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Should Your Organization Hire for Skills or Capabilities?


By Ashish Mediratta

Many researchers have indicated that most jobs in the year 2030 have not been invented yet. Organizations worry today about finding the “right” people with the “right skills” if they are to continue to thrive / survive. And rightly so: how does one keep pace with a scenario of redundancy of “skills”, most of which have a shelf-life of a couple of years? And, how does one prepare an organization for “future skills”, when even the roles have not even been invented yet?

Workplaces usually look for a potential employee to have a certain set of skills. After all, success requires the right skills. Skills can be gained, and used to learn yet more skills and to reach new achievements. They are measurable and are the currency of any successful business strategy.

Skill is defined by the American Heritage Dictionary as “proficiency, facility, or dexterity that is acquired or developed through training or experience.” Competing and winning means getting a solid understanding of the skills held by a company’s workforce and job candidates.

How will companies hire and retain employees, if skills are continuously changing? Going beyond skill is capability. A capability is the combination of the skills, knowledge, and experiences employees need to succeed both now and in the future.

A skill shows what an employee or job candidate can do now. A capability is what someone could do, even if they haven’t done it before.

When a company can understand the capabilities of every one of its workers-and each of the individuals can also understand their own capabilities and potential-the company gains significant new powers to stay competitive in their current and potential markets. Instead of looking only for someone who knows a given computer language, for example, they could hire someone who knows a similar language, and could pick up quickly on the newer language. And the company could help prepare itself for emerging growth areas.

Or, imagine an employee who’s a little bored in their job, and looking for a new challenge. Instead of quitting, if a company and the employee had a good understanding of each employee’s capabilities, the employee could find an internal job, one they have the potential to do, even if they hadn’t done it previously. They haven’t done that exact job before. The company could see who in its own workforce has the capability to work in this growing area. Essentially, an organization should aim to understand the “capabilities” of its employees, rather than keeping records of their “skills.”

But why are we talking about offering a job to someone who never did it before? We are preparing for a new job market which does not exist at the moment. The world is adopting new technologies of the 21st century, like AI, ML, and robotics that will change the skill set requirements for jobs that do not even exist today. The skill sets required for those jobs might be fundamentally different from the ones today. Thus, the laser focus on finding people with the right skill sets must be widened to finding people with capabilities.

Capabilities are intangible assets. You can’t see or touch them, yet they can make all the difference in the world when it comes to market value.

What we can conclude is that skill sets and experiences are ‘variants’ wherein hiring for skills is inadequate for the future of work. What is more important is to be capable of doing a particular task. Changes in technology and business processes have always opened new job requirements. To fulfill those roles, if organizations look only for skilled workers or people with prior experience, then there might be a very tight talent pool to choose from or maybe no one to do that job at all.

Widening the scope of search from skills and experience, to capability, will increase the chances of finding a wider pool of talent that will prepare a company for future success in disciplines that do not even exist today.

(The author is Vice President and Principal, Talent Transformation at Eightfold India and the views expressed in this article are his own)

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