When we’re talking about the future of talent acquisition, Generative AI has been taking all of the limelight this year. However, arguably, although it grabs fewer headlines, the steady evolution of skills-based hiring is potentially even more disruptive to traditional recruiting norms.
There is an enormous amount of data, science and research going into understanding the relationship between skills and job performance, and the results are smashing some of our longest-held assumptions about hiring.
My guest this week is Andy Nelesen, Global Head of Talent Acquisition Solutions at SHL. SHL has done an enormous amount of work to establish the link between skills and performance, and their research has revealed 12 skills that universally predict success. There is also a significant discrepancy between the skills employers ask for in job ads and the skills the science shows they actually need, so this is a must-list interview for everyone who wants to hire more effectively.
In the interview, we discuss:
• Why understanding skills is so important
• The adoption rate of skills-based hiring
• What does potential mean?
• Overlaying soft skills against performance
• The 12 skills that universally predict success
• Why a growth mindset is more important than resilience and adaptability
• Moving away from academic credentials and previous experience
• Are skills the key to diverse hiring?
• Talent mobility
• What does the future of work look like?
Listen to this podcast on Apple Podcasts.
Transcription:
Matt Alder: Support for this podcast is provided by SHL. From talent Acquisition to talent management, SHL solutions provide your organization with the power and scale to build your business with the skilled, motivated, and energized workforce you need. SHL takes the guesswork out of growing a talented team, by helping you match the right people to the right moments with simplicity and speed. They equip recruiters and leaders with people insights at an organization, team, and individual level accelerating growth, decision making, talent mobility, and inspiring an inclusive culture. To build a future where businesses thrive because their people thrive, visit shl.com to learn more.
[Recruiting Future Podcast theme]
There’s been more of scientific discovery, more of technical advancement, and material progress in your lifetime and mine than in all the ages of history.
Matt Alder: Hi, there. This is Matt Alder. Welcome to Episode 555 of the Recruiting Future podcast. When we’re talking about the future of talent acquisition, Generative AI has been taking all of the limelight this year. However, arguably, although it grabs fewer headlines, the steady evolution of skills-based hiring is potentially even more disruptive to traditional recruiting norms.
There is an enormous amount of data, science and research going into understanding the relationship between skills and job performance, and the results are smashing some of our longest-held assumptions about hiring.
My guest this week is Andy Nelesen, Global Head of Talent Acquisition Solutions at SHL. SHL has done an enormous amount of work to establish the link between skills and performance, and their research has revealed 12 skills that universally predict success. There is also a significant discrepancy between the skills employers ask for in job ads and the skills the science shows they actually need, so this is a must-list interview for everyone who wants to hire more effectively.
Hi, Andy, and welcome to the podcast.
Andy Nelesen: Really excited to be here.
Matt Alder: An absolute pleasure to have you on the show. Please could you introduce yourself and tell us what you do?
Andy Nelesen: Yeah, happy to. My name is Andy Nelesen. I work for an organization called SHL. I am the Global Leader of our Talent Acquisition Solutions. So, we are an organization that produces data on people, objective data, using things like science and psychometrics to understand performance. We’ve been collecting a lot of data on the topic of skills that I’m really excited to talk more about.
Matt Alder: Skills is a topic that is coming up time and time and time and time again on the podcast. Really over the last couple of months, I’ve noticed– It’s always been there and it’s certainly increased over the last year or so. But over the last couple of months, everyone seems to be talking about it more and more. Why is that? Why are skills important? Why are thinking about skills important? Why is that important within talent acquisition right now?
Andy Nelesen: Yeah. We’ve been on these skills journey ourselves for a handful of years. I think the answer to that sits in three categories. The first, at least what we hear from our customers is just have more and more non-HR people that are running towards us talking about the change that’s happening in their business landscape and they’re using the language of skills to articulate the impact that that is having on their people. So, just navigating the future of work, which I’m sure everyone that’s listening can relate to. So, that’s one reason.
The other, I think there’s just especially on the heels of COVID, there has been a lot of disruption to labor markets. And a desire to expand talent pools and to reimagine the talent that we already have in seat, are we taking full advantage of the skills that our teams have today. So, I think that’s another reason.
Then lastly, this is one that we at SHL hold quite near and dear, but this idea that maybe skills really is that great equalizer that advances in a meaningful way our DEI[?] initiatives, can we leverage skills to really move past things like academic credentials, or background, or experience to make decisions around hiring or advancement that’s just a little bit more fair, and as we’ll get into some of our data and research, we’re seeing some evidence that skills really can be that great equalizer.
