Traditional work models based on hierarchy and good old-fashioned job roles are giving way to skills-based workforce models. In this newer work model, employees are hired and/or assigned to work projects based on the entirety of what they can do rather than limiting them to what they have done in the past. But what does that mean, exactly?
"Skills-based hiring is the practice of screening and hiring workers based on the skills and capabilities they can bring to the table — rather than their degree or prior job experience," explains Michael Griffiths, a senior partner in Deloitte's Workforce Transformation practice.
In this context, Deloitte defines "skills" as encompassing a candidate's or employee's measurable abilities in three areas of expertise:
- Hard or technical skills (such as coding, data analysis, and accounting)
- Human capabilities (such as critical thinking and emotional intelligence)
- Potential (including latent qualities, abilities, or adjacent or transferrable skills that may be developed and lead to future success)
Most industry analysts similarly define the skills assessed in skill-based hiring. But don't go thinking that an employee can just claim skills, or an employer can guess at them.
"By using AI to understand the skills and capabilities workers have that are correlated to their success — using "affirmative" filters that "screen in" based on skills and demonstrated capabilities, even if these workers have never had a similar job before — organizations can open the doors of opportunity and movement to millions who have previously been shut out," says Griffiths.
A McKinsey report points to new AI-based talent management systems that "can infer adjacent skills to eliminate guesswork." It cites Career Exchange, a talent intelligence platform the firm as well as numerous big employers support, as an example.
Hiring and promotion biases are more likely to be avoided or at least diminished in the skills-based model. Meanwhile, diversity and inclusiveness tend to climb.
"When workers are selected based more on their verified, fact-based skills than on pedigree or subjective judgements of others, then the chances of bias creeping in to hiring decisions is reduced," says Griffiths.