A costly skills crisis
If you’re reading this, then you’re probably already aware of the skills crisis that’s affecting how we hire right now. But, just as a reminder, here’s how the World Economic Forum sees it shaping up in the next three years:
- 85m jobs will disappear due to new technologies
- 97m different, digital-first roles will appear
- 50% of the workforce will need to reskill
The result? A skills mismatch like nothing we’ve seen since the Industrial Revolution. Millions of candidates, but few with the skills you need. This mismatch looks set to cost UK businesses £38bn in unrealised growth, every year.
It’s a stark picture. Which is why, in our latest webinar, we explored what we see as the first step out of this crisis: abandoning experience, and hiring for potential.
Drawing on experience from Arctic Shores’ CEO, Robert Newry, as well as insights from Ed Halliday, Operations Director at futureproof, and Mari Milsom, independent workforce consultant and former Global Head of Workforce Strategy at Capita, here’s how to hire for potential in seven FAQs.
Hiring for potential: your questions answered
- “What do you mean by potential? What is it you’re actually assessing when you talk about potential?”
Robert Newry: “Potential is ‘potential to do the job’ so how well a candidate’s qualities match up to those linked to success in a job. It often means having a blend of personality characteristics and mental agility.
The blend of qualities varies by role and company. On one hand, you might prioritise creativity and resilience. On the other, learning agility or adaptability. Unlocking true potential – and finding the best fit – means measuring what matters. And abandoning what doesn’t.”
- “Why do we need to challenge ourselves as organisations to be braver, and to start thinking differently about hiring for potential (as opposed to just experience)?”
Robert Newry: “I hear constantly about the challenge all companies are experiencing in hiring people with digital skills or digital economy experience; so, we know there aren’t enough people with the skills we need, yet we still recruit based on experience – it’s madness!
Trying to fill a growing number of roles from narrow pools of experienced candidates is causing spiralling salaries and agency fees – a cost to employers of £6.6bn in the next year. Add that to the £38bn UK business can expect to see in lost growth as they struggle to fill their roles, and it’s clear that something has to change. Being brave and pivoting to hiring for potential makes good business sense.
What’s more, self-reported descriptions of experience don’t give a reliable picture of capability – so how can a CV predict anything? When we see an experienced candidate, we’re primed to assume they’ve got the necessary skills and behaviours. With the shift to hiring for potential, we’re advocating instead for direct measurement of what matters in the role – qualities like learning agility, problem-solving, and empathy. There’s a saying at Arctic Shores that I’m fond of – ‘to find extraordinary people, it’ll take more than ordinary measures’. Right now, businesses need more than ever to look at new ways of identifying the talent they need.
- “How do we get stakeholders in the business – leaders, hiring managers, etc. – on board with the shift to hiring for potential?”
Ed Halliday: “There is no easy answer. Because hiring for experience has been embedded for so long, moving away will always be uncomfortable. I would say the first thing is to be courageous in how you approach those conversations.
Second, be patient when bringing others onboard. If you’re trying to bring about change at a more mature organisation, you can expect to see slower uptake – but then a more predictable rate of return on your investment in hiring for potential.
And lastly, I’d have a clear plan for what happens beyond the hiring process. If you’re hiring for potential, how you develop your candidates only becomes more vital. Don’t just tie this into the needs of the role, but your culture too. Building a clear pathway for high-potential employees means they’ll stay for longer, contribute faster, and ultimately thrive.
Mari Milsom: “My advice? Be the one to take that bold first step. As Ed said, driving real change takes real courage.
Then, get one or two stakeholders onboard to act as early adopters, trial something to prove how hiring for potential works. Use that evidence and your early adopter stakeholders as internal champions to move that conversation forward.
Here’s one tactic I’ve used a lot to get internal stakeholders to reconsider that overreliance on experience. I present this scenario: you’ve got two team members, but you can only keep one. The first is experienced, but they don’t reflect the behaviours and qualities you’re looking for. The second is an inexperienced team member who shows great learning agility and expresses brilliant behaviours for both the role and culture. I ask: which one do you want to keep?
Most people will go for the one that has the right motivations and behaviours – because that’s who they want to work with. And it’s who they feel will be most successful. So, let’s hire more of those people”
- “I understand removing the CV for graduate roles. But what about ‘experienced’ hires? How do I move away from the CV in that space?”