Matt Alder: Now, I want to dig into all of those things in a bit more depth as we go through the conversation. But before we do though, I suppose by way of context. You mentioned there some of the things you were hearing from your customers. What’s the market at the moment? Are employers adopting this quickly? What are you seeing? There’s obviously a lot of talk about it, but are people actually doing the doing when it comes to skills?
Andy Nelesen: I think there’s a lot of interest in becoming a “Skills-based organization” or being on a “Skills journey,” whatever that might mean for a given organization. So, there’s a lot of desire to make real progress here. I have not encountered a ton of organizations that I think would say themselves, they’ve figured it out. So, it feels a lot of organizations are at the start of their journey and it can feel overwhelming. Getting started isn’t necessarily intuitive or easy. So, I think most of the organizations that we’re working with are at the start of that skills journey. And even wrestling with semi basic concepts like definitions, what even is a skill? How should we understand what a skill is and apply it in terms of our selection strategies, etc.
So, I think we’re at the early stages of a broad journey that the talent acquisition landscape is going to be on for quite some time, because I do think as we’ll get into some of the research, those three big buckets that we talked about skills really can move us forward in a meaningful way, but I think getting started is hard.
Matt Alder: It’s interesting, because it’s very difficult to find anyone who disagrees that we’re moving in this skills-based direction, but obviously, we’re still at an early stage of it. So, let’s dive into some of your research, because there’s some absolutely fascinating stuff here that I know people will get huge value from hearing about. So, tell us a little bit about how you categorize skills, how does it work, particularly when the skills that people need are so fast moving and need to change? Where do you start with all of this? What kind of frameworks are you using?
Andy Nelesen: Yeah. For us, when we got started on this journey eight or so years ago, that was really the thing that we needed to level set on is a definition for skills that we could use that could have meaningful impact over time, and just an understanding that not all skills are the same. So, we built a bit of a taxonomy. We won’t get into all the details, but we started to use this metaphor of a tree that might be helpful for some in the audience, especially as they’re having conversations with their non-HR partners internally.
At the top of the tree are the leaves, and these are what we would call perishable skills. So, these are the skills that are rapidly changing. The shelf life might be just 6 months, 12 months, or 18 months. You could think of these as these technology or systems related skills, even vendor specific skills. We call these perishable skills. It’s hard to anchor a meaningful talent program or a selection program on skills that have this really short shelf life where the leaves of the tree fall off every 12 months. So, we try to help our customers anchor on what we called semidurable or durable skills. These are getting into the trunk of the tree or even the roots of the tree. Maybe these are field specific technologies, or processes, or even more powerful than that in our view, more of like a base layer of mindsets and behaviors and moving into things that are truly long lasting.
So, examples might be getting into things like critical thinking, or collaboration, or adaptability, communication. We might not have called these skills 8 years, 10 years ago where at least in my mind, I would have thought of functional technical skills as a definition.
But more and more we’re finding that our customers really do want to embrace a broader definition for what a skill is, getting more into these softer skills, the roots of the tree, the trunk of the tree, so that we can build talent programs that are a bit more long lasting. So, that’s been the foundation of the taxonomy or the framework that we’ve created to understand skills and tease out these perishables versus more durable skills.
Matt Alder: Makes perfect sense. Particularly in the world we’re living now, where as you said, work is changing so quickly, and organizations are hiring people, and they don’t know what perishable skills that they’re going to need to learn or have. Lots of people talk about hiring for potential. Interestingly, just before this I was doing a podcast interview about AI and work, and there was a Chief People Officer saying that, when they’re looking at their workforce over the next five years, they’re hiring for flexibility, they’re hiring for potential, all these things. So, people talk about this all the time as being really, really important. But how do we spot it? How do we measure it? What does it actually mean, potential?
Andy Nelesen: Yeah, that’s a really good transition into a recent research study that we’re really excited about. So, that’s really the question that we wanted to answer. So many of our customers, exactly to your point, they’re telling us that their jobs are changing so quickly. Creating a hiring program on a narrow set of job specific skills just doesn’t feel as usable knowing that those skills are likely to evolve so quickly as embracing a broader set of more transferable longer lasting skills. So, they keep using the language we want to hire for potential.
