show the underlying skills for jobs, which can help with job design, hiring and development, and you can go to jobs and skills.gov.au. And then you can follow that link there to the Australian skills classification. And advocates for skills based hiring, talk about some advantages, such as you know, having a larger talent pool, more diversity in hiring, increasing employee retention and better internal mobility. So I thought maybe we start with the larger talent pool. Because if we're identifying the skills that we need in our business, then each role means that we can open up the talent pool as we're hiring for skills, rather than focusing on past experience. And as I was researching this topic, I found there's a term in the US I don't know if you've heard this Locky called the paper ceiling. I haven't come across it before. And they said it's where those without a college education, which apparently is about 60% of the US workforce get stuck. That's their ceiling. So the theory is that if you can find people with the right transferable skills, but they may not have that formal qualification or have worked in your industry, then you know, you're you're capturing more people that would otherwise just drop out of the recruitment process. So it sounds easy, and it makes sense. But when you think of traditional recruiting, I was wondering, well, how would you attract people to apply that have transferable skills? Because as candidates we used to apply for jobs that we think have the experience that we have? And then how do we assess them to know if they're a potential candidate, so it kind of, you know, tips, that traditional recruitment role on its head, I did a bit of a Google search. And it wasn't super easy to find a solution in Australia. But there are platforms that seem to be designed so that you can upload the job as certain skills that every applicant complete skills test, and it gives you the shortlist. But then I wonder, well, is that a barrier of entry for candidates who can do that one click application that they use to on job boards? So do you actually reduce the candidate pool? You know, unless of course, you're someone like Google or Canva that are fighting off candidates? So what are your thoughts thinking when it comes to you know, this idea of just doing skills based hiring? Yeah,

Lachy

It's a, it's a big change, isn't it? I think it's a positive one. I think we're still in the early stages of it. I think it's reflective of how a lot of us work. And that what we do in our roles, and what's expected of us changes really quickly. And that we're more likely these days, especially as knowledge workers to be working in cross functional teams. And using a broader skill set than perhaps our role. title suggests. Because I've thought this, but hiring it, ya know, I think years of experience, for example, can be misleading. Because if I say, I've had five years of experience as a managing director, without knowing the type of business, the size of the team, the business maturity, it's not that helpful. And I could have been doing the same thing year after year. So I've actually got one year of experience that I've repeated five times. So I think focusing on the skills that contribute to experience and are broadly grouped into a role is a step forward. And I assume that the taxonomy around the skills will evolve and mature as this approach picks up speed. Yeah, from the IRAs point of view, yeah, I think this is going to take some time. I think we're still trying to hire the best person for the role. So how do we do that focusing more on skills that role experience, and what does the required level of competency look like, for that skill? So when I think of Got it, I think about how we do it, ya know, it's probably similar in approach to hiring for a technical role. And we're doing this right now, actually. So hiring a software developer. So part of the processes will probably pay a program so our CTO will program with the candidate, say for an hour or two, see their skills and action, hear them talking through their approach, hear their critical thinking, hear the questions that they ask the identify if indentification of potential problems, and so on. So that is much more helpful than knowing how many years experience I think that they've had. Or perhaps you combine those two bits of information. When we hired our product manager Steph, we asked are the candidates the shortlist candidates to prepare and present a product, teardown of a product I use regularly, along with suggestions for how it could be improved. So we could see their research skills, how they presented it, how they communicate visually and verbally, again, hear their critical thinking. And ultimately, I guess, trying to get a sense of what that actually be like in the role.

Karen

Yeah, and I think that's so true. Like even what you're saying, with the developer as well, like just having someone actually talk through the way that they do something. Because even someone with exactly the same experience might do the things differently. So so how does that fit in with, you know, your culture and the way that you want things done and within your values as well. So it's a really good example of adding in that practical element into the interviewing process, because so many people just skip that because it feels a bit difficult. Which is where we end up with, you know, having one or two discussions for an interview, which, as we've talked about before, is so difficult to know, is someone the right person for the job based on essentially an hour and a half's time with them. Yeah, you know, just really tricky. And then, you know, if we look more at that, you know, diversity in hiring, you know, I think this is where skills come into it as well, because they're transferable skills can be a way to break through those roles that traditionally have the gender bias and can remove that unconscious bias, which we spoke about in episode 16. And I think this comes back to the importance of identifying those skills in the first place with as little bias as possible. You know, perhaps his government skill classification will help with that.

