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Unearthing Hidden Talent Through Skills-Based Talent Practices

In a quest to unearth non-obvious talent and build talent internally, some high-profile companies are shifting towards skills-based talent practices for select job functions. Creating a skills-based talent lifecycle from assessment and hiring through to learning, career development and mobility can be a strategic enabler and means of retaining and growing talent internally. While skills-based practices may appear simple on the surface, sophisticated thinking is needed to design the frameworks and processes. In addition, there is a significant amount of internal education, communication and change management required to ensure successful implementations and adoption by the business. Despite the challenges involved in shifting to skills-based practices, companies that have focused on problem solving for critical capabilities, project-by-project, are finding that the positive outcomes are well worth the effort.

The ability to identify talent in new ways is an important strategy in building organisational resilience. Finding scalable ways of educating and upskilling people is an increasingly important means of growing talent internally. Adopting skills-based practices to expand and diversify your talent pool requires a major cultural and mindset shift. Historically, strong branding has been associated with certain credentials and employment experiences. These methods contain inherent biases, but they have been the default assessment process for most companies for decades directly impacting the ability for organisations to hire the best candidates for roles.

It’s exciting times at HSBC. The organisation has developed and launched a skills-based hiring and re-skilling program in the Wealth and Personal Banking Business. The company is not only identifying talent by transferable skills, but they are also developing future skills through internal platforms such as Degreed and Talent Marketplace. HSBC’s focus is to further build an inclusive workplace by removing any barriers for career mobility for employees and future-proofing the bank by developing its talent pools and allowing employees to thrive.

Focusing on skills over experience is inherently more agile. We’re able to respond to what our customers need now, and in the future, rather than what was needed in the past. By innovating the way we attract, hire and develop our talent through our skills-based approaches, we are truly opening a world of opportunity for our colleagues and candidates alike to support our growth strategy.

Sue Kristiansen, Global Head of HR, COO & Digital Transformation, Wealth & Personal Banking at HSBC

Ericsson is another example of a successful project. A cross-functional team comprising engineers, sales, marketing and learning collaborated to build a well-defined skills model for their massive 5G transition. P&G created a skills taxonomy that assisted them in ramping up their supply chain talent during the pandemic. Reuters developed a skills taxonomy that enabled them to scale up their data science team.

Building skills-based talent practices involves creating a skills taxonomy and designing robust talent assessment methods. It can go further and expand into deploying strategic learning initiatives to grow the talent, designing skills-based career pathways and training internal hiring managers and stakeholders on the new practices. We discuss each of these in turn.

Building the Foundation: A “Skills Taxonomy”

A skills taxonomy is a list of skills and capabilities that an organisation requires to be successful. It is a way of classifying skills into groups and clusters, and it fosters a common language and understanding that can form the basis of effective talent management and workforce planning strategies. Skills taxonomies are unique to each organisation. A skills taxonomy is the foundation on which skills-based talent practices are built. In doing so, it is important to focus on the problem to be solved and avoid “boiling the ocean” by attempting to build an unwieldy and expensive taxonomy for the whole organisation.

Selecting the Talent: Skills-Based Hiring

Skills-based hiring involves interviewing and assessing candidates with a high priority on skills rather than education and work experience. Skills-based practices enable companies to attract a broader pool of talent better suited to the position in the long-term. It gives access to non-traditional candidates or people without typical credentials but who possess the transferable skills required for the role. Other large companies such as Boeing, Walmart, and IBM are exploring skills-based practices by removing specific educational requirements such as university or college degrees from certain jobs. In some instances, companies using AI-based skills platforms for hiring have more than tripled their entire candidate pipeline.

Successful skills-based hiring requires the development of robust skills assessment methodologies such as competency interviewing or behavioural interviewing frameworks, pre-screening assessments including work samples, assessment centres or online assessment. To move to skills-based hiring, talent acquisition teams require a significant shift in approach. They need to let go of learnt biases in assessing CVs, work experience or internal performance measures and increase the focus on evaluating transferrable skills.

Growing the Talent: Learning and Development

Putting people at the centre of learning and leadership development design is key for success. Learning needs can be pinpointed by assessing actual skills versus the skills needed according to the skills taxonomy. Well-crafted learning and leadership programs lead to increased internal mobility, enable access to new career pathways and increase talent retention. As a consequence, targeted learning can exploit an untapped opportunity for internal skills-based career progression.

Nurturing and Retaining the Talent: Skills-Based Career Pathways

Organisations can develop internal career roadmaps that show employees the skills and steps required for promotion regardless of educational qualification. From an employee perspective, it’s about building a great careers, with less limitation and with the right mind-set you can achieve your career ambitions whatever your background, characteristics or level of education. The advantage of skills-based career progression also is that the skills taxonomy and rigorous assessment tools enable the employer to proactively identify the person’s skills gaps and provide programs to facilitate that progression. In turn, this boosts internal mobility and employee retention. 48% of companies believe that improving talent progression and promotion processes is the most promising way of increasing talent available to their organisation. Respondents put talent progression ahead of offering higher wages and effective reskilling and upskilling.

Obstacles to a Skills-Based Approach

Shifting to skills-based practices takes organisational commitment, from a whole host of teams and functions that need to prioritise, align and work together to achieve. Developing the skills taxonomy, and being clear on your priorities e.g. short supply roles could help determine which roles could produce better results under a skills-based approach. However building confidence in the skills validation methodology requires an elevated level of internal capability. Implementing the skills-based practices, educating, communicating, and driving change requires resources. In an ideal world, each organisation would have an integrated technology platform to house the skills taxonomy and track employee skills, assessments, talent management plans, learning data and career pathways in a way that aligns with business objectives and succession plans.


Adoption of this new generation of skills-based practices is still evolving and companies that focus on solving problems, project-by-project, are experiencing success. With AI tools being utilised to enable, track and measure these initiatives, it will be exciting to watch as proof of concept is revealed in the data over the next few years.


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