Here, we are an organization that’s science and data driven, we wanted to really understand what that meant. So, we embarked on a research project where on the one hand, because we deliver literally millions of assessments a year. We’ve got a framework for understanding performance. In that framework, there are 96 business skills that are a comprehensive overview of the skills that exist in the workplace.So, on the one hand, we’ve got loads and loads of data. Candidates that have applied for roles across levels, across industries in different regions, and we understand their skill proficiency against these 96 soft skills, these business skills.
On the other hand, we’ve got their job performance data. So, we know the people that are exceeding expectations. We know the people that have a very high rehire rate or they’re achieving their KPIs, etc. So, we can marry up this very large data set to explore, are there a common set of those 96 business skills that seem to be predictive of job performance regardless of context?
So, again, to be very specific, we had this data set that had about 20,000 data points in it. These were individuals that were applying to roles that were both entry level early career professional, even early career manager roles, and they were from all different industries. It turned out that when we looked at these 96 business skills, there were 12 that universally are predictive of success. So, again, going back to that question, how do we understand potential broadly? Well, in a data driven way, it is these 12 skills that have emerged that might give us some interesting insights.
Matt Alder: You don’t have to name all 12, but just give us a sample of some of the ones that stand out.
Andy Nelesen: They’re actually listed here in order of the skills that are most predictive. The top three actually stood out. So, we will get to all 12, but there was a bit of a gap between #3 and #4. Meaning, the top three were the most universally predictive, and then there was the following down to 12 where there was another bit of a gap. And so, that’s why we landed at 12. But the first is takes action, and the second is strives to achieve, and the third is establishes credibility.
So, actually, not all that surprising to us. It’s long been known that achievement as a general construct of performance at work is a universal measure of predictiveness and success. So, those top two takes action and strives to achieve just reinforced, I think, what we’ve known in the IO Community for a while that achievement is a really important skill to have that could be a universal predictor across roles.
Matt Alder: What about things like time management, and learning, and data analysis, and all those things? Do they fit into those 12 critical skills?
Andy Nelesen: Yeah, they actually do. So, I’ll just quickly read them. So, #4, then coordinates others work. #5, five attends to multiple tasks. #6, offers practical solutions. #7, applies functional expertise. #8, learns quickly to your point about learning. #9, uses time efficiently. #10, analyzes information. #11, makes difficult decisions. And #12, takes responsibility. So, again, there’s a lot in here that we expect to define these broad measures of achievement and conscientiousness, but maybe to pivot to something that we didn’t expect that might be interesting to the audience.
This conversation about hiring for potential is often grounded and rooted in this notion that we just need people that are more adaptable, more resilient, or even you might hear the word, grit, a lot. So, it’s actually a lot of that resilience piece was not in these 12. So, this idea that you’re coping or you’re adaptable in very specific terms did not show up in the 12 and we were really struck by that. But if you do look at some of those that did that are included in the 12, things like learns quickly to your point or analyzes information, takes responsibility, offers practical solutions, if you marry all those together, I think the thing that jumped out at this idea of a growth mindset. It’s like understanding how and why jobs and roles and functions are evolving, being able to on your own create change in how you deliver value to your organization. We would call that growth mindset.
So, I think that’s one of the big takeaways. The aha moments that we had is that maybe it’s not so much resilience or the coping that we need, but maybe it’s more that learning piece, that growth mindset piece. That is the thing that we hear so many of our business stakeholders asking for maybe there’s an important reframe there.
Matt Alder: So, it’s being curious and knowing how to take action rather than being resilient and adaptable. I think that’s really interesting. It is much more action orientated, isn’t it?
Andy Nelesen: Absolutely right. Being curious, that’s a great way. Things like analyzes information, which is #10 on the list, offers practical solutions, that’s #6. #8 is learns quickly. I think that gets at that curious piece that you just mentioned. Absolutely. That’s an important reframe in our view.
Matt Alder: Maybe also people use resilience as a big umbrella term to mean lots of different things. So, it’s really interesting to see all this broken down into skills that effectively can be measured.
Andy Nelesen: Yeah. Ironically, we also as part of this research effort. We did like a macro view of all job postings and O*NET data to look at the skills that we’re valuing broadly in job descriptions. And of course, things like resilience and adaptability are very, very high. I think adaptability shows up in 94% of job postings across levels. So, it’s just like a universal skill that we’re valuing in job postings. And learning statistically shows up in 0% of them. So, this thing that is so powerful in the research that we conducted, learning as an important construct of predicting overall job performance across roles is not something that we’re selecting for necessarily if you just look at job posting data. So, we thought that was interesting.
