Why a skills-first approach to the world of work will create more opportunities for both companies and professionals
Despite the climate of economic uncertainty around the world, many key economies across APAC – including Australia, India and Singapore – are still reporting low unemployment rates. In addition, LinkedIn data reflects an uptick in job postings across various sectors – indicating that companies in these industries will still be in competition for the best talent.
How can companies leverage talent with the right skills to remain agile and resilient amidst an uncertain landscape? And how can professionals stay relevant in a fast-changing job market? The answers to these questions lie in a skills-based approach to the world of work.
Companies that practise skills-based hiring benefit from larger talent pools
New LinkedIn data shows that a skills-first approach to hiring talent will ensure businesses have access to wider talent pools to meet their skills needs, especially those in sectors that are aggressively looking for talent.
For example, globally, we know that companies that hire for skills – instead of traditional proxies like direct experience – increase their talent pipeline by 9.4x as compared to those who hire based solely on direct job experience. Hiring for skills has an even bigger impact in APAC, helping companies in India increase their talent pipeline by 12x and by 13x in Indonesia.
And this holds true, regardless of sector.
This also applies to companies hiring for jobs that have seen steady growth, like Machine Learning Engineer and Back-end Developer. Globally, companies that hire for skills will see the pool of talent increase by 9.4x for these jobs (8.8x in Australia, 16.7x in India and 6.4x in Singapore).
A skills-based approach will create equitable outcomes for the workforce
Skill-based hiring is a way of levelling the playing field and ensuring that everyone has equal access to opportunities.
Gen Z – a generation that is starting their careers in a tough economic climate – will stand to benefit the most from skills-based hiring. Our data shows that the overall talent pool of Gen Z increases by 10.8x in Australia, 14.1x in India and 7x in Singapore. That said, we still see an increase across all generations of professionals – the overall talent pool of Millennials increases by 10x in Australia, 11.8x in India and 6.1x in Singapore. For Gen X, this is 9x in Australia, 10x in India and 5.7x in Singapore.
A skills-based approach to hiring also makes a huge difference amongst workers without bachelor’s degrees. When hiring for jobs that have seen steady growth, we see a global talent pool increase of 24% for this group, when compared to those who have a university education. In Australia, non-bachelor’s degree holders see a 17% difference, in India a 15% difference, and in Singapore a 9% difference.
And finally, women. Globally, a skills-first approach for jobs with the fewest women grows the talent pool for women 24% more than it does for men. Here are some examples:
In Australia, ‘Sales Director’ has 26% female representation, but if companies hire for skills, the overall talent pool of women increases by 45x, compared to men which increases 25x.
In India, ‘Solutions Architect’ has 15% female representation, but if companies hire for skills, the overall talent pool of women increases by 15x, compared to men which increases 10x.
In Singapore, ‘Solutions Architect’ has 20% female representation, but if companies hire for skills, the overall talent pool of women increases by 6x, compared to men which increases 4x.
What this tells us is that the lack of female representation in certain jobs may not be due to a shortage of women with the right skills, but may be caused by the biases propagated by hiring based on direct experience. A skills-first approach can increase female representation in the overall workforce, and especially in occupations where women do not feature prominently.
How business leaders and professionals can approach the world of work, skills first
In a world with an accelerating pace of technological change, where skills are evolving for any job, workers want opportunities to learn new, in-demand skills. The future lies with learning that doesn’t end when their education does.
Aside from placing an emphasis on skills when hiring, business leaders can also look at implementing programmes to upskill their existing employees. The stark truth is this – skill sets needed for jobs have changed by around 25% since 2015 and this number is expected to double by 2027. Business leaders who can understand the skills their employees have today, and the skills their company needs in the future, can hire or redeploy talent into growth areas.
A focus on upskilling can also ensure businesses are able to retain top talent. This is especially relevant in sectors where it’s hard to find the right talent. Companies that excel at internal mobility are able to retain employees for nearly 2x as long as companies that struggle with it (avg retention span 5.4 vs 2.9 yrs).
In Australia, after two years, an employee who has made an internal move has a 76% chance of staying at their company. While an employee who has not made an internal move has a 50% chance of staying.
In Singapore, after two years, an employee who has made an internal move has a 81% chance of staying at their company. An employee who has not made an internal move has a 54% chance of staying at the two-year mark.
And we know this is what employees want as well – recent data from LinkedIn’s Talent Trends report shows that top priorities jobseekers value beyond compensation are advancement, flexibility, and upskilling.
For professionals, adopting a growth mindset is key. Aside from picking up new skills related to jobs that have seen steady growth, professionals can place emphasis on picking up soft skills – including ‘Communication’, ‘Time management’, ‘Organisation’, ‘Problem-solving’, ‘Critical thinking’ and ‘Interpersonal skills’ – which are valued across multiple industries and jobs. This will help them remain agile and pivot where necessary.
Ultimately, a skills-first approach to the world of work helps connect businesses to talent, and talent to opportunity. In order to support companies and professionals in adapting to the changing world of work, LinkedIn will be unlocking the following courses for free between 16 December 2022 to 31 January 2023.
For professionals looking to pick up skills for ‘Back-end Developer’: Node.js Essential Training
For professionals looking to pick up skills for ‘Machine Learning Engineer’: Transitioning into Machine Learning Engineering
- For jobseekers: Nano Tips for Landing Your Dream Job with Austin Belcak