How to Adjust to a Skills-First Economy

Technology, globalization, and the gig economy have been changing the nature of work dramatically over the past 30 years. For much of the 20th Century, job success was measured by tenure at a company. People switched companies less, and followed career paths that were linear within a company. Today, people change roles and companies more often than ever, forcing individuals and hiring managers to focus on skills rather than traditional experience.

What is the skills economy?

People  previously pursued a linear journey within a single company, and were promoted based on tenure and experience.  Or, job seekers followed a relatively linear path from college through their careers to retirement. Technological transformation occurred, but not at the same pace we see today, and workers in many sectors had less opportunity to pursue entrepreneurial work. 

Today’s work environment is different however. Workers change companies more often than ever before, and technology transformation is rapidly changing the needs that employers have. 

Employers are focused on hiring based on skills, rather than educational degree or pedigree. Jobs are being defined by the skills necessary to perform specific tasks and responsibilities, rather than the title or past certifications an individual holds.

A person’s likelihood to secure a job no longer depends heavily on what college they attended or what titles they have held. Instead, employers look at what a person can bring to the table in terms of abilities and know-how. Prowess over Position. Tasks over Title. This shift in focus from tenure within a company to a focus on skills makes up the skills economy.

Opportunity for employers and for workers

A skills-first economy acts as a leveling ground for the  workforce. Those who can’t afford prestigious schools or expensive training have an opportunity to progress past those who can. In the skills economy, your abilities come first on your resume, not your time in a role or position. With the proper plan, virtually every worker can pursue careers they are most interested in. This new mindset provides everyone access to the same jobs. 

The shift to a skills based economy  is also beneficial for employers. Talented individuals are more likely to change jobs, providing employers with a larger talent pool to source from. Worker flexibility in the skills economy will allow employers to adapt their workforce more quickly to changes in their business model, or to swap fixed labor costs into more variable ones…hiring a virtual employee or freelancer for example.

How can employers adjust to a skills-first mindset?

The future is about adaptation, and for businesses that means transforming the way they recruit and level-up the skills within their organization. 

HR and hiring managers will need to play a major part in restructuring organizations for the flexibility found in the skills economy. The hierarchical structure of many organizations is already changing, as is the focus on geolocation of those performing roles and functions. Hiring will be determined based on skills mapping exercises rather than gaps in organizational structure. 

Learning and training programs will need to be revolutionized away from singular certification or one-time efforts, and adapted to ongoing programs that level-up a workforce within specific competencies. For a leader, their primary concern must be focused on  creating ongoing training programs that help the workforce constantly adapt at the speed of change.

How can job seekers adjust to a skills-first mindset?

Flexibility in employment opportunities places more emphasis on the job seeker to more clearly define their career pathway. Before, career paths within a specific organization were predictable, with advancement opportunities within an organization clearly defined. In the skills-based economy, advancement may include less defined jumps between companies or even between industries. Job seekers that define their interests and skills will be better positioned to succeed in the skills based economy.   

Similarly, job seekers will be expected to constantly add to their skills repertoire; constantly learning new abilities within their desired career path. If skills are the new currency of the labor force, complacency in your ongoing learning is one way to go bankrupt. Luckily, new skills are easier to obtain, thanks to digital innovation and the proliferation of online learning programs.

Hiring practices will change dramatically for job seekers as well. Instead of using a traditional resume and cover letter to secure jobs, job seekers should expect skills tests and problem solving interviews. Instead of in-person interviews, job seekers may find that more companies are reverting to virtual interviews and virtual hiring. With less emphasis being placed on physical location of work, job seekers will need to expand their networks beyond their physical location, and will need to network more freely in digital spaces.

Embracing the future now

The skills economy presents both challenges and opportunities for employers and job seekers alike. From radical change to small adjustments in career planning or organizational structure, the only thing neither group can afford to do is stand still. The skills economy is forcing everyone to adapt, and to adjust quickly.

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