Matt Alder: Yeah, I think that’s really interesting. It perhaps illustrates how far there is to go in terms of the mindset that people use to think about skills. I’ll come back to that in a second, actually. But before I do, I can’t move on without going back to what you said earlier about diversity. How does focusing on skills help improve diversity in hiring?
Andy Nelesen: Yeah, this is, I think, the part of the research effort that we might be most excited about. So, when we looked at these 12 skills, they don’t produce adverse impact. Meaning, they don’t negatively disadvantage disparate groups at all. In fact, some of these skills, different groups really, really thrive. So, as an example, younger talent pools, they outperform in skills, like, takes responsibility, that’s one of the 12. Applies functional expertise, attends to multiple tasks like when I look at my kids, that’s not a surprise, and takes action. So, those 4 of the 12 younger talent pools really excel at.
Women thrive, uses time efficiently, learns quickly, and attends to multiple tasks. Those were 3 of the 12. Then perhaps most interestingly, minorities in this case the definition was ethnic minorities, there were 5 skills of the 12 outperformed in, and they were takes responsibility, applies functional expertise, uses time efficiently, attends to multiple tasks, and strives to achieve.
So, skills, we hear this a lot but just I don’t want to hire for academic credentials or previous experience. We do see skills offering a real opportunity to advance those DEI initiatives and embed them into a broader talent strategy rather than having DEI exist outside of these talent initiatives.
Matt Alder: There’s obviously a gap between people’s willingness and need and want to embrace skills in their talent strategy, and their ability to do it as reflected in what you were saying there about job postings. What would your advice be to TA leaders listening? How can they really move forward with their skills-based evolution?
Andy Nelesen: That’s really one of the intended goals of this research effort was to figure out a way to help organizations just get started. If this skills journey feels overwhelming, well, maybe we can just start by reminding ourselves that skills related to things like achievement and conscientiousness are just always going to be universally valuable, skills related to learning to growth, that growth mindset that we talked about, that’s an easy way to get started. Maybe we don’t have to boil the ocean by over engineering a skill strategy. Maybe we can just remind ourselves of some of these broad principles as a starting point. Using skills, embedding them into our processes, so that we can create more fairness in these talent processes and just getting started, simplifying the journey, and just getting started, I think that’s one of the things that we’re really most excited about.
Matt Alder: So, just looking into the future for a bit. What does work look like when we’ve moved to this skills-based way of working? When it becomes the norm, what kind of visions do you have for the future?
Andy Nelesen: I think the word that comes to mind most powerfully to answer that question is mobility. I think we’ve struggled across talent management landscape for years to really create structures that allow individuals to move across the organization, and to feel like they’re learning and adapting and applying and growing. It feels like if we get this skills thing right, that’s the thing that we unlock. So, there’s value, both to a very important constituent in this process are people. They feel that growth and then I think equally valuable is maximizing the contribution that they make and applying it against our changing business strategy.
So, aligning these skills against the jobs of the future, the work of the future, I just think that mobility piece is really what we’re trying to unlock. And so, that’s what I see. I see skills being the thing that helps us create that powerful movement that empowers and engages people while also aligning and directing against business strategy in a way that I think can be really powerful.
Matt Alder: Lastly, where can people find out more about the research?
Andy Nelesen: Yes. So, there’s some white papers that we’re posting on our website @shl.com, and there’s also a handful of webinars that I will be doing, and you can certainly find the invite to that on the website. I’ll be doing a much deeper dive on what we’ve learned in this research, and what we think the implications are, and how we think leveraging some of this intelligence can get you started on your skills journey, and in just a more simplified, easy way. So, I would welcome any of your listeners to attend any of those sessions and we’re looking forward to digging in.
Matt Alder: Thank you very much for talking to me.
Andy Nelesen: My pleasure. Thank you, Matt.
Matt Alder: My thanks to Andy. If you’re a fan of the Recruiting Future podcast, then you will absolutely love our newsletter, Recruiting Future Feast. Not only does it give you the inside track on what’s coming up on the show, you can also find everything from book recommendations to insightful episodes from the archives, and first access to new content that helps you to understand where our industry is heading. Sign up now and also get instant access to the recording of my recent webinar on the future of talent acquisition. Just go to recruitingfuturefeast.com/webinar. That’s recruitingfuturefeast dotcom slash webinar.
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