Lachy

I hope so. I do think it democratizes the hiring process, because candidates aren't being pigeonholed into roles and companies they've worked at, or, as you said, at the start universities, where they studied. And I've, that's, it amazes me that it's, it's still at 60%, say in the US. Because I don't know, I guess like for me, I've never put a huge amount of weight on it. But I appreciate that there are some jobs, occupations where it's really important, you know, medical science a doctor, you kind of what? I'm good with instruments. Yeah. Thank you my fate. But for knowledge work. Yeah, I think it's like, for me, it's when I look at someone who's done a degree, it's like, Are you stuck that out for four years? For example? Yeah. Okay, rather than exactly what they learned, because we're also assuming that they actually went to all the lectures. Yeah, they actually paid attention, which, as we know, you, you are not usually just out of school. So there's a lot of other things going on your life. So yeah, I think that's a positive. And I think how we classify competence in his skills is important. And, you know, to your point, again, at the start, I hope it's not a whole bunch of skill tests, because I can see LinkedIn is jumping on this and go, Oh, great. I mean, because there are 1000s of skills, I believe. Yeah, my understanding is that companies that have started doing this, and the federal government and so on, there are 1000s. And there's a lot that are very closely related, and there's new ones out every day. So yeah, I mean, you, you could get to the point, I guess we do all these skill tests, but that's a very quantitative approach. So I, I hope that there is that balance, and it is going to require some work, because we've started doing it that ya know, after discussions that I had with you, yeah, when we were preparing for that first episode. I find it hard. It's because you This is not that taxonomy yet that that federal government website is helpful, but it's still quite broad I find. And of course, it doesn't line up necessarily with the roles that you have. So you've got to do a fair bit of work to, to get it going. But I think we need to do that it's in a really important first step to have that conversation.

Karen

Yeah, I am, I asked a client to be a guinea pig for us, because they've just created a new general manager role, which goes back to what you said before, about, you know, an MD with five years experience, like the general managers are saying, like, in different companies, that's completely different. And we thought, you know, let's have a look at the skills classification that's there. And then, you know, can we do the job design, using that as a bit of a basis to try and pull out those transferable skills? And we're in the middle of that now. So, yeah, it is tricky. Like, it's not so because as much as it gives you that broad base, because the general manager, you know, get his financial aspects and operational and people and, you know, each organization and the type of industry as well is going to change those focus areas, too. Yeah, I had a bit of a laugh when he said about LinkedIn, because I can absolutely see that happening. Because I always kind of giggle when LinkedIn tells me that, you know, here are the skills that someone's endorsed you for, and it's like, what does that matter? Like? Does anyone actually, I'd love to know, if you're listening, and you do look at people's skills on LinkedIn, let me you know, because it's kind of self reported, or other people just say what it is, anyway. Yeah, but you're right, that's potentially a basis that they'll build on over time. Yeah, so lastly, we look at you know, increasing employee retention, the theory is that if you're a good fit for the role, and you're able to play to your strengths, then you will stay longer, which also relates to the idea that it's more internal mobility. So if you hire from transferable skills, then you have a bigger internal pool of applicants, and therefore you can move people around and extend their tenure with you. And so going back to the doctor thing, you know, this is still an issue, because there will be some technical know how for some roles, and the person will need to develop those. So it's not always a case of just relying on those transferable skills. So you know, employee development, and actually being quite intentional with that, I think is still super important.

