Why hiring for skills, talent, and character delivers a competitive advantage

    By Lizzie Allen

High staff turnover rates in the technology sector cost Australian businesses millions of dollars each year. According to the Australian HR Institute, the cost of employee turnover may equal up to 150 per cent of an individual’s yearly salary when both direct and indirect costs are considered.It’s a growing problem, with statistics from the Australian Bureau of Statistics reporting that business turnover in professional, scientific, and technical services rose by 8.5 per cent between January 2023 and January 2024.

One of the reasons behind high turnover rates is specific to the technology sector: people are hired for technical skills but leave once the project or piece of work they were hired for is complete. It’s unsustainable and disruptive to growth and culture, particularly when the same people are often rehired for another project.  

The solution lies in hiring for skills, talent, and character. According to Deloitte, organisations that strongly invest in a skills-based approach are 107 per cent more likely to place talent effectively and 98 per cent more likely to retain high performers, and gain a reputation as a great place to grow and develop.

There are multiple benefits to skills-based and character-based hiring. For example, employing individuals with a diverse range of skills lets them leverage their unique abilities across various projects. This diversity ensures that a team can tackle a broad spectrum of challenges and promotes a dynamic and flexible work environment. A workforce capable of transitioning between projects without a steep learning curve is invaluable, especially when responding to market changes or shifting project priorities. Ignoring this approach can leave a company with a uniform skill set, making it difficult to innovate or adapt to new situations, potentially stunting the business’s growth and its ability to compete.

Human capability skills such as adaptability and continuous learning are increasingly recognised as equally important as technical skills, particularly in the tech industry where change is the only constant. Employees proficient in acquiring new skills and able to pivot as necessary are a valuable asset. They ensure that a company remains at the cutting-edge, as they can seamlessly transition between projects and roles, facilitating an agile and responsive organisation. Overlooking the value of human skills can result in a workforce that is technically competent but unable to evolve or collaborate effectively.

Encouraging employees to work across different projects has the added benefit of skills-sharing, which can exponentially increase the knowledge base of an organisation. When employees share their expertise, it leads to a more educated and versatile team, driving innovation and efficiency. This cross-pollination of skills can create a competitive advantage as it accelerates learning and problem-solving within the team. Failing to promote this interchange can isolate employees in silos, diminishing the potential for growth and collaboration, and ultimately affecting the business’s adaptability and problem-solving capabilities.

Hiring for inherent talent—particularly talents that align with innovation and resilience—can lead to the development of more robust and creative tech teams. Talented individuals often bring a unique perspective that can inspire innovative solutions to complex problems. If companies focus solely on experience or credentials rather than potential and innate ability, they will miss out on employees whose mindset, character, and potential could drive the company forward in unexpected and groundbreaking ways.

Four strategies for talent retention and career development 

1. Create a comprehensive map of the company’s overall talent bench strength. Answer questions like: What talent do we have now? What untapped potential do we have in our people? Then devise a plan that focuses on hiring for the skills and traits you are missing, and the individuals who will bring long-term value to the organisation.
2. Build a culture of career development and mobility where leaders and their teams are equipped to have meaningful career conversations, based on genuine talent data.
3. Be intentional in integrating skill diversity and the cultivation of talent and character into the very fabric of the business’s culture, ensuring a holistic approach to employee development.
4. Build capability in your Talent Acquisition team (or partner with a specialised recruiter) so they can better identify candidates with a well-rounded set of skills that contribute to long-term success, not just immediate project needs.
5. Formulate a change management strategy that facilitates the transition towards strategic recruitment and internal mobility based on a balance of skills and character, rather than a narrow focus on project-specific abilities.

How Right Management can help

Attracting external talent is difficult, time-consuming, and costly to organisations. We offer structured programs that help people define career goals and develop skills to have career conversations combined with tactical pathways for internal mobility to help ensure that great talent stays with your organisation. We offer a range of talent assessments and approaches to help you understand your bench strength and your gaps, in line with what your organisation needs now, as well as in the future.

During organisational change—which is an ongoing journey— Right Management’s programs also ensure that you don’t leave success to chance. Instead, we help your employees to thrive in the new environment by supporting them before, during, and after a change. 

As a Talent Solutions and Manpower Group company, our full service offering also includes recruitment solutions. Working together, we help our clients find, retain, and engage top talent.

To find out how we can help your organisation find and keep good talent, contact us today.