Building a mobile and adaptable workforce: the role of skills-based recruitment

The current buzz around skills-based recruitment is not new. Qualifications have long been used as a filter for recruitment, but now the weighting assigned to qualifications has shifted as sectors are reporting labour and skills shortages. 

The SkillsIQ Right Skills Right Time Report published in 2017 highlighted how organisations were using qualifications to define the minimum conditions that job applicants had to meet before progressing to assessment against technical and cognitive criteria, including aptitude tests. In many cases, the result for workers and employers was frustration and disappointment, which translated into high staff turnover and recruitment costs. The extent and cost of skills mismatch in Australia, using qualifications as a primary recruitment criterion, was equivalent to $4.1 billion each year. 

Fast forward to the post-COVID environment, where shifts in the determinants of both labour market supply and demand are being experienced.

Australia is one of the few countries whose vocational education system has a skills-driven approach and a national system. What we haven’t done well is value it. We’ve had so much reform in vocational education that users of the system have no transparency on what skills the system is delivering and declining confidence in its quality.

In the same way, the current buzz around ‘micro-credentials’ is meaningless if we don’t have a way of measuring and comparing what has been achieved in a short course. Technology is enabling many options for skills recognition and providing information that has not previously existed (for example, online learning and digital badging) so this is a work in progress. If employers only select for a certain skill set and then innovation means that a different skill is needed, has that employee got the foundational knowledge to pivot and adapt? Or indeed, if we are trying to build a whole-of-industry workforce, what if industry needs a set of particular skills, but an employer is only interested in training for one of them? At a whole-of-industry level shouldn’t the goal be a workforce that is mobile and can has the full set of skills? 

The tendency to class certain roles as low-skilled because they do not have a university degree precursor has unsurprisingly meant that people are not attracted to low wages and poor conditions in roles that society does not value. We also need to recognise that the pandemic has seen a fundamental shift in how many people see work. For many, work-life balance is now a critical part of an employee’s decision on where they work and is no longer a ‘nice to have’. Providing flexible work for those who can, or allowing for less work or shifts where working from home is not possible, are realities that employers are facing. If businesses can’t deliver this, they won’t attract the workforce they need. Likewise, simply saying you support diversity, flexibility and have inclusive cultures and then not delivering on these pledges will affect employee retention. 

The ageing workforce, skills shortages and mismatches are not new phenomena. What we have not done is plan for them. Workforce challenges may currently be a hot topic for employers, but look historically at how much effort has been invested in workforce planning and development in a practical sense. To be frank, it’s not much. We need to think about widespread behavioural, and in some sectors ideological shifts. We are competing with workforce shortages internationally, so assuming we will be preferred over other jurisdictions seeking the same skills is naïve. As a first step, understanding what your workforce needs are and how you are going to attract the right skills at the right time and then continue to develop and support them, needs to be looked at from a whole-of-industry perspective. 

There is a trend in a crisis to reframe recruitment, progression and retention strategies. Where we are seeing skills-based approaches to recruitment and workforce development in tight labour markets, there are reports that it can promote more equitable and inclusive practices and alleviate staff shortages with increased worker participation. This results in social benefits and economic advantages. There are organisations in areas such as tech and IT that have reported that for some roles, they no longer advertise for qualifications at all. 

Skills-based approaches play a role well beyond skills and can signal where changes are required in how we view and value occupations now, and into the future. 

For businesses across the economy to be sustainable and profitable, education and training must be a fundamental part of developing the workforce. However, the focus must be on industry playing an active part in initiating and supporting this development. An expectation that the education and training system alone will solve all the problems will only lead us to another 25 years of reforms and a continuation of the current challenges.