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Update: Hiring for Skills

Articles The Institute of Internal Auditors Feb 06, 2023

Talent risk is poised to dominate the 2023 business landscape. According to Executive Perspectives on Top Risks for 2023 and 2032, a joint survey by Protiviti and North Carolina State University, 64% of company executives say the inability to attract and retain top talent is limiting their ability to achieve operational targets.

In response, many large private sector companies, including Boeing, Walmart, and IBM, have pledged to implement skills-based practices. They have removed degree requirements from certain job postings and adopted in-house training strategies such as workshops and one-on-one coaching sessions, according to a recent article from McKinsey & Co.

The public sector has adopted similar initiatives. The state of Maryland announced it would no longer require degrees for nearly half of its positions, opening thousands of jobs in health care, corrections, policing, skilled trades, and engineering to more applicants. Last year, U.S. President Joe Biden cited his support for the movement in his State of the Union address, and a few months later his administration issued new guidance emphasizing skills-based hiring within the federal government. 

These initiatives, advocates claim, have several benefits that can help create a more resilient workforce. According to McKinsey, hiring for skills is five times more predictive of job performance than hiring for education and more than two times more predictive than hiring for work experience. Additionally, workers without degrees also tend to stay in their jobs 34% longer than workers with degrees.


of executives have implemented a cross-functional working group to drive strategic attention to ESG. 42% are taking steps to do the same.

Source: Deloitte Sustainability Action Report: Survey Findings on ESG Disclosure and Preparedness, December 2022

Such a fundamental change in philosophy comes with risks. In McKinsey’s 2021 State of Hiring Survey of U.S. employers, 48% say validating skills, competencies, and references is one of the top three challenges in adopting a skills-based hiring approach. Sourcing job seekers with the right skills and getting them to apply is the second highest-rated challenge (46%), followed by assessing worker effectiveness and success (39%). 

Clearly, the hiring landscape — and how employers react to it — is changing radically, and internal audit will need to observe it closely.
Logan Wamsley

A Critical Role

A B20 task force recognizes internal audit’s contribution to strengthening governance.

A recent Business 20 Integrity and Compliance Task Force paper includes recommendations to create a global framework for compliance and integrity as the foundation for sound business growth. Internal audit’s critical role is highlighted in each of the recommendations.

The paper, delivered to the Group of 20 during a summit in Indonesia late last year, makes four recommendations:

  1. Promote sustainable governance in business to support ESG initiatives.
  2. Foster collective action to alleviate integrity risks.
  3. Foster agility in countermeasures to combat money laundering/terrorist financing risks.
  4. Strengthen governance to mitigate exacerbated cybercrime risks.

“Ultimately, business integrity enables successful organizations to stay true to their missions, keep their promises, respect laws and ethical norms, foster public trust, and increase resilience in times of crisis,” writes the task force chair, Haryanto Budiman. “In turn, this allows them to build capital, both financial and reputational.”

In the first recommendation, the B20 says internal audit should play a significant role in an organization’s ESG journey. It says internal audit can serve in an advisory capacity to help establish an ESG control environment and offer assurance on risk assessments.

Regarding cybersecurity, the B20 recommends organizations enhance policies to better meet current business needs. “The effort may include strengthening the role of internal audit to actively provide assurance over management’s ability to identify and manage risks and respond against cyberattack incidents,” the paper states.

According to IIA President and CEO Anthony Pugliese, “The B20’s recommendations underscore the opportunities for the internal audit function to add value to their organizations by establishing effective controls and governance over emerging issues that are critical to businesses globally.”
Trinity Curbelo


of audit committee chairs plan to step down in the next 1 to 3 years.


of boards prepare for the chair’s planned departure 2 years in advance.

“The best governance models are seamless and well-planned and not driven by crisis or vacancies that are unanticipated.”

— Tom O’Neil, director at Compass Holdings and fund director at
Brown Advisory Funds


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Ask an Expert

Making Good on Climate Goals


2023 02 Digital-Update