How Skills-Based Hiring Addresses the UK's Talent Shortage

The UK is facing a crisis. It's not splashed across the front pages, but it's a crisis nonetheless. We're talking about the growing talent shortage that's threatening to derail businesses across the country.

Let's look at the facts.

According to the Open University Business Barometer 2023, 73% of UK organisations are currently experiencing a skills shortage. The cost? It is estimated its a staggering £6.6 billion annually in inflated salaries, temporary staff, and recruitment fees.

But why is this happening?

The traditional hiring model, focused on degrees and years of experience, is falling short. It's like trying to fit square pegs into round holes. The jobs are there, the people are there, but the match isn't happening.

Enter skills-based hiring.

This approach prioritises a candidate's abilities over their paper qualifications. It shifts from "What have you done?" to "What can you do?"

So, how does this help bridge the UK's talent gap?

Firstly, it widens the talent pool. By focusing on skills rather than specific qualifications, companies can tap into a broader range of candidates. This includes career changers, self-taught experts, and those with non-traditional educational backgrounds.

Take Sarah, for example, a former retail manager who taught herself coding. Traditional hiring might overlook her for a tech role. Skills-based hiring, however, recognises her abilities, not just her CV.

Secondly, it addresses the rapid pace of change in today's job market. The World Economic Forum predicts that within the next five years, 23% of global jobs will change due to industry transformation, including through artificial intelligence and other text, image and voice processing technologies. Skills-based hiring allows companies to adapt quickly, focusing on the skills they need now, not the qualifications that were relevant yesterday.

But it's not just about filling vacancies. Skills-based hiring is reshaping the UK workforce.

Recent reports indicate that 46% of UK employers have increased their investment in training to tackle skills shortages. This focus on skills development creates a more adaptable, future-proof workforce.

Moreover, it's promoting diversity. By removing barriers like degree requirements, skills-based hiring opens doors for underrepresented groups. The Social Mobility Commission found “a change in selection method may reflect employers redefining how they assess “talent” or be an attempt to attract candidates from more diverse backgrounds”, potentially increasing talented individuals from diverse backgrounds.

However, implementing skills-based hiring isn't without challenges. It requires a shift in mindset and processes. Companies need robust skills assessment methods and training for hiring managers.

This is where consultancies like The ORARA Group come in. We help UK businesses navigate this transition, providing expertise in skills mapping, assessment, and implementation of skills-based hiring strategies.

The benefits are clear. Companies adopting skills-based hiring report improved job performance, higher employee retention, and a workforce better equipped to handle future challenges.

As we look to the future, skills-based hiring isn't just a trend—it's a necessity. It's about creating a more dynamic, inclusive, and resilient UK workforce.

The talent is out there. The skills are out there. It's time we changed how we connect them.

Mind the gap? With skills-based hiring, we might just bridge it.