Should You Hire for Leadership Experience or Leadership Skills?

For Canadian businesses looking for their next generation of leaders, finding candidates with the ideal sets of skills is more challenging than ever. In fact, according to a recent Lee Hecht Harrison executive survey, 34% of Canadian executives said one of the top challenges facing their organizations’ senior leadership teams was their inability to navigate current workforce challenges, such as digital transformation. Additionally, according to a report from Deloitte Canada, 74% of business leaders say it’s a challenge to hire employees with the skills their organizations need.

Compounding this skills shortage is the increase in competition for Canadian talent from all corners of the globe. With the rise of remote work, foreign companies are actively enticing top Canadian professionals with remote/flexible working arrangements, attractive compensation packages, and the promise of career development opportunities.

Considering the skills shortage, you should hire for experience, right?

Not so fast. There are reasons for optimism that a solution to the talent shortage is closer than we think. According to StatCan, Canada ranks first in the G7 with 57.5% of its working-age people holding at least college or university credentials, making it one of the world’s most highly educated workforces. What’s more, when it comes to tech skills, the number of Canadian professionals holding computer and information science degrees increased 46.3% from 2016 to 2021.

Statistics like these show Canada does, in fact, have an abundance of talent. However, it’s incumbent upon businesses to engage, recruit, and coach this talent into future business leaders with meaningful growth opportunities. Creating a pipeline with an integrated training and leadership development program and demonstrating a clear pathway to leadership roles can put organizations in a better position to encourage loyalty, reduce turnover, and preserve institutional knowledge among current and future leaders.

Actually, Canada may be facing more of an experience shortage

Certainly, to fill a leadership role, it is valuable to look for candidates with a proven track record of navigating the real-world business challenges you’re trying to solve.

The right experienced leaders bring a broader, more refined perspective on long-term strategy, team management, and problem-solving. They frequently have well-cultivated relationships with other industry leaders. Through their years of professional experience, they’ve honed their abilities to effectively lead others and create a sense of stability for the organization.

The challenge is that the Baby Boomer generation (born between 1945 and 1964) is one of Canada’s largest. By 2030, the last “Boomers” born in 1965, will turn 65 and prepare to leave the workforce, taking years of valuable experience with them. In fact, the country is already feeling the impact–according to StatCan, in 2021, 2022 and 2023, the labour force participation rate was at its lowest level in two decades, 65%.

The solution: a skills-based hiring approach

With this experience exodus at hand, organizations seeking their next generation of leaders must take a skills-based hiring approach and look for talent with leadership development potential. Benefits of this approach include:

• Recruiting future leaders with the technical and soft skills to tackle rapidly evolving challenges, allows organizations to gain immediate value while also focusing on their future needs.
• Leadership candidates hired or promoted for their skills tend to be more adaptable and willing to continue learning, making them more agile in dynamic work environments.
• Hiring or promoting with the intention of upskilling broadens talent pools and offers advancement opportunities to individuals from diverse backgrounds, experiences, and perspectives.

This last point is critical. Diversifying your succession planning and talent acquisition approach opens your organization up to emerging talent and unique skill sets that may have previously gone unnoticed.

In turn, it increases the potential for finding more creative and innovative problem solvers and decision makers. After all, diversity means more than different races, ethnicities, nationalities, genders, sexual orientations, generations, and physical and cognitive abilities. It also means diversity in hard and soft skills, as well various points of view, backgrounds, and experiences.

Ideally, companies find a balance between relevant experience and essential skills when developing the success profiles of their next-gen leaders. Certainly, there is no one-size-fits-all solution. Older, more experienced workers may want to put off retirement and help an organization bridge the gap from one leadership team to the next. There are other such scenarios where experience can and perhaps should be prioritized. However, hiring for skills—especially a combination of relevant technical and soft skills—may result in a stronger, more well-rounded leadership team.

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