Hiring for potential improves workforce performance
In fast-changing industries, relying on traditional hiring methods is a slow way to lose. Hiring people just because they tick every skill box today doesn’t prepare you for what you’ll need tomorrow. That’s why hiring based on potential, what Gartner calls “promise”, is gaining traction. A candidate with the right mindset and ability to learn will outperform a checkbox hire once the landscape shifts. And it always does.
Think about it: you’re moving into new markets, adopting new tech, dealing with new regulations. Relying only on talent that’s perfectly skilled for the present is already a liability. According to a March 2024 study by Gartner, candidates selected for their promise are 1.9 times more likely to perform effectively than those hired purely for existing proficiency.
Gartner defines “promise” as the combination of a minimum skill foundation and the willingness plus capability to learn what’s next. This attracts people who are adaptive by nature, and who don’t freeze when things evolve fast. It also allows the company to build skills internally instead of paying a premium for hard-to-find talent. The result is a workforce that grows with your business needs, not against them.
Meaghan Kelly, Director at Gartner’s HR practice, put it simply. “Many organizations are transforming their capabilities so rapidly that they can’t acquire all the skills they need , the talent either doesn’t exist or is too expensive.” That’s the situation. The solution is shifting your hiring lens from what someone knows now to what they can become.
Potential-based hiring also reshapes how people engage with your company. Employees feel trusted. That drives performance and loyalty. It also builds a culture of learning. When you scale this mindset, you eliminate them and stay ahead of your competition.
For execs leading high-growth or constantly evolving businesses, the model is clear: hire for growth, not fit. You don’t need to predict the future if your people are ready to build it.
Internal hiring practices often limit talent mobility
There’s a disconnect inside many companies. Leadership talks about agility and adaptability, but internal hiring still works in slow motion. Managers want candidates who already check every box, every skill, every requirement. That’s a bottleneck. It reduces the pool of internal talent to nearly nothing and blocks people with high potential from advancing. It’s not a system built for speed or resilience. It’s risk-averse, and that slows everything down.
Gartner data confirms this. Over half of managers, 51%, still ask recruiters to focus only on people who perfectly match all listed skills when hiring from within. These are employees already in the system, often with a good track record. But if they’re missing one skill, they’re overlooked. That’s inefficient.
If your business is growing or evolving, this approach will fail you. Talent needs to move fast to meet demand. Holding positions open while waiting for someone with a full skillset is an operational drag. In prioritizing completed skill lists over potential, companies miss out on fast learners, adaptive thinkers, and rising contributors already embedded in the organization.
This mindset also affects your hiring culture. When employees see there’s no pathway unless they’re already fully formed, motivation and loyalty drop. On the other hand, when internal mobility is based on potential, people stretch themselves, build new capabilities, and stay longer. That compounds value across your business.
Top leaders need to shift expectations. Stop insisting on resumes that fit a legacy checklist. Start working with your HR and talent teams to define realistic, growth-oriented criteria. Train hiring managers to recognize potential, instead of gaps. If you don’t, you risk stagnation while your competitors evolve.
Hiring from within should serve your strategic goals. If the internal pipeline is blocked by policy, the problem is the process.
Existing talent systems are outpaced by evolving skill demands
Most companies still run HR like it’s 2010. Technology, markets, customer behavior, that’s all moving fast. But workforce systems? Still slow. Talent structures and development models weren’t built for this pace. The result? A mismatch between the skills your business needs and what your people are equipped to deliver. It’s a growing issue most leaders are underestimating.
Gartner surveyed 190 HR leaders. 48% admitted the demand for new skills is moving faster than their current processes can support. That’s almost half of enterprise talent leaders saying the system no longer fits the rate of change. Meanwhile, only 28% of 3,200 employees surveyed say their employer even prioritizes developing internal potential. That gap matters. It means most people don’t see a reason to grow inside the company, and most leaders don’t know how to fix it.
Organizations are shifting to data-driven, digital-first models. That calls for new skills: systems thinking, flexible problem-solving, tech fluency. These can’t always be bought off the shelf. Skills scarcity is real, and so is the premium you’ll pay trying to acquire it the old-fashioned way. If you’re not actively identifying and accelerating internal learning, you’re already falling behind.
This is bigger than HR. It’s operational risk. If your workforce can’t keep up, you miss growth opportunities. You delay product timelines. You burn out high performers. At scale, you will hit real constraints on execution. Closing that skills gap requires a mindset shift at the top—moving from hiring proficiency to developing promise. Senior leadership must align vision, resources, and velocity.
If you want to compete, don’t let your workforce strategy trail your business model. Build talent systems that move at the speed you need now, not the speed you needed years ago.
Structured support networks amplify skill development for promise-based hires
Hiring people for potential only works if your organization knows how to support them. You can’t expect managers to carry the full load. Most of them are already stretched thin. The idea that individual coaching alone will scale is outdated and inefficient. What works now is shared responsibility, building support networks that involve learning and development teams, talent management, subject matter experts, and the employee’s own manager.
Gartner’s research shows that using a skill-building network instead of a 1-on-1 support model can double the impact on skills preparedness. The approach is systemized, cross-functional, and scalable. It creates momentum by distributing accountability, giving the employee access to more points of expertise and feedback, not just managerial opinion.