Lachy

Oh, for sure. Yeah. But I think that that opportunity for people to say, These are the skills I want to develop. I think that's really exciting. And how we upskill is a big question. If we consider the speed of change, that new skills are created every day. That stat from the last episode, while Episode One, that 40% of staff will require upscaling every six months? Like that's very fast. Yeah. And there's probably some listeners thinking, Ah, that's, that's just not possible. So I think the whole process will move quickly, it puts a pressure on all of us. But can you you can also say, Well, that's the role I want to do. And if the organization has has mapped this to some point, well, then it could say, well, to develop these skills, here's a path that you can take. And then he's matched learning to that path. So I think that's really positive. Because what I see often is that learning is kind of separate. And well, there's different types of learning organization, there's the mandatory learning all the compliance stuff, a lot of the HR stuff, unfortunately fits into that bucket, Karen, box has to be done. And you have the more growth oriented professional development learning. And there's a sense that there's not a huge amount of time for that. But how, and I guess you're reliant on the your manager, to what extent do they invest their time in your learning and planning that out, and the organization, he sees it as a priority. And we find the companies that have the best cultures in terms of staff, you know, lower staff turnover, high staff retention, innovation, productivity, and so on. They do this. They do this in some form already. But if you can map it, so that it lines up. So you can say, well, this is where I want to go, this is where I am. What's the gap? And here are some pathways to do that. And if it's broken down, and there's micro learning, there might be some a face to face training session you can do You can work towards that. I think that's really powerful. Especially if you, you might take one or two years to work towards something, but you've got a path. And I think that's perhaps something that some companies lack. And there's a reason why people go go elsewhere. Because they can't see that path. Yeah. And they feel stagnant. Stuck. You're stagnant. Yeah, doesn't it? Yeah. There's a challenge to that. Yeah, HR platforms have historically matched the traditional job and role hierarchy, because that's the way it's been for a very long time. So then, yeah, like having to change that, to this skills based model is a, it's quite a big change. And what what we found last time we're talking about it is that the onus can be on the employee to upskill themselves. So 95% of leaders, in this study expected employees to pick up new skills on the job. And how they're going to do that was nice. What's my sis? Magically? Yeah, I will fix all the problems. I've been that's been tongue in cheek, I do. I do think I does have a place here. And eBay, but that's the sort of how there's still that work that's required, which is, well, what skills does the business need? What skills do people have? And where's the gap? And what do we need to build over time? And then we can look at the technology to help us do it.

Karen

Yeah, and I think what you're saying about having that pathway, as well, like, I hear that a lot from employees like it's, it's when they say I don't feel like I have enough development or growth, it's more I just don't, I don't see the path. Whereas what managers or business owners here is a lot of training calls, but that's actually not what they want. And so then you end up in this kind of weird situation where the business is saying, well, we can't afford to give everybody training, but the the employees themselves, particularly the younger generations now, I say, Well, no, it's not about that. I actually just, I want to say what this means for me. Because, you know, they're, they're thinking many jobs ahead. And so I think if you have those skills laid out, then it's not just well, this is what you can develop while you're here. But actually, they then have something that they can show in future in terms of, well, this is how I'm developing my career pathway, because it can be difficult to explain to people the jobs that you've done, because job titles can be the same across organizations and in completely different things. So I think you're not just developing your people, you're actually helping them to get a career path as well, which is really powerful. And it sounds counterintuitive, you know, why would I build a career path for someone to go elsewhere, but that is how you keep them longer. You know, because particularly in smaller businesses, you're you're never going to have all of those roles that they can promote through. But if you can keep someone for five years instead of two years, what a massive benefit for the masses. Yeah, as...
Lachy

we've invested in these career conversations, last two years, and that's a step towards understanding where someone wants to be in the future. And that's not at Yano, like this is way into the future. Where they are now in that gap. And that's a first step towards this model that we're talking about. And we're small, and we have nowhere near figuring this out yet, but is a really helpful step because that just helps us even plan 12 months out, okay, well, what are the specific skills you want to work on in the next 12 months, and then we can map training and learning and other growth and it might be sitting in on a meeting with a more senior staff member or in another part of the business or working on presentations or documentation or some other part of their role that perhaps they aren't doing so much now. But they want to develop that skill? So at least having that conversation I think is powerful to your point because it makes us feel heard. And that there is move and there is progress towards it, even though it might take some time.

Karen

Yeah, because I think we're where people get really demotivated is when they feel stuck. Yeah. So, you know, they feel like I've got no progression here. I don't want to know what the next step is, you know, but maybe there's something going on in my personal life, which means I don't want to change jobs right now. Which actually is the manager or the business owner is probably the worst situation for you because then they're not as productive because they're feeling stuck, which is not a good place to be. Whereas sometimes what I see is that managers they'll say, well, that person is not going to move anywhere, because you know, they're finishing the uni degree or they've got kids or you know, whatever it might be, like, Yeah, but they may not move anywhere. But if they're not actually fully engaged with the business, that's not a good outcome, either. So, yeah, I think that, you know, I am on board with this idea of hiring and developing to skills and not jobs. But I do think it can be quite tricky. I think that it's also business dependent. And, you know, if I reflect on my own business, and amplify HR, you know, part of our value proposition is that we are giving businesses and outsourced HR partner to work with that's, you know, just dedicated to them. So they're not dealing with call centers. And, you know, so business owners are looking for someone that has experience they want, you know, 15 years or more experience, that they have confidence that they're getting the right level of support from that person. So, you know, for me, it's kind of market driven in a way because the potential clients are expecting that level of expertise. So I still need to hire with that HR experience in mind, but then I can layer in those skills that we're looking for. So, for example, I don't look to hire consultants, that's to me not important at all. So I think it's just understanding, you know, what's maybe that technical component that we need to have, but then what are actually the skills rather than the rest of the experience? What about with you, Yarno?

