Leadership appointments: Why you should adopt a skills-led hiring approach

The traditional leadership paradigm has changed. Leaders operate in a dramatically more complex landscape – their roles are more difficult, more dynamic, and require additional competencies and attributes in order to succeed.

Strategic thinking, the ability to drive results, and stakeholder management – the bedrock of leadership – remains unchanged, and are as crucial today as they were thirty years ago. But the changing nature of business now requires an understanding of new and evolving forces. 

Aptitude in, and knowledge of, sustainability, social responsibility, cultural and political developments, and Gen AI, is fundamental to modern leadership. Boards want leaders who can make data-informed decisions, adapt to geopolitical risks, are highly people-centric, and innovate and execute in the face of constant disruption. Emotional intelligence, fairness, learning agility, vision, and resilience are all necessary in navigating the internal and external demands of leadership roles.  

This requires a new playbook for discovering and developing leaders – one that goes beyond experience alone, and emphasises potential, character, and importantly, skills. A ‘skills-led’ approach, identifies the specific competencies, strategic thinking abilities, leadership qualities, and other relevant skills crucial for senior leadership roles. Skills-led hiring matches the unique challenges and opportunities facing the organisation with leaders who demonstrate the ability to navigate similar situations. 

It involves a thorough assessment of a candidate's problem-solving abilities, emotional intelligence, adaptability, innovation, and capacity for strategic vision. Using objective and measurable criteria, it reduces biases and subjective judgements, while accurately evaluating a candidate’s potential to succeed in the role through competency-based assessment and behavioural interviews.

In our experience, there are numerous other benefits to this approach. Skills-led hiring expands the pool of viable candidates, improves leadership diversity, and skills-led hires tend to stay longer in their roles.

Skills-led hiring broadens the talent pool

Skills-led hiring focuses on specific skills and abilities while also considering leadership potential. This necessitates including candidates from non-traditional backgrounds, expanding the talent pool beyond traditional markers such as work history and specific positions. 

It enables an organisation to identify individuals with the necessary skills to succeed in a leadership role, but who would otherwise have not been considered through conventional hiring practices. What’s more, candidates who excel in the required competencies often do so regardless of industry – their leadership skills are transferable. By not tying the scope to a specific industry, the pool of viable candidates grows. 

Broadening the talent pool increases the chances of identifying individuals with the combination of skills and attributes unique to the organisation, its culture, and its challenges. A skills-led approach also ensures the selection process is aligned with evolving market forces, thereby enhancing the organisation's resilience, competitiveness, and ability to thrive in a dynamic business environment.

Skills-led hiring increases leadership diversity

A skills-led approach increases diversity by focusing on the actual competencies required for the role, rather than traditional credentials that would confine the search to stringent criteria, and so inadvertently favour certain groups. 

This methodology levels the playing field by allowing candidates from various backgrounds, including those with non-traditional career paths, different education, or from underrepresented groups, to showcase their abilities and potential. 

By valuing demonstrated skills and potential for growth over pedigree or past titles, organisations open the door to a wider range of experiences and perspectives. This inclusive approach not only diversifies the leadership pipeline but also challenges and disrupts the status quo, encouraging a culture of meritocracy where talent is recognised and rewarded based on what individuals can contribute to the organisation.

Skills-led hires stay longer at companies

Skills-led leadership hires tend to stay longer at organisations because they are selected based on their ability to meet the specific demands of the role. This creates a stronger alignment between the individual's competencies and the organisation's needs. It also ensures leaders are both capable and engaged in their roles, fostering a sense of fulfilment and purpose.

Furthermore, leaders hired on the basis of their skills are likely to be more adaptable and resilient, enabling them to grow with the organisation and tackle new challenges as they arise. This adaptability contributes to their long-term retention, as they are better equipped to evolve within the organisation and find continuous opportunities for professional development.

A BSG report found those hired on the basis of skills are not only more loyal to their employers, with a 9% longer tenure than traditional hires, but work harder and are more motivated. The reason is simple. Skills-led hiring more accurately aligns the candidate with the right role and organisation. Because they are better matched, the individual feels they are in the right place, and so will stay with the organisation for longer. Research from Deloitte shows organisations with skills-led hiring are 107% more likely to place talent effectively, and 97% more likely to retain high-performers.

Making your next leadership appointment

While core leadership abilities remain the same, a changing world demands additional skillsets. We work with clients to ensure leadership appointments match the skills criteria of their specific leadership role and their organisation’s unique dynamics.

For a breakdown of the leadership hiring market in Ireland, including leadership skill gaps and board requirements for new leaders, we have provided this complete overview.

To discuss the leadership market or for help with your leadership appointment and succession planning, get in touch: mark.odonnell@odgersberndtson.com.