Many employers’ skills-first efforts can stall after an initial hiring push. Turning inward and focusing on internal mobility strategies can often help reinvigorate a skills-first culture.
Over the past two years, the idea of skills-first talent management has taken the country by storm. Nearly every week, there’s a new headline about a Fortune 500 company rethinking degree requirements and embracing skills-based approaches to hiring. At least 20 states have eliminated bachelor’s degree requirements for significant numbers of government jobs.
But the nascent movement isn’t without its speed bumps. One recent report from Harvard Business School and Burning Glass Institute found that while a wide range of companies have committed to hiring based on skills rather than degrees, only a handful have made measurable improvements thus far. Some skeptics are taking this as evidence that the skills-first talent movement is stalling out, or that it was always more bark than bite.
That concern is an understandable one — but it misses a bigger opportunity.
On the surface, it makes sense to measure the success of skills-based practices entirely on whether or not the people who get hired have degrees, as the Burning Glass study did. But while hiring is of course an important piece of the puzzle, it’s not the only one. And evaluating skills-based practices based solely on hiring leaves out another piece, one that’s at least as important (and maybe more so) for businesses making this transition: internal mobility.
For many businesses, evaluating (and promoting) their existing workforce based on their skills may be the most effective way to quickly adopt and see value from skills-based practices. In many ways, internal candidates offer the best entry point for skills-based practices. After all, their colleagues can see firsthand the expertise they bring to the project, as well as appreciate their “soft” skills (like creativity or a positive work ethic) that can be hard to measure or share during a hiring process. And the benefits from a retention standpoint are obvious, too: as HR guru Josh Bersin has explored, investing in your existing workforce can make a measurable impact on reducing costly churn.
What does a skills-based approach to internal mobility look like in practice?
Just as with skills-based hiring, simply removing degree requirements for more advanced roles won’t be sufficient. Companies need to start with a business need. After all, skills-based practices are an approach to solving a problem, not an end in themselves. And the approach for bringing skills-based practices to life within an organization will differ depending on the purpose for which they’re being used.
Consider a company trying to find candidates for hard-to-fill roles. Adopting skills-based practices may allow them to map their hardest-to-find competencies with internal candidates who have adjacent skills — and upskilling those candidates can be both more cost effective and lead to better outcomes than trying to find an external candidate with those skills. Blackstone’s Career Pathways Program is putting this idea into practice, helping the private equity giant’s portfolio companies retain entry-level employees that bring new or underrepresented perspectives and experiences that might not otherwise be reflected in management roles. Great Wolf Lodge, for example, has adopted practices to help entry-level workers grow into middle-skills and management roles. The success of the internal mobility programs at Great Wolf Lodge and elsewhere have led Blackstone to widen the program to include not just supporting entry-level workers, but also supporting those from mid-level roles into more senior roles.
Similarly, companies facing high turnover and costs associated with employee churn can look to the skills of their existing workforce. By creating pathways to new roles internally that are skills-based (rather than requiring additional credentials), they can both reduce churn and bolster economic mobility. One such example is Amazon’s Career Choice program, which will invest $1.2 billion by 2030 to upskill workers into higher-paying roles. These include roles within Amazon — including Amazon Pharmacy and Amazon Web Services (AWS). One employee, for example, began as an installer, setting up server racks for AWS. After completing a program through Career Choice, he was promoted into a role as a Data Center Engineering Operations technician.
These examples demonstrate what’s possible when companies begin their skills-first journey by looking at the talented workers who are already in their ranks. It’s an approach that works not just for employers, but also for individuals. It helps incumbent workers move from having a job to a career, improving both their earning potential as well as their opportunity for personal growth. And it enables businesses to test out the power of skills-first practices — so they can put those practices to work across the entire employee experience. Companies are right to acknowledge that the shift to skills-first talent practices won’t be an easy one. But those who begin the skills-first journey with a focus on internal mobility are already seeing their efforts pay off.