Skills at the Heart of Talent Strategy
Samir Bedi and Goh Jia Yong of Ernst & Young urge organisations to employ skills-based manpower planning, as well as recruit for, reward, and invest in skills.
Ensuring that Singaporeans have deep skills for the future and are inspired to learn throughout their lives has emerged as a key nation-building effort in recent times, following the recommendations by the Committee for the Future Economy in Singapore.
To that end, various Industry Transformation Maps (ITM), which aims to foster synergies across industries by leveraging skills adjacencies to support the provision of skilled manpower, are now set into motion.
The Skills Framework, which is an integral part of each ITM, was established to provide a common skills repository for individuals, employers and training providers, as well as support skills acquisition through training programmes to enhance individual employability and career development.
While the Skills Framework is a rich resource for employers to gain insights into sector trends and skills demand, companies must contextualise and adapt it to their own business needs for the Skills Framework to be of real utility.
Align talent and business strategy
As technological disruption continues to change business models, organisations are realising that the reasons that made them successful today may hold no guarantees for their future. Operating in such an environment, businesses will require a skills strategy that concurrently addresses both the need to run business-as-usual in a cost-efficient manner, and redefine their business model.
For example, in this digital age, organisations will need to identify the skills required to achieve their strategic digital goals in their workforce plan. Without this overarching architecture in mind and faced with the pressure to "go digital", businesses will find it challenging to decide between "buying" versus "building" their talent. Businesses must also be agile and ensure that their workforce plan is continually evolving in alignment with their business plans.
Employ skills-based manpower planning
The success of any organisation lies in having the right people with the right skills at the right time and at the right price.
Manpower planning entails getting the optimal number of workforce and type of profiles required. A skills-based manpower planning is carried out by taking stock of existing competencies and abilities, and projecting the manpower needs. A gap analysis considers the required workforce strength, how job requirements will evolve over time, steps to be taken to train employees, and the types of skills and competencies needed.
Laborious as it may seem, this preparatory step is crucial in developing and implementing programmes that will assist the organisation in meeting its human resources needs optimally.
Recruit for skills
Many employers may fail to recognise that hiring today requires a breakaway from traditional practices. Recruiters should now consider using skills-based interviews – a concept that links the three parameters of knowledge, attitude and competencies. This is different from the traditional "getting to know you" type of interview.
In a skills-based interview, the core assessment is based on a candidate's skills, experiences and fit with the organisation's culture and values.
The interview process replicates the work environment as much as possible and questions would focus on assessing the candidate's strengths and weaknesses in the key competencies that they are expected to contribute.
One such technique is the behavioral event interview approach, where the candidate is asked to describe his or her behavior in past important situations, for the interviewer to map out a competency rubric based on actual events.
Reward and incentivise skills
The conventional "one-size-fits-all" approach in determining fixed pay remuneration and pay progression has been criticised for not compensating based on competency. A skills-based pay addresses that gap, as the employee is rewarded with more pay for mastery of skills, knowledge and competency.
Optimising the reward payout per employee requires organisations to accurately measure employees' perception of rewards, and balance it with a cost-benefit analysis tied to the organisation's strategy. For example, at EY, we help our clients to make holistic and exacting decisions on their reward programmes with analytics tools such as the EY Total Rewards Investment Optimizer.
Implementing a skills-based reward scheme may result in higher remuneration budgets as employees now receive more pay in the form of incentives and bonuses for acquiring new skills and competencies.
However, these costs can be offset by leaner workforce models, increased productivity and new areas of work. From that perspective, the additional investment required for revamping schemes becomes self-funded.
Invest in skills
Organisations often question the return on investment in skills training, particularly when they face the risk of employees leaving.
A mindset shift is needed where employers view training as a long-term investment, rather than a short-term cost.
With training, staff are better able to add value and take up expanded job scopes to drive growth for the organisation. At the same time, their personal growth helps to create an engaged workforce.
The key to reaping returns is to consistently drive the skills agenda. Many organisations struggle as budget and time constraints fluctuate with the health of the business. However, as business models transform to become more reliant on technology, organisations need to build a culture of lifelong learning and agility across the organisation.
There is no magic formula for the perfect training program. Very often, learning and development programmes are too quickly misunderstood as being synonymous with classroom training. Classroom training merely provides the fundamentals that form 10% of the process in skill acquisition – 70% of the learning takes place on the job, and the remaining 20% is led through a strong mentoring culture.
For organisations to embark on and sustain a skills-oriented agenda, they first need to develop greater clarity on their skill requirements. The same can be said of employees too, who will need to nurture a vested interest in their own careers – not only in the organisation that they are currently employed with – but also from a lifelong employability perspective.
The views in this article are those of the authors and do not necessarily reflect the views of the global EY organisation or its member firms.