While the economy certainly isn’t serving everyone the way it should, there’s a general consensus that times are good. Unemployment rates are at historic lows. The International Monetary Fund recently lifted its U.S. growth estimate for 2018 to 2.9%. And many economists predict that this current era of economic expansion might be the longest one ever.
Skills-based practices serve businesses well during good times. When businesses value candidates’ skills above all else during the recruiting, screening, interviewing, and hiring processes, they’re more likely to find someone who has the skills to excel in their position. And when businesses value employees’ current skills and know exactly what skills these employees need to develop to help keep the company competitive, retention improves. The candidate wins, the employee wins, and the business wins.
Today, we’re at a moment where businesses are very open to skills-based practices: with unemployment so low, employers struggle to find the talent they need to stay competitive and grow. In such a tight labor market, skills-based practices can give them an edge. Many tech companies, for instance, have removed degree requirements from their coding jobs, in recognition of the fact that many of the market’s most talented coders often don’t have a four-year degree.
What some businesses might not know is how skills-based practices can help them in a downturn. And while the next downturn may be years away, it’s definitely coming.
In downturns, investment decisions are much more critical than in times of plenty. That’s why using skills-based practices during downturns is so important: you need the right people with the right skills to see you through the tough times.
At Skillful, we often talk about how workers, if they want to remain relevant, need to become lifelong learners. The fast-paced world of work requires it. We also stress that, if businesses are to survive, much less succeed in the economy of the 21st century, they need to be lifelong learners as well. Talent solutions that worked yesterday aren’t working today and certainly won’t work tomorrow.
Some businesses are already preparing for the future: AT&T recently announced that it will be retraining 100,000 of its workers in the skills the business will need to grow. Jeff Bezos has said he is “particularly proud”of Amazon Career Choice, a program that offers employees financial assistance to learn in-demand skills.
There’s a reason that AT&T and Amazon are on the forefront of this push for skills and retraining: they recognize the need to change with the times. My last company, American Express, has been around for more than 160 years because this wisdom is engrained in their culture: they started out as an express mailing company and through many reinventions have come to be number 85 on the Fortune 500.
You don’t need to be a Fortune 500 company to implement skills-based practices. In fact, skills-based practices can have enormous effects on small business operations. As serial entrepreneur and CEO of Flow, Andy Seth has said, “Not every business can afford to make big mistakes. One hire matters. If you’re not a giant, your hiring makes a colossal difference…To get great hires, figure out what skills they have and what skills you’re going to teach them. By solving this puzzle, you’ll provide your employees real career paths, and you’ll make money.”