The new global unit of value that drives the new skills economy
|Sep 19||Public post|| 9|
Past practices are becoming obsolete
Identifying the best talent is paramount to every business.
Degrees, GPA scores, school rank, and flashy job experiences used to be the ‘qualifications’ that mattered most to employers and recruiters—and, hence, to parents, students, and prospective jobseekers.
Over the past several decades, these cut and dried ‘data points’ determined how marketable a jobseeker was, as well their likelihood of getting a (good) job.
But this market dynamic is rapidly becoming a thing of the past, thanks to the convergence of digital innovations, business needs, and shifting expectations (around corporate purpose, equity, inclusion, diversity, and sustainability).
GPA, for example, is a score that says nothing interesting or useful about potential future hires. GPA is an average of someone’s scholastic achievement. By definition, an average says very little—and, more critically, doesn’t answer the pivotal business question: “Can this person do this work or perform that task successfully?”
Degrees and diplomas offer similarly low value.
This is why, as the Financial Times reported recently, corporate recruiters are now looking for new information:
In the same vein, employers, such as Ernst & Young, are changing their approach to identifying future hires:
The emergence of the skills economy
Enter the skills economy where businesses seek out people who can do great work, work well with others, produce meaningful results, and create lasting value. In this new economy, employers are looking for ‘honest signals’ that tell, reliably, what one can do and how well one will perform. (If you’ve got time, check out MIT Sandy Pentland’s video.)
Skills are honest signals that correlate most strongly with future performance and productivity. This is why the skills economy operates on the basis of a whole new category of information that quantifies, and uses, people’s skills as the new global unit of value.
This structural shift in the economy is the result of businesses reckoning that old school ‘qualifications’ are not correlated with on-the-job performance and business value creation.
In this new economy, people will invest in developing, building, demonstrating and certifying their skills; while businesses will seek out and hire people with varying skill portfolios.
Superskills and Microskills
The market uses various terms to describe skills (eg, abilities, skills, competencies, soft skills, work skills, hard skills, etc.). It’s time to sort this out and use a simpler vernacular going forward.
As we see it, skills include two types of skills: superskills and microskills.
Superskills are the “components” that make up the unique “operating system” of a person. These include, but not limited to, problem solving, critical thinking, quantitative thinking, creativity, listening, communication, change agility, perseverance, motivation, willingness to learn, curiosity, coachability, social skills, leadership, risk-tolerance, and working in teams.
Microskills are the “apps” that the person “runs” (or could run) on their unique superskills “operating system.” These are the things a person can do really well (or learn to do), given their unique superskills footprint. Microskills can include graphic design, software development, financial modeling, equity trading, project management, enterprise sales, product development, QA testing, school teaching, journalistic writing, market research, urban planning, etc.
What does the skills economy mean for you?
As skills become the new global unit of value, we’re going to see radical changes that reshape the market for talent. The key changes include:
Market breadth: Superskills are agnostic to race, gender, age, socioeconomics, etc., thereby making the market bigger and broader.
Market depth: Microskills eclipse the noise of pedigree and the irrelevance of where and how people acquire their skills, thereby producing an exponentially more liquid market.
Market scope: Future hires are everywhere, far beyond the gated walls of college campuses.
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Stay tuned for our next post on the fractioning of jobs.
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