From degrees to skills: unlocking untapped talent

The tightness of the labour market shows no sign of easing. Because of staff shortages, companies are already having to turn down work. 'That means you're losing market share. It comes at the cost of your revenue and your growth', says Joost van Genabeek, senior researcher and adviser in labour market innovation at TNO.

For decades, companies have been able to 'pick the best of the bunch'. That mindset still exists today, but there's barely any 'best' left to pick from. And what remains is just as attractive to other employers.

Defence, for instance, wants to grow to 100,000 people by 2030, he notes as a current example, and everyone on the labour market will feel that. Anyone who thinks AI will ease the pressure is mistaken. AI won't mean less work, but it will mean work that looks substantially different.

More perspective

Companies would do better to approach the search for staff differently. Skills-based working offers far more scope. It isn't about ticking off diplomas, training courses and experience, Van Genabeek explains. With all the changes taking place in the labour market, those things say less and less about what someone can actually do.

Skills-based working starts instead from 'capability'. It looks much more specifically and deeply at what people can do, and not through a single snapshot, but through much more regular follow-up.

'What skills and knowledge do people genuinely have? You also need to factor in that people grow in their jobs. They keep learning and picking up new things.'

Wasting talent

For both employers and employees, that's quite a difficult shift to make. That's because it combines new technology with social innovation in a complex way, he explains. Both sides need to start working and thinking differently.

The traditional structure still largely revolves around job titles, roles, pay, craftsmanship, career planning and status. But that tradition is creaking at the seams, something that's especially visible among younger generations. They disengage, leave fairly quickly, and in doing so, companies waste talent.

Where companies score much better is in matching work based on skills. Van Genabeek sees nothing but advantages. 'People fit better with the work that needs to be done. They enjoy their work more as a result, which boosts their motivation. And motivated people tend to be more productive.'

Staff turnover will fall as employees are deployed more effectively and can learn and develop in a more targeted way. That also makes companies more agile in the face of rapid change. Vacancies get filled sooner too, because skills-based working widens the pool companies are fishing in.

A Dutch standard

Companies do recognise these advantages of skills-based working. They may be fairly positive about it, but they're still hanging back, in Van Genabeek's experience. Yet the time for experimenting is long past. The necessary tools are already at their disposal.

Companies can, for example, already make use of CompetentNL, the Dutch standard for describing skills, which TNO co-developed. With it, everyone in the labour market speaks the same language.

More than thirty sectors have worked out development routes for employees, in which the skills are described per role. These routes also spell out concretely how people can progress, both within the sector and beyond it. On top of that, more than a hundred commercial providers offer digital platforms for skills assessment and skills matching.

A skills passport on the way

Together with partners, TNO is running pilots on the use of a skills passport, because knowledge and skills naturally need to be measured and validated too. This gives employers and employees an instrument that can prove which knowledge and skills someone has, at what level, and how well they fit a given role.

That passport belongs to the employee: it's digital, personal and portable. Employees can use it to pull their skills from education and labour market databases, and then show them to interested parties, such as employers and career professionals.

TNO is running several pilots with this passport, including in the metal and electrical engineering industry. There, the work is so specific that standard diplomas barely exist for it, Van Genabeek explains.

'But through their work and non-formal training, these employees have already built up a great deal of knowledge and expertise. What we're trying to do now is capture all of that clearly in the skills passport.'

Think also of adding training courses, with or without a certificate, or the outcome of conversations with a career coach or a digital skills assessment. 'Even less formal evidence than a diploma can be useful in determining whether you're suited to certain work.'

Soft skills count too

Soft skills matter just as much as hard skills. So skills such as communicating well or collaborating effectively also feature in the passport. With the labour market changing rapidly, partly due to AI, many hard skills are becoming outdated, while soft skills are becoming more important for making the switch to other work.

'What the skills passport also shows is the danger of over-specialising. At that point, people are advised to broaden their development a bit. When your work disappears, and you see that risk especially in the IT sector these days, you've got a problem. You need to be able to fall back on other skills.'

TNO is the only organisation in the Netherlands offering an integrated approach, thanks to a unique combination of data, science and implementation. With the skills passport, TNO, as an independent knowledge institute, aims to improve the quality of what's on offer and to respond to every need in practice through example pathways.

All the tools are available

Describing, validating, developing: all the resources needed for skills-based working already exist. There's no longer any excuse to keep waiting to make the switch. So what does Van Genabeek recommend to companies wanting to start today?

'Hold your vacancies up to the light, critically. Do they properly reflect the changes taking place in the work at your company? Look at which skills are tied to that work. So start by making your vacancies skills-based.'

Skills-based in four steps

1. Start with a role and job analysis. What do employees actually do? What's changing about the work, now and in future?
2. Adjust career development accordingly. Using existing standards, data and tools, employees can determine which skills they have, which they need for their work, and which they still need to learn.
3. Implement the skills passport. This allows employees to prove and validate their abilities.
4. Create a learning work environment. Employees learn a great deal unconsciously simply by doing their jobs. The challenge is helping them become aware of this by starting to think and act in terms of skills. It's also important that managers, career advisers and trainers pay more attention to this.