Skills-First: An emerging approach to managing human resources for the new world of work

A new research study by L&D Skillnet in collaboration with Skillnet Ireland and the Learning & Development Institute (L&DI) has highlighted the need for skills-first human resources (HR) to bridge emerging talent shortages. 

The findings, published in the report Skills-First: An emerging approach to managing human resources for the new world of work, revealed that most businesses are unprepared for bridging emerging skills gaps and need to align the supply of skills with organisational strategic goals. 

According to the report, organisations internationally face prolonged and chronic shortages of the skills required to deliver on their strategic objectives. Three in four EU companies have difficulty in finding workers with the skills they need, while the skills landscape is changing quickly, and the half-life of skills continues to fall. 

Tracey Donnery, Director of Policy & Communications, Skillnet Ireland said: “Irrespective of size or sector, businesses within Ireland and across the world are facing challenges in attracting and retaining workers with both the talent and skills they require. The research outlines the emerging area of skills-first human resources and demonstrates the need to align the supply of skills with organisational strategic goals. At its core, skills-first HR puts skills front and centre of an organisation’s HR strategy.” 

The study was led by Professor David Collings (TCD) and Dr John McMackin (DCU) who found that building employee skills and capabilities is identified as the number one priority for HR leaders. 

Data from the survey and other research suggests that most organisations are poorly prepared for meeting these skills needs and structural labour market changes combined with demographic changes mean that these challenges are likely to grow in the future. The results also suggest that skills-first HR is very much in its infancy. However, real momentum towards skills-first HR was identified in Skillnet Ireland case firms. While few firms felt that they had a mature or fully operational skills-first model, most were experimenting with, or piloting, skills-first initiatives in critical areas of their business. 

The report also identifies key priorities for implementing a skills-first approach to HR. It recommends the development of general training programmes to introduce the principles of skills-based HR to build awareness of emerging approaches that could be highly beneficial to members. 

The development of toolkits to assist members in conducting skills audits, developing internal demand analysis, building business cases and so on is urged to help adopt skills-first approaches to HR. The development programmes for HR professionals around data analysis and storytelling is also recommended as it would offer significant potential value for members. 

 Researchers Professor David Collings and Dr John McMackin said: “2023 has been designated European Year of Skills by the European Commission, which reflects the challenges organisations now face in meeting current skills needs and future challenges in meeting emerging skills needs. Our research shows that many organisations are redesigning their people management processes to respond more dynamically to and plan for skills demand, which in turn will enable organisations to adapt to changes in their environment with greater agility. We label these responses skills-first HR and our report outlines the key enablers of these approaches well as identifying the steps an organisation should follow in moving towards skill-first HR”. 

Sinead Heneghan, Chief Executive of L&DI, said: “This research offers valuable insights into how HR departments can proactively address the skills gap and equip their organisations with the necessary tools for success in the future by adopting a ‘Skills First’ approach to managing human resources and future-proofing learning and development. 

“This research finds that high-performing organisations are leading the way in building skills databases and leveraging that information to deploy internal talent and opportunity marketplaces.”