With the tightest labour market in the last 20 years - per the ONS UK unemployment this summer was at 3.8% - and massive inflationary pressures, employers are struggling to recruit and retain talent while improving productivity.
These challenges can be broken down into three discrete and solvable problems that we have heard from our partners. On the 15th September Skills Builder will launch a study revealing the steps employers large and small are taking toward solving them.
1. “Noise in our recruitment processes is a barrier to hiring a diverse team with the skills we need.”
Recruitment processes exist to predict future performance. However, in the words of Daniel Kahneman, "standard interviews are not very informative. To put it more starkly, they are often useless." Indeed, research shows many processes don’t do much better than random chance (see for example Kuncel et al). To be sure of success we need to:
- identify what top performance looks like today and in the future
- identify the variables such as skills that correlate with top performance
- measure those variables effectively
There is a clear competitive advantage in being able to better predict future performance through your recruitment processes than your competitors. You still need to attract candidates, but if you can best identify the individuals most likely to deliver - and shape your future - strategy then you will be more likely to succeed.
At the same time, there is growing recognition that those recruits should be broadly representative of our society. Much progress has been made over the last decade by businesses looking to reduce psychological bias in their recruitment processes, for example through the widespread practice of scoring applications without personal information. While removing these biases are an important step to building more diverse and inclusive teams, it’s evident that there is more to do.
But recruitment decisions are massively noisy. They often involve multiple stakeholders across a business, meaning decision making can be variable and unpredictable. The compound effect of randomness at each stage can reduce the value of a recruitment process to almost nothing if:
- the skills required for the role haven’t been clearly defined
- the capabilities being assessed for by each recruitment exercise are therefore not clearly defined
- the success criteria, or ‘what good looks like’, for each exercise do not have consistent, reliable, clear measures
- the candidates do not know what the success criteria for each exercise are
- the recruiting managers have different approaches and interpretations of scoring
So employers are increasingly asking how they can clearly identify and measure skills and implement this in their recruitment processes in a way that supports recruitment of a diverse and skilled team.
2. “Our team needs to rapidly learn new technical skills and redeploy across the business, but we haven’t adopted a standardised approach to building the transferable skills that enable this.”
McKinsey found in 2020 that 87 percent of employers were either experiencing skills gaps or expected them within a few years. Since the pandemic, 58 percent now say that closing skill gaps in their companies’ workforces has become an even higher priority.
But given the labour market, recruiting these skills may not be an option. Upskilling and redeploying talent across organisations will be essential. But the technologies and technical skills demanded to improve productivity change rapidly. To adapt fast, employees need those highly transferable skills that boost their ability to move into another domain and learn new technical skills.
Many employers explicitly recognise the importance of skills like problem solving, creativity and leadership. Some even recruit for them successfully. But it can be hard to put the same sort of rigour behind these that you might easily attribute to skills like accounting, project management or engineering. How do you standardise and scale problem solving across different levels and departments? How can you combine professional development with performance management in a way that is coherent?
3. “We want to support our communities and the talent of tomorrow through our CSR but bridging the gap between education and employment is hard, as is evidencing the impact of our work.”
Many responsible businesses care about their local communities and do impactful work to support them. At the same time, they are looking for ways to ensure that they have a diverse and skilled workforce to recruit from in the future.
Employers running outreach or CSR programmes often aim to build a range of skills and knowledge. One of the challenges is doing this in a way that is both relevant for the programme participants and also for potential future employment in their organisations. What can I teach an eight year old that will be relevant when they enter the workforce in 10-15 years’ time?
Another hurdle is targeting learning effectively and understanding the impact that the outreach programme is having. Organisations are likely to have deep expertise or competencies in their sector, but what about in building learning content or programmes backed up by the science of learning? With a growing need to hit ESG targets with demonstrable data on the impact of outreach or CSR, there is growing demand for tools that can evidence just how effective programmes are and show how they can continue to improve.
Sign up to the webinar on 15th September to hear more.