The rise of the ‘new collar worker’: a skills-first approach to filling workforce gaps

James McLaughlin says competencies can trump a traditional degree – but some employers are still including ‘prohibitive’ qualifications in job adverts

In today’s rapidly evolving business landscape, the concept of the ‘new collar’ worker is starting to gain significant traction. A term first coined by IBM, new collar workers are digital professionals who possess the technical expertise for their role but do not hold a traditional university degree. These workers are becoming increasingly prevalent in fields like cyber security, data analytics and digital marketing, where the latest tools and techniques are rapidly evolving and specific skill sets are in high demand.

Yet, despite the demonstrable proof that many roles in these areas don’t need a university degree, organisations are still failing to remove prohibitive credential requirements from their hiring processes – leaving them struggling to find people to fill positions.

According to the UK’s 2022 Digital Strategy, the digital skills gap costs the economy an estimated £63bn in lost potential GDP, and for 76 per cent of companies, a lack of available digital talent is seen as the single biggest constraining factor to growth.

To address these issues, a fundamental shift is required – one that embraces a skills-first hiring model and moves on from assessing a candidate’s fit for a role based on the contents of their CV, instead assessing them based on their existing skills and propensity to learn new ones.

Exploring underutilised talent pools

Recognising the urgency of this shift, some organisations have already begun tapping into underutilised talent pools to meet their critical business needs – then upskilling them in new areas throughout their careers – ultimately creating their own new collar workforce.

These organisations that are willing to look beyond traditional hiring requirements benefit from access to talent from a range of different backgrounds including veterans, neurodivergent individuals, refugees, women, youth and military spouses.

In addition to diverse cognitive abilities and experiences, many of these individuals already possess the transferable skills required to flourish in underfilled tech roles.

At WithYouWithMe, we analysed two years’-worth of data from more than 2,000 UK veterans who completed psychometric and aptitude testing on our platform. This revealed 85 per cent of veterans demonstrate intermediate or above technology skills and surpass the general population in abstract reasoning – a critical skill for creative problem-solving.

In addition, one third of UK veterans were proven to excel in digital symbol coding and are therefore well-suited for careers in project management, operations and cyber incident response.

For the organisations that take a skills-first approach to hiring, aptitude insights such as these serve to replace the CV, providing a data-led way to assess candidates’ existing skills and natural propensity to succeed in new areas.

Internal upskilling: retrain to retain

With business requirements constantly shifting alongside new technologies, organisations can’t solely rely on bringing in external talent to address skills gaps.

They must also ensure they’re utilising talent that exists within their ranks, re-deploying people into high demand areas and enabling mobility across the workforce. However, true talent mobility demands a skills-first approach, as moving individuals across verticals disrupts the typical career trajectory that sees them move from university to entry-level and eventually into management in one specific area.

The increasing availability of high-quality online learning, certification programs, apprenticeships and other training opportunities makes it feasible for individuals to rapidly develop skills internally and move onto new career pathways.

Supporting individuals to learn new skills not only offers organisations a cost-effective method for addressing skills gaps, but also leads to improved employee satisfaction, engagement and retention.

LinkedIn’s recently-published Skills-First report highlighted that the employees who made internal moves within their organisation after two years had a 75 per cent chance of remaining with the company, compared to 56 per cent for those who hadn’t. Moreover, the research indicated that organisations that excel in enabling internal mobility retain employees for an average of 5.4 years, almost twice as long as organisations that do not.

Enabling mobility through a skills-first approach also offers employees equitable access to opportunity, regardless of their background, education credentials or previous job titles.

Building a future-proof workforce

The rise of the new collar worker presents a transformative opportunity for organisations to embrace a skills-first approach to finding new talent and better utilising existing workforces. By focusing on skills over traditional credentials, organisations can effectively bridge workforce gaps, tap into diverse talent pools, expand in-house capabilities and develop a more adaptable and competitive workforce.

In a world driven by constant technological advancement, embracing this paradigm shift presents not only a strategic opportunity but a necessity for organisations seeking to prepare for the future of work.

James McLaughlin is vice president, UK at WithYouWithMe