Robert Newry: We’ve relied on CVs as our way of assessing who to interview and who not for so long now that the CV is like a comfort blanket – we can’t think of any other way of doing it! But as I said before we don’t have enough skilled people so we have to think differently about how we hire and that means looking at how we recruit. We need to look at what qualities a candidate has to offer and can the skills be trained. Experience can still be relevant but in the context of supporting the qualities rather than the starting point.
One of my favourite examples of this is one with our client Lotus Cars who are investing heavily in a new manufacturing plant in Norfolk. They realised that there were insufficient people with the skills they needed in the area so have focused on hiring for potential. Their inspiration came from the revelation that two of their best paint shop workers’ only previous work experience prior to Lotus Cars was at McDonalds!
- “If you have many roles and/or a high volume of applicants – say 2,500 or more a year – how do you standardise the process of hiring for potential?”
Mari Milsom: “This is such an important point, both to drive adoption across the business and to guarantee success. Firstly, make sure you’re totally clear on the success criteria for your role. By this I mean the behaviours and skills that are most important for success in the role and the business.
Then, you need to consider how to assess for those qualities throughout the process – both in your initial sifting in and your interviews. This way, you give hiring managers a consistent framework against which to make the hiring decision and reduce the risk of subjective criteria creeping in especially at the interview stage.
- “Does adding an assessment stage in the sifting process discourage candidates from applying for roles? Or, alternatively, lead to higher drop-out rates?”
Robert Newry: “If you’re hiring for experience in a market short of candidates, there’s always a risk that they’ll take the path of least resistance, and only explore opportunities where they don’t have to do any more than turn up for an interview. .
But this goes to the heart of what we’re saying – hiring for experience isn’t the answer to the skills crisis. You have to broaden your search and with that the talent pool you consider. And this is something candidates want too.
Recent research shows that three quarters of people want to be judged on their potential – not their CV. So most candidates will see adopting an assessment to help you scrap the CV, and uncover true potential, as a good thing. The key is communicating the purpose of the assessment, i.e. an objective way to help you see their potential.”
Mari Milsom: “Following Robert’s point on communication, I’d add the importance of transparency.
Candidates are more likely to drop out of a process when they’re in the dark, don’t understand the process, and feel like they can’t demonstrate that they have what it takes – especially inexperienced candidates. For example, if you’re a former carer applying for a corporate role, you’re likely to drop out of the first stage if you and you are asked for specific examples of where you’ve done X or Y in a previous role. This doesn’t mean the carer won’t be a great employee and is why scrapping the CV and capability-based application form questions helps unblock access to potential.
So, I’d advise giving candidates all the information, at every stage of the recruitment process – especially around any assessment. Be clear about the qualities you are looking for and how an assessment helps you measure them. This transparency lets them know what to expect (and what’s expected of them), as well as anything they could be asked for later. This, alongside an assessment that looks for strengths rather than weaknesses, helps give everyone a fair shot while making drop out less likely. The aim is to make it fairer for all.”
Ed Halliday: “For us at futureproof, it’s critical that our hires have a fast speed to impact and staff in the role. Using an assessment has resulted in a smaller but stronger pool coming through for our final round of interviews.”
- “What role does AI play in the shift from experience to seeing potential?”
Robert Newry: “Technology, when used in the right way, can and should play a big part in helping us make better decisions and I feel it’s important that we look at it through that lens. For me it’s about how technology can augment the selection process? How does it help us see more in people, beyond our subjective perspective, and find those people with the real potential to be a great fit?
The risk with technological advances like AI arises when it’s poorly implemented and lacks best practice and oversight. We’ve already seen how this caught out Amazon’s early attempts at hiring algorithms, for example.
When looking at introducing new technologies into the recruitment process, it’s helpful to ask: what evidence do you have and how has it been validated? Ask others who have implemented and look for the views of subject matter experts.
We use technology all the time to make more informed decisions and the point is that the best use of technology is where we understand it and have oversight in its configuration and set up. We need technology to help us see more in people and create an opportunity for all to benefit from the growth in the digital economy.
The shift from experience to potential can be scary. But if you’re looking to make the leap, Arctic Shores’ platform can help. Reach out here to find out how.
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