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4 HR Trends Shaping Talent and Skills Development in 2021

By Jonathan Finkelstein, CEO of Credly

When 2020 began, few in the human resources industry could have predicted the record U.S. unemployment figures and remote work shift that came to define the year 2020. HR teams scrambled to fill gaps and make the most of these incredible circumstances. From minor tweaks to major transformations, companies adapted their usual processes to discover what worked best for their employees, their customers and the organization at large.

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Upon the start of 2021, companies and their HR functions face two key trickle-down effects of the pandemic: a still-challenging labor market and a deep organizational desire for connection and growth. Employees are seeking ways to improve their skills and gain recognition for what they can do, and employers want to hire or promote the right people and deploy the best technology to thrive in this economic climate. With that in mind, the Credly team identified four trends shaping the HR mindset and preparation for the new year.

Employers will be under increased pressure to retain top talent

This past year saw companies move their entire workforce into a remote environment, a massive shift that affected how employees interact and connect with each other; simultaneously, remote work and job insecurity also hindered how valued employees felt by their employers. The decrease in employee satisfaction sent up red flags for employers invested in their workforce’s success — especially in organizations wanting to retain their top talent. Leaders who operate with the mindset that their incumbent workers should just be grateful they still have jobs in this climate are in for a rude awakening.

As we move into 2021, smart employers will be making more conscious efforts directed at retaining their higher performers. Companies will need to invest in resources and processes that help them understand the verified skills, talents and professional interests of their workforce, and then make human capital decisions based on all the information available. Well-crafted internal advancement opportunities, tailored to maximize top talent’s skills, can overcome the appeal of leaving the organization for another role.

Companies will further cultivate a culture of learning

As part of developing a culture geared toward retention, companies should investigate how they can better help their employees learn and develop. Meaningful and transferrable professional development opportunities are among the most sought-after employee benefits, and both employee and employer stand to gain from them. Yet new competencies are only as valuable as they are provable and discoverable.

In 2021, companies will invest in ways to pair outcomes from learning programs with digital credentials. Employees who earn these credentials demonstrate proficiency in both technical and human skills. System-wide employer-issued recognition programs also show how seriously a company takes its culture of learning and attests to the strength of its commitment to growing each employee.

Skills-based hiring will increase access to talent, and foster more diversity in the workforce

Whether hiring new talent or moving employees around an organizational chart, managers have historically relied heavily on rough proxies that do little more than approximate what skills someone may have. University degrees or years of experience in a prior role have long served as stand-ins for actual competence. While the proxies help shrink an unwieldy pile of resumes to a more manageable number, they also narrow one’s view of the talent pool, summarily eliminating qualified — and what might be the best — candidates before their resumes make it to a hiring manager.

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In the coming year, companies will pursue a more skills-based approach to decision-making in hiring and advancement. Managers will consider what skills an ideal employee must have to succeed in a particular role, and then seek internal or external candidates who possess those skills. That includes looking beyond the traditional profile: for example, credentials verifying on-the-job experience plus a coding bootcamp certification can create a skill set as strong or stronger than the signal sent by a college degree alone. This skills-based approach can create a more diverse, inclusive, qualified workforce that is ready to get to work on day one.

Skilling initiatives will require a common language

An employee’s skills are continuously evolving – a trend that only accelerated during the pandemic as individuals and companies adapted to massive disruption, workforce reductions, and reorganizations. This year, many companies invested heavily in upskilling and reskilling initiatives to support employees’ desires for growth as well as to fill their own internal organizational gaps. Yet, many company leaders struggled to identify and verify what competencies employees actually possessed. Without agreement on that front, comparing two employees’ skills became apples-to-oranges, and leaders faced a real challenge in mapping skills across business functions.

Digital credentials have emerged as the source of truth for the skills and abilities of the workforce. They are a universal method of describing and signaling what people actually know and can do, which means that skills can finally become the trusted currency for human capital decisions. And credentials are backed by the full faith and credit of those organizations that have assessed or seen a person’s capabilities in action. As organizations adjust for 2021, they will increasingly adopt this common language to make fast, trusted and consistent human capital decisions.

2020 was an unprecedented year, and HR teams across the globe rose to meet many challenges to engage top talent and develop essential skills across the organization. Continued investment and growth in these key areas will help ensure companies can attract, retain and strengthen its talent into 2021 and beyond.

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