Workforce

The Case for Skills-Based Hiring

Forget ‘education,’ ‘experience’ or ‘past employment.’ Filling the trades gap will mean identifying the specific skills you need for the projects you have—and hiring people with those skills.
By Fraser Patterson
January 25, 2024
Topics
Workforce

The supposed takeover of human jobs by artificial intelligence and robotics was a hot topic in 2023. Once you dig past the hyperbole, however, it becomes clear that the roles an algorithm or robot can actually replace are correlated with the strength of the underlying data set and the regularity of the working environment. Unfortunately for the robots, those who work in construction know all too well that neither of these is especially reliable in the industry.

A true robot takeover is likely still decades (or more) away. To date, skilled labor has been massively underserved—arguably overlooked—by technological opportunities, and therefore the data on these workers is lacking. The pervasive tendency to under-serve skilled workers is understandable to a degree. When technology companies were valued based solely on metrics like user numbers, pageviews, unique visitors and session times, “deskless” workers added little enterprise value as they went about framing walls and welding pipes rather than surfing the net.

While things have evolved since then, the industry still defines workers by simple, restrictive descriptors that serve as proxies for true capabilities—“education,” “experience,” “past employment” and “job title” in place of job-relevant skills. But the larger problem for construction is that data on skilled workers and job-relevant skills simply doesn’t exist. This makes workers hard to source, impossible to assess and laborious to hire. But data on skilled workers may just be the solution to today’s labor shortage as well as for a future augmented by AI and robotic work solutions.

GROWING THE ELIGIBILITY POOL

How did the industry get here? There hasn’t been a reliable way to assess and digitize skills, which is why the industry is forced to use proxies like the ones mentioned above during the hiring processes, potentially eliminating qualified candidates because they don’t meet the unnecessarily restrictive criteria of today’s job descriptions.

Nowhere is the power of skills-based hiring in construction better demonstrated than with women, who are chronically underrepresented in the industry—and who typically have a higher bar for self-qualification when applying for jobs. When job descriptions are written with skill-qualification transparency, the pool of eligible women grows by 26%.

Looking more broadly, construction skills are hugely transferable across not just trades but industries, including manufacturing and utilities. Removing trade and industry experience from job descriptions unlocks 25 million eligible workers. Increasingly, younger Americans don’t have high-school diplomas, and removing this requirement brings another 40 million eligible workers online.

RELATED AND INTERCHANGEABLE

Skills-based hiring isn’t new. In recent years, dozens of the world’s biggest brands—including IBM, Apple, Google and Neflix—have transitioned to this hiring model to expand their talent pools, increase productivity and better retain great workers. Two major trends are driving this shift. First, the U.S. labor-participation rate has been steadily declining for the past 20 years. Second, the mainstream adoption of HR technology across industries has led to the use of AI and big data for skills mapping.

Unfortunately, this has led employers to view the job or trade as the fundamental unit of work, when in reality every trade or job title is made up of a constellation of individual skills. Trade skills are also all related and interchangeable. Take the 10 most common skills required among millwrights, welders and pipefitters. There’s a 40% overlap between the skills of a millwright and a welder and a 50% overlap between the skills of a welder and a pipefitter. If builders searched for workers possessing those skills rather than workers who had those job titles on their resumes, they’d open up their search to hundreds of additional candidates.

With a skills-based approach, the industry could identify twice as many eligible candidates across the country than the Bureau of Labor Statistics data now reports as being available—at a time when the market needs to source and hire skilled workers fast. Not only are construction companies leaving $45 billion in unrealized annual revenues on the table, the industry also needs to build 7 million housing units to house some 16 million Americans, put government funding to work to solve our infrastructure crisis and tackle the climate crisis.

NO MORE PIGEONHOLING

If the industry is going to overcome these existential threats, it needs an action plan that empowers employers to leverage the existing skills of workers—and, in doing so, maximize the human capital already available to them. First, companies need to map out the discrete skills they need. They also need to remove proxies from job descriptions and replace them with skills. Ultimately, they must provide access to skills-based learning materials and develop skills-based pathways and training that give craft employees visibility into their career trajectories.

The era of pigeonholing workers into specific trades or roles is over. The future is not going to be built by employers that hire people because of their experience, education or past employment. It’s going to be built by visionary companies that hire people because of their skills—their ability to actually do the jobs for which they are hired.

Unlocking skills data and harmonizing the language for describing it is how the industry will solve its collective skilled-labor crisis.

by Fraser Patterson
Founder, CEO of Skillit

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