Businesses Risk Reputational Damage Without The Right People on Top, CIPD Warns

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A recent report published by the CIPD has shown that businesses are at risk of reputational damage through people-related incidents if they are not equipped with leaders with the skills to navigate them. With an increased focus on diversity, equity and inclusion (DEI) to retain talent, companies should incorporate individuals with HR experience at the board level as people and HR skills and knowledge are now relevant. 

Further, the ongoing skills shortage issue in the UK will need leaders with expertise in talent and recruiting. By equipping top management positions with HR skills and experiences, companies will have a better chance at navigating people-related issues, increasing retention and attracting new talent. Additionally, skills-based hiring is also mentioned as a necessary method to be used in recruiting for all roles – including leadership jobs. 

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The Importance of People Expertise

Within the report, they mentioned that the limiting factor for business strategies is no longer finances, but people. Business leaders have expressed that out of all the challenges they are facing, most of them are related to people management. This includes efforts to close skills gaps, hybrid working, DEI and mental health. 

The report further illustrates various instances where HR expertise has been needed to navigate various recent challenges. They noted that incidents and challenges such as bullying and sexual harassment, pay and reward issues, incentive misalignment and skills development have all required individuals with HR expertise to address them. 

Further, they recognise that the nature of work is changing. The pandemic brought a shift in perspective for most workers, who now prioritise work-life balance more than before. This is shown by the prevalence of alternative working styles, such as remote and hybrid working or working from anywhere (WFA). 

Investors are also increasingly interested in people management and the working conditions of businesses. The company leaders that spoke with the CIPD admit that investors have been more vocal about their interests in company culture, DEI and employee engagement. 

Ultimately, however, there is still often a mismatch in the skills needed and the individuals filling the role – including that of board members. The report underlined the need for people management expertise for business leaders, as the challenges forecasted will continue to shift in the direction of people-related issues. Thus, skills-based hiring is seen as the ideal step towards strategising businesses for the coming issues. 

Skills Based Hiring

As mentioned by Morgan McKinley, hiring managers are under tremendous pressure to fill unfilled positions due to the widespread shortage of talent in many industries throughout the world. However, they frequently discover themselves swamped with applications from people who don’t fit the standards of the job description. The implementation of skills-based hiring could be a viable answer to this problem.

Skills-based hiring has been a significant trend in the recruitment scene in recent years. Instead of focusing exclusively on education or credentials, traditional recruitment strategies are making way for creative methods designed to attract the right personnel with the requisite skills.

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The overall performance of businesses that made the switch to skills-based hiring has significantly improved. Additionally, they are benefiting in other crucial areas, such as the development of more varied talent pools, improved retention rates, and a quicker filling of formerly challenging posts. Meeting the demands of the changing employment market is proven to be quite effective thanks to this paradigm shift.

The recent report by the CIPD highlights the critical importance of people expertise in businesses. The challenges faced by organizations are increasingly centred around people-related issues, including diversity, equity, inclusion, skills gaps, and mental health. To navigate these challenges and protect their reputation, companies must equip their leaders with HR skills and experiences. The ongoing skills shortage in the UK further emphasizes the need for talent and recruiting expertise at the top management level. Implementing skills-based hiring not only addresses the talent shortage but also leads to improved performance and diverse talent pools, positioning businesses to thrive in the evolving job market.


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