EMPLOYABILITY & LEARNING CULTURE

World Economic Forum | Putting Skills First: Opportunities for Building Efficient and Equitable Labour Markets | This report examines the critical need for skills-first approaches to address talent shortages, close skills gaps, and foster business growth across global labour markets. It identifies essential opportunities and showcases successful examples of skills-first initiatives led by employers, governments, and educational institutions.

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✨ OVERVIEW

The World Economic Forum's "Putting Skills First" report addresses the critical challenge of talent shortages in global labour markets. It emphasises the need for a skills-first approach, focusing on individuals' skills and competencies rather than traditional markers like degrees or job titles. The report identifies five key opportunities where skills-first strategies can be most effective: rethinking academic requirements, using innovative skills assessments, looking beyond personal networks, preparing for the digital transition, and getting ahead of the green transition. By showcasing successful skills-first initiatives from various sectors, the report provides a roadmap for organisations to transform talent strategies and create more efficient and equitable labour markets.

🧩 CONTEXT

Labour markets worldwide face unprecedented challenges, with job openings outnumbering unemployed workers in many advanced economies. In the United States, 6.4 million jobless workers are outnumbered by 9.6 million job openings. 2.9% of positions in Europe are currently unfilled—the highest rate ever recorded. Only 39% of businesses report a positive outlook for talent availability in the next five years, significantly lower than their optimism for talent retention (53%) and talent development (77%). This talent shortage is particularly acute in the Supply Chain and Transportation, Health and Healthcare, and Manufacturing sectors.

🔍 WHY IT MATTERS

Addressing the skills gap and talent shortage is crucial for several reasons:

• Economic Growth: Labour shortages hinder business growth and economic prosperity.

• Innovation: Skills gaps impede technological adoption and business transformation.

• Social Equity: Traditional hiring practices often perpetuate inequalities and limit opportunities for skilled individuals without formal qualifications.

• Future Readiness: The rapidly changing job market requires a more flexible and adaptive approach to talent acquisition and development.

• Global Competitiveness: Countries and businesses that effectively address these challenges will have a significant advantage in the global economy.

💡 KEY INSIGHTS

1. Rethinking Academic Requirements

   • 46% of workers say their formal qualifications are irrelevant.

   • Only 6% of global businesses believe that removing degree requirements would improve talent availability in their organisation.

2. Innovative Skills Assessments

   • 58% of workers believe they have skills not evident from their qualifications or job history.

   • 46% think employers focus too much on job history and too little on skills.

3. Looking Beyond Personal Networks

   • 51% of workers feel they've missed out on opportunities due to not knowing the right people.

   • Skills-first approaches can increase diversity, with a 24% increase in women in talent pools when adopted.

4. Preparing for the Digital Transition

   • 44% of workers' core skills will change in five years.

   • AI and Big Data skills have jumped 12 places higher in strategic importance for 2023-2027.

5. Getting Ahead of the Green Transition

   • The green transition is expected to be the greatest source of job creation among macro trends.

   • 46% of organisations plan to redeploy workers from declining to growing roles in the next five years.

🚀 ACTIONS FOR LEADERS

1. Implement Skills-Based Hiring

   • Revise job descriptions to focus on skills rather than qualifications.

   • Develop and utilise skills assessment tools to evaluate candidates more effectively.

2. Invest in Reskilling and Upskilling

   • Prioritize continuous learning programs to address the 44% of core skills expected to change.

   • Focus on developing digital skills, especially in AI and big data.

3. Broaden Talent Pools

   • Look beyond traditional networks and qualifications to increase diversity and access untapped talent.

   • Consider removing degree requirements where possible to open up new talent pipelines.

4. Prepare for the Green Transition

   • Develop strategies to redeploy workers into emerging green jobs.

   • Invest in green skills development across the organisation.

5. Foster a Skills-First Culture

   • Ensure executive sponsorship and HR governance for skills-first initiatives.

   • Implement data-driven approaches with clear KPIs to track progress and impact.

🔗 CONCLUSION

The skills-first approach offers a powerful solution to the pressing challenges of talent shortages and skills gaps in global labour markets. By focusing on individuals' actual skills and competencies rather than traditional markers of qualification, organisations can unlock vast pools of talent, drive innovation, and create more equitable opportunities. The success of this approach depends on a concerted effort from businesses, educational institutions, and governments to reimagine hiring practices, invest in continuous learning, and adapt to the rapidly changing demands of digital and green transitions.

🎯 KEY TAKEAWAY
Embracing a skills-first approach is not just a human resources strategy; it's a transformative business imperative that can unlock untapped talent, drive innovation, and create more resilient and equitable labour markets in the face of rapid technological and environmental changes.

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