The faster your business evolves, the more relevant this becomes. When you’re asking someone to grow into a role they weren’t initially hired for, they can’t do it in isolation. Without structured reinforcement, most people won’t hit their potential. But with the right setup, they get up to speed faster, and what they learn sticks.
For executives, the benefit is speed and resilience. You reduce your dependency on external hiring and shrink the time-to-productivity for internal moves. You also insulate the company from leadership turnover. If a manager leaves, the rest of the network still supports the employee’s development.
This model needs buy-in from multiple departments. Leadership has to treat capability-building as a core business function, not an optional add-on. Disconnected development leads to misalignment. A networked approach keeps growth integrated with real-time business needs. If you’re serious about building for the future, this is the infrastructure to make it real.
Unaddressed skills gaps diminish productivity
Skills gaps are expensive. When your teams don’t have the capabilities they need, output slows, decisions stall, and execution quality drops. There’s measurable business loss when people aren’t properly equipped to perform tasks that are now central to most operations, especially in areas like data analysis, automation, and forecasting.
A recent report from Multiverse estimates that gaps in key digital and analytical skills cost employers up to one month of productivity per year. That’s a full month lost, per employee, on average. And the cost grows fast when you multiply that across teams, departments, and global operations. It’s a silent drain that shows up in late deliverables, missed opportunities, and operational gaps, but isn’t always immediately flagged on a dashboard.
Every serious business is becoming more tech-driven. That shift brings complexity, but also enormous opportunity, if your people are ready. The problem is, most development programs aren’t designed for speed or business alignment. Companies either wait too long to train, or push skills-building initiatives without structure or relevance. Both approaches fail.
The fix is speed, precision, and accountability. You train with intent, focusing on in-demand capabilities that directly support business goals. You track outcomes. You don’t overinvest in tools employees aren’t using. If the skill delivers performance, you scale it. If not, you phase it out. This is how you close the gap and get back the productivity margin you’re losing.
Executive teams need to own this challenge directly. When your workforce doesn’t have the right skills, the business underperforms, regardless of strategy. Talent readiness needs to be treated with the same urgency and intensity as revenue or product deadlines. That’s what high-performing companies already understand.
A strategic vision, empowered leadership, and adequate budgeting are vital
Transitioning to a skills-first hiring model isn’t just a matter of changing job descriptions. It requires a shift in how leadership thinks, how budgets are allocated, and how success is measured. Without executive-level commitment, the model doesn’t scale. It stays stuck in pilot mode, good in theory, weak in execution.
Skills-first hiring focuses on what people can do, not where they went to school or what title they held before. That means companies must define the real capabilities needed for roles and build systems to find, develop, and deploy talent around that. But creating that kind of system requires clarity from senior leadership. It needs a clear strategic vision, backed by infrastructure and funding to execute at scale.
Cisco shows what this looks like when it’s done right. According to a case study by OneTen, Cisco adopted the skills-first model to expand its talent pipeline. As a result, they saw a 96% retention rate among hires made through this approach. That kind of retention doesn’t happen by accident. It reflects clear alignment between the company’s hiring strategy, culture, and long-term goals.
When businesses shift toward hiring for skills and promise, it opens access to previously overlooked talent. It also helps move faster against talent shortages, strengthens inclusion, and fills roles without the inflated costs tied to credential-based hiring. But you don’t get those outcomes by running isolated programs. The entire org, from talent acquisition to L&D to business unit leadership, has to operate from the same playbook.
For C-suite leaders, the message is simple: treat your hiring framework as a strategic asset. Invest in it with the same discipline you bring to product or revenue growth. When done right, skills-first hiring solves workforce gaps and it shapes a stronger, more future-ready company.
Key takeaways for leaders
- Hire for potential, not just proficiency: Candidates hired based on willingness and ability to learn (promise) are 1.9x more likely to perform effectively. Leaders should prioritize potential to future-proof talent against fast-changing demands.
- Unblock internal mobility by rethinking rigid requirements: 51% of managers only consider internal hires who meet all listed skills, shrinking the talent pool. Executives should push for flexibility in internal hiring to accelerate growth and reduce hiring friction.
- Align talent systems with the pace of business change: 48% of HR leaders say current systems can’t keep up with evolving skill needs, while only 28% of employees see their company investing in potential. Leaders must modernize talent processes to stay competitive.
- Scale skills development through collaborative networks: Skills-based learning networks—bringing together managers, L&D, and SMEs—double the impact on employee preparedness compared to 1-on-1 support. Decision-makers should shift from isolated coaching to structured, cross-functional upskilling.
- Address skills gaps to reclaim lost productivity: Unfilled or misaligned roles cost companies up to a month of productivity per year, especially in data and automation. Leaders must prioritize targeted training and agile hiring strategies to reduce operational drag.
- Back skills-first hiring with strategy, leadership, and funding: Cisco saw a 96% retention rate among skills-first hires by aligning hiring with long-term vision and budget. Executives should treat hiring infrastructure as a core strategic asset, not a tactical fix.