Lachy

Yeah. That's that's interesting, isn't it? Always thinking about for you imagine if clients could select who they chat with based on a specific skill set that they're after?

Karen

Thank you people that it might

Lachy

be a terrible idea.

Karen

To do capacity planning is that is when you can?

Lachy

Yeah, we tried harder skills. And we've started early days, mapping of skills per role to inform our internal learning approach. So what learning can we all do? For example, we did whole brain thinking with you, we've done a few VIP training sessions. But then more team focus, because of the specific skills that that team is using, or Michael customer facing, Jana was, will do a specific type of learning. I think it fits in quite nicely with our learning cadence, you know, where an internal expert shares their knowledge on a topic to everyone in the team. Or we do a Yano campaign on one or more topics every month. So yeah, trying to break down the role into specific skills. And it is starting conversations around that, and where do we feel strong? Where are the areas for improvement, and just taking some first steps towards it? I think that's been really beneficial for us. Over the last 12 months, this is going to be a an ongoing project, as we learned about how this can work, and get the feedback from the team and the market as well.

Karen

Yeah, and I think my takeaways for today out of these episodes is what you just said, you know, just take those first steps, because it can feel overwhelming. I think some of the things that, you know, you said about the thinking about years of experience, or is it five years? Or is it one year repeated five times? I love that, because I don't know how many times I've come across managers that put in position descriptions and job ads, and they need so many years of experience. And I always argue against that a little bit, because I think, you know, someone's got five years or 10 years, but what does that actually mean? Because if you put that, you know, overtly into job ads, etc, it can, you know, start to bring more bias into the recruitment process as well. So, you know, I think there's other ways to express experience rather than my years. And I think the other thing I would encourage everyone to do today is just check out that Jobs and Skills website. And even if you just start with your own role, and then you can at least go okay, well, how, you know, comparable, is that to what I'm doing today, and then you can start to think about well, how do I build this into the roles in the business to help with hiring and developing the skills? What about fee locking?

Lachy

Yeah. I liked what you said about the describe the mismatch between employees wanting a growth plan, and employers assuming they want training. I think it's such a good point. And we see that often too. So this highlights the importance of having the conversation the career conversations, one example even in one on ones and just understanding like, what do people want? Not saying that we're going to deliver at all, but starting off, and then yet zeroing in on a couple areas to focus on and going from there. But I liked your point about more diversity in hiring. Here, we talk about that. But it can be hard to know how to put that into practice. I think this is one way. So yeah. Not being constrained on years of experience, as you say, you asked for five years plus someone with four years like, oh, well, they're not gonna even look at me. Yeah. And we've also started just putting a sentence into our job ad saying, if you think you're a great fit, but you don't feel like you meet all the criteria, still get in touch. And I hope that that helps with this, as well as like, hey, let's still talk about it. Because we're making an assumption when we say all the things we're asking for, like, we have what we think we're talking about, and then there's how that's received when someone's reading it. And that can be two different things. So it does take more time.

Karen

Yeah.

Lachy

But yeah, it takes more time. But I think, ultimately, like to your point, we want people to stay around for many years. If we can get five years. I mean, that's awesome. So I think it's, it's important to invest a bit more time upfront. To get that clarity, I think it gives us a better chance at achieving that retention target.

Karen

Excellent. Well, thank you for discussing this topic with me today, Lachy and links to our articles, and anything else we've discussed will be over on our websites amplify hr.com.au and yahoo.com.au. Just follow the links to the podcast section. And if you've received value from this episode, we'd love it if you leave a rating or review over at Apple podcasts. And just a reminder, we also have that link tree set up with a special offer for our podcast listeners. So it's link tray slash make it work podcast. Episodes are released every two weeks, so click the subscribe button to be notified when the next episode is available. Any final thoughts? Lucky.

Lachy

Well, as you always encouraged me to do Karen, what's one thing that you're going to do off the back of this episode and put a timeframe on it?

Karen

Yes, that's a very good idea, but to say especially as we're coming into the end of the year, and so everyone get a very full plate. So thanks so much for joining us, and we'll see you next time on the Make it Work podcast.