Building Tomorrow's Workforce: Leveraging Talent Analytics for Skills-first Hiring

Skills have always been the currency of work, but the way companies source skilled workers is on the brink of a major shift. According to current recruitment platforms, 40% of employers now use skills to fill open roles, marking a 20% increase year-over-year. These skills-focused employers are reported to be 60% more likely to find a successful hire compared to those who do not incorporate skills into their hiring process.

This is the first year that skill-based approaches have felt genuinely impactful; in previous years, skill-based hiring often seemed like lip service. For example, omitting degree requirements in job ads doesn’t automatically make an organization skill-based. Skills-first hiring is more than just a trend; it represents a new philosophy in talent acquisition.

The Horsefly Analytics platform equips organizations with detailed, real-time labor market insights, enabling them to identify and leverage the most in-demand skills, set competitive salaries, and optimize recruitment strategies. With this robust data, businesses can build effective solutions to stay ahead in today's dynamic job market. In this article, we will delve into the skills-first landscape and explore how organizations can adapt to this approach to safeguard and enhance their workforce.

Employer adoption of skills-based hiring

Instead of adhering to traditional hiring strategies that overlook talents'’ capabilities and potential knowledge gaps, a skills-first approach facilitates smarter talent management decisions; it's simply a more efficient means of identifying the unique talents essential for success.

Confronted with persistent economic uncertainty and widening skill gaps, no organization can afford to hire employees lacking the competencies necessary for critical business priorities or to compete by overspending on talent with high-priority skills. While traditional talent acquisition methods often favored talent with advanced degrees or similar job titles, a new sourcing approach centered on employees’ competencies has now established itself as the only way forward.

Indeed, 90% of businesses agree and are eager to adopt skills-based strategies, but navigating the initial steps can be challenging without the right methodology and technology to identify those skills. The Horsefly Analytics platform provides precisely the solution needed to overcome these challenges.

Skills-based approaches prioritize the capabilities talent brings to the table over their qualifications, backgrounds, references, or resume. Although it may be a relatively new concept, skills-first hiring has been gaining momentum for the last 5 years, thanks to the increasing proof that it brings these associated advantages:

The Top Benefits:

• Global access to talent

• Enhanced performance and long-term productivity

• Greater agility and efficiency

• Improved diversity and inclusion

• Reduced turnover

• Increased employee motivation

And the Data Tells Us:

• Globally: 73% of companies utilized skills-based hiring in 2023, but this rate has risen to 81% already in 2024 with 95% of companies agreeing it's the dominant recruitment trend.

• Gaining momentum: 17% more employers implemented skills-based hiring in 2023 compared to 2022.

• Talent Budget Spend: The number of companies planning to increase their spend on skills-based hiring rose from 39% in 2022 to 60% in 2023, which is very encouraging news.

• Success Stories: Skills-based hires are happier in their roles (38%) compared to those hired without (28%).

• Diversity in the Skills-based mix: 85% of employers report that diversity is an objective for them in 2023, and will be a part of their skill-based strategy, up from 77% in 2022.

Additionally, employees are more confident they will find the right role with skills-based approaches. In fact, 86% of target talent agree that they are more likely to secure their 'dream job' with skills-based hiring, and over 50% of potential talent would like to see this approach increase.

Skills-first hiring cannot be an add-on or a bonus feature of your recruitment process; it must be at the very heart of how you hire.

Here’s our step-by-step process for skills-first hiring:

• STEP 1. Analyze each job and identify the top skills. But don’t limit your analysis to predetermined job titles; instead, examine the skills in a platform like Horsefly Analytics and identify other directly related insights.

• STEP 2. Write a skills-first job description, looking beyond job titles.

• STEP 3. Build a skills-first recruitment funnel of target talent.

• STEP 4. Evaluate skills objectively and identify existing and emerging skill gaps.

• STEP 5. Analyze results.

• STEP 6. Use interview stages to gain insights into target talents' skills.

• STEP 7. Prioritize skill development and external factors.

• STEP 8. Align the workforce with skills-first hiring processes.

Currently, skills data presents both a massive opportunity and a significant challenge for many organizations. This challenge arises because many organizations track skills in disparate systems with mismatched rating scales. We address these issues by providing accurate pathways to implement skills-first talent acquisition, but also because we are the only platform that provides granular skill-based searches whether you’re looking in UK, US or Ghana.

The Horsefly Analytics platform provides clarity on the acquired audience by identifying top skills through a ‘Top 20 skills’ list, enabling the creation of detailed profiles. The skills function of the platform allows workforce teams to quickly and easily gain a deeper understanding of the talent landscape but also of the target talent they are seeking. This feature streamlines processes, ultimately enhancing recruitment and workforce planning efforts.

We work with organizations to centralize skills data from multiple sources and “translate” from various systems into one common language, so all data can be seamlessly combined, effortlessly read, and collectively assessed.

Addressing internal skills and identifying gaps is crucial for optimizing workforce potential and ensuring organizational success. By thoroughly analyzing current skill sets and spotting areas of deficiency, companies can implement targeted training programs and development initiatives.

Recognizing and promoting internal talent fosters employee engagement and retention, as it demonstrates a commitment to career growth. This proactive approach not only enhances productivity but also builds a resilient and adaptable workforce.

Here are some ways to track internal skills:

• Skills Assessment: Assess workforce skill levels through tests, simulations, and assessments to build quantitative data on current proficiencies.

• Skills Gap Analysis: Perform skill gap analysis to identify absent skills to inform any recruitment process.

• Predictive Modeling: the Horsefly API taps into multiple data sources enabling businesses to utilize all their data to drive AI-assisted, full-scale taxonomies. The Horsefly algorithm can predict forward by at least 9 months, synergising full collections of data enabling predictive modeling.

The future is skills-based, it’s that simple and 75% of UK companies are prioritizing skills-based hiring and 82% of employers see a reduction in time to hire. A skills-first approach to hiring is transforming the landscape of talent acquisition and, for the first time, feels genuinely impactful. At Horsefly Analytics, we provide organizations with comprehensive, granular insights that go beyond traditional job titles, focusing instead on the specific skills needed to truly understand and engage your target talent.

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Sources: Horsefly Analytics, McKinsey & Company, Forbes, Testgorilla, Weforum.