Why hiring for skills should always take top priority

Recent findings from the ONS and our own Claro-powered data revealed that the average number of UK job postings in Q1 2024 were down on Q3 and Q4 2023. While it is not surprising to see vacancy numbers fall at the start of the year, given that the labor market has shown signs of cooling, we can’t forget that job vacancies are still significantly higher than pre-pandemic levels. That said, with skill shortages still acute across many sectors, employers can ill afford to take the foot off the gas when it comes to fine-tuning talent attraction and retention strategies.

If we examine the figures more closely, we find that the fall in the employment rate can be attributed to a drop in non-permanent workers with permanent headcount actually rising. This would suggest that employers are now more confident about economic prospects, relying less on contingent labor while investing in their permanent workforce. And with the consumer prices index (CPI) down from 4% in January to 3.4% in February 2024, the consensus is not if the Bank of England will lower interest rates but when. This is clearly already impacting market sentiment.

The less positive news, however, is the level of economic inactivity, in particular the number of 16–24-year-olds who remain out of work — over half a million from November 2023 to January 2024 according to ONS figures. This is of huge concern to the government but also for the many employers and recruiters across the UK that are grappling with the scarcity of talent, especially across STEM skills. Clearly, if this situation isn’t addressed, the UK will continue to struggle to be globally competitive, especially in growth markets such as technology.

This segues on to the key takeaway and message that hiring teams need to heed, which is the importance of skills-first hiring — namely, taking on people based on their ability and potential to do the job rather than just looking at their qualifications or previous employment history. Given the shortages mentioned, such an approach makes perfect business sense in that it allows organizations to choose from a much wider talent pool, while providing opportunities for individuals who may otherwise have been ruled out of contention from the very beginning. An additional advantage being that it allows for far more equitable hiring practices.

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Many organizations think that the solution is simple: removing a degree or qualification requirement from a job description, which can significantly increase application numbers, particularly for those unable to afford the high cost of university education. But the issue is much greater than this. Worryingly, a recent survey by social enterprise charity Teach First found that the majority (51%) of parents did not think that their children would go on to pursue a career in a STEM field. The percentage of children who thought the same was slightly lower but still significant (42%). While a shortage of specialist teachers is not helping, nonetheless this issue has to be tackled urgently.

Some jobs and professions will require certain educational qualifications or certifications, but technical knowledge, such as learning to code or program, can be taught. However, soft skills — like communication and collaboration, building relationships or people management — are more difficult to train. The old adage “hire for attitude, train for skills” comes to mind.

As well as increasing the number of quality applicants through “buying” in talent externally, recruitment needs to be all-encompassing, including looking at the skills taxonomy for internal talent and therefore enhancing internal mobility. On a more in-depth level, it is critical that internal TA teams adopt a total talent view to their hiring, seeking to truly understand what they have and need. Once they have that holistic perspective, they can identify those individuals who have hidden skills and those who would benefit most from upskilling or can be readily redeployed into skill short roles. Development will also further boost loyalty, engagement and retention.

Skill shortages have been a constant thorn in the side of the UK economy. Sourcing and identifying suitable candidates by focusing on skills is just the beginning, but it will lead to a far more diverse and productive workforce with which to confront the challenges that tomorrow brings.

Janine Chidlow

Janine Chidlow
Janine Chidlow is managing director of WilsonHCG.

Janine Chidlow

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