Quincy Valencia's Analyst Perspectives

Organizations are constantly striving for agility and efficiency to stay competitive. From a human-capital standpoint, a logical way to achieve this is by moving away from a job title and education-based workforce and transitioning to one that is skills-based. This approach emphasizes the skills and capabilities of individuals rather than their prior job titles or education, enabling organizations to tap into a broader talent pool and adapt to changing business needs. However, creating a skills-based workforce requires overcoming challenges such as defining and measuring skills, changing workforce architecture and gaining the buy-in of human resources and business leaders to an entirely new way of viewing talent. Organizational structures today are largely built around functions with jobs that have titles and tasks to be completed. Individuals are evaluated for these jobs based on education, prior job titles and, sometimes, references, all used as a means of verifying that what is listed on a resume is true. In a skills-based workforce, the value of a resume is voided, as prior job titles and degrees would no longer be the pillars of measurement for a candidate’s qualifications, which I have previously addressed in this analysis as well as offering guidance in this publication on five strategies that should be embraced. Skills, though, cannot be verified by phoning a university or verifying employment tenure and titles.

In recent years, organizations have struggled to find and retain the right talent to fill critical roles. This can be attributed to a combination of factors, including an aging workforce, a lack of critical skills needed for current and future organizational needs, and increased competition for talent from other organizations seeking similar skills. Our research shows that, within the next five years, one-half of all employees will require significant reskilling and upskilling in order to keep pace with the changing job market. As a result, organizations are facing a talent shortage and are struggling to fill their open roles with qualified candidates. This poses a clear threat to the ability to execute critical business initiatives. In response, we assert that by 2025, one-half of organizations will implement a more comprehensive approach to determining organizational readiness, including sentiment analysis, skills gaps identification and adjacencies assessments to optimize employee potential.

A decade ago, organizations were sold on best-of-breed technology stacks. In the world of human capital management, that meant a separate system for each of the myriad processes that make up a worker's life span with a company. The approach seemed to make sense because a single system cannot be the best at everything, can it? Is it realistic for a single provider to create the most advanced applicant tracking, onboarding, learning, payroll, compensation, performance management, succession planning, benefits management and off-boarding system – all in one platform. And so, individual process owners purchased the software that would perform its single task better than every other system, and the Monster Stack was born.

Recruiting is hard. The best candidate often isn’t even actively looking for a new role, and yet recruiters are expected to find the perfect match of skills, experience and fit at exactly the right time and somehow convince that individual to leave a familiar role and work community to join a new organization. Those who are already in the market have gone to considerable lengths to ensure their credentials stand out from the competition, from creating new resumes to forging new professional contacts to honing their interview skills. Organizations would do well to remove as many barriers as possible to ensure the top end of the candidate funnel is open and welcoming to as many qualified applicants as possible, and yet many times the process itself is so daunting that candidates will self-select out in favor of easier paths. Creating a positive and engaging candidate experience is critical to hiring success. The following are five strategies employers can use to ensure they don’t lose the best talent to a competitor’s simpler, more engaging recruiting process.

In January of 2020, I was head of product innovation for a newly launched product in the human capital management technology space, targeting high-volume hiring. We had big ambitions for that year, tied to product development and sales, all documented during our annual goal-setting and performance review process. And then the pandemic hit, and everything changed overnight. Everything, that is, except for my annual goals, or those of my team, which had already been set in stone. When the annual review process came around, nothing we’d set forth earlier in the year was even applicable. How is a leader to evaluate and make compensation recommendations for a team member based on completely outdated criteria?

Ventana Research recently announced its 2023 Market Agenda for Human Capital Management, continuing the guidance we’ve offered for two decades to help organizations derive maximum potential from workforce- and people-related technology investments and initiatives. In crafting this Market Agenda, we focused on three critical themes top-of-mind for both HCM vendors and buyers: Organizational resiliency, employee engagement and utilizing digital technology to derive deeper insights into the state of the workforce so that leadership can take action to promote retention and growth.

As the world of work continues to evolve, so too must the way organizations evaluate talent. Traditional evaluation criteria like education and prior job titles still have a place in hiring, promotion and succession-planning processes. However, organizations that consider transferrable skills first have the opportunity to screen in talent that they may not have otherwise considered, creating a substantial advantage in the proverbial war for talent.

Some weeks back I published my thoughts about the traditional applicant tracking system and how that technology is no longer sufficient to support organizations’ complex recruiting needs. This is particularly true when trying to take a one-size-fits-all approach to hiring processes. Having identical hiring processes and requirements for professional hires as for low-complexity, low barrier-to-entry roles will inevitably result in lost candidates, frustrated recruiters and hiring managers, and low application-to-hire conversion rates. It doesn’t have to be that way. The right technology can support a hiring process that is purpose built for the segment it is intended to attract and hire.

It has been nearly two and a half years since the world was thrust into one of the most dramatic eras of workforce transformation in the modern era. Organizations have been forced to reevaluate everything about the workforce, from the physical spaces in which work is done, to compensation, to non-traditional benefits and work/life enhancement offerings. Even so, many continue to struggle to attract and retain the right talent to support operational needs. As leaders continue to redesign how they look at their talent pools, they have come to rely on their technology stacks more than ever to inform and enable new processes and experiences for candidates and employees, and recruiters and managers, throughout the entire talent life cycle. We at Ventana Research assert that by 2025, two-thirds of organizations will expect full talent life cycle support from their talent platform to bolster and unify the experience for candidates, recruiters, employees and managers.

The applicant tracking system, for all its shortcomings, revolutionized the way people found and applied for jobs when it first hit the market in the mid-1990s. Electronic applications quickly became the norm, resume or application review became more accessible for hiring teams and compliance was much more trackable and achievable, thanks to streamlined application processes. Today, tracking and compliance aren’t enough to power the complex world of recruitment. The Great Resignation has made it abundantly clear that candidates expect the same type of consumerized experience in the hiring process as they do when buying anything at all. To win or keep the best talent, organizations must make the hiring process personalized and enjoyable, and a traditional ATS simply cannot support that mandate.