Reach for the “STAR”s: How companies should embrace skills-based hiring

As large companies contend with the pandemic-induced “great reshuffle”, many are now looking for a new type of talent.

In the United States, this new talent is known as skilled through alternative routes, or STAR talent. They are without bachelor's degrees, but have rich and relevant skills as well as work experience that prepare them for higher value-added roles and responsibilities.

Singapore is well positioned to this new STAR-driven talent dynamic, as skills emerge as the new hiring currency in the market, where there are more job vacancies than workers available. In fact, there are 2.5 vacancies for every unemployed person here in Singapore.

This means that employers must look to widen the talent pool by going beyond the convention of looking at education qualifications. But how might companies find the right alternative skilled talents in this competitive market?

One emerging trend is skills-focused programmes or work-study programmes. For instance, the Royal Melbourne Institute of Technology (RMIT) works closely with industry partners to design their short courses to reskill or upskill professionals for technical fields. Similarly, at the Dyson Institute of Engineering and Technology set up by global technology firm Dyson, trainees divide their time there by working at the company while receiving higher education tailored to meet Dyson’s demands.

The key to developing a comprehensive blueprint for a skills-based future is an organisation that is willing to go down different paths to discover new skilled candidates.

How to hire a “STAR” talent

While companies are becoming more proactive in looking for STAR talent, one hurdle is seeking out talent with relevant trade certifications or on-the-job training who may not be active in the job market.

These talent may not hold degrees, and include freelance or gig workers, homemakers, retirees, or even those that have fallen through the cracks of the education system. In fact, many of these talent may not be employment ready, and attracting them through conventional channels will be difficult, perhaps even impossible. They will also need help in transitioning to higher value-added roles that they have typically been excluded from – by building their confidence and refreshing their skills.

However, there are limited options for these talent. They often may not have the know-how or means to get on the right programmes to equip them with the right skills that companies are looking to employ. Here is where educational institutes and companies can collaborate and do more.

Skills offer STAR power

Consider this scene: A buzz of activity fills a seminar room as professionals engage in discussion with their faculty instructor, a senior business executive, on the latest in supply chain and logistics management. The next day, the seminar rooms “transforms” into a shipyard run by an AI-powered business simulation game. The professionals try their hand at applying and practicing their newly acquired skills in preparation for employment in the maritime sector.

As new skills programmes are developed to equip talents with in-demand industry skillsets, such scenes should become increasingly common.

Training programmes that are innovative and aligned with industry needs, will not only solve the current talent shortage that companies are grappling with, they could even help to retain talent better. In Singapore, a hub for various industries, companies will require diverse employees who are adaptable and ready to learn. Leading industry experts have also recently spoken about how firms need to invest in skills development as part of their talent retention strategy.

To this end, companies should collaborate closely with educational institutes to develop programmes to groom these STARs, to meet their talent needs and operational demands.

One example is Singapore Institute of Management’s partnership with technology giant HP to run 15 courses on sustainability in smart manufacturing. These courses aim to upskill more than 1,500 workers from 180 firms in the manufacturing sector. Another is Fusion, a work-study programme in collaboration with multinational information technology firm NCS. Up to 200 full-time employees at the firm will be able to pursue an undergraduate degree in the information and communications technology sector, in addition to learning in areas like leadership, soft skills, and general business skills.

By equipping individuals with transferable skills, they are empowered to work across adjacent sectors. For instance, an employee with a background in the built environment sector could be developed to perform a similar or higher value-added role in the manufacturing industry.

Such practices not only facilitate an equitable hiring process, but provide companies with the right talent through a previously untapped talent pool. This frees them from the constraints of searching for conventional talent, which not only may not be right fit, but comes at a premium.

While companies continue to grapple with a tight talent market, they can ease their recruitment challenges by embracing a skills-based hiring approach that places a greater emphasis on skills over educational qualifications. In so doing, companies are set on the path to long-term success by reaching for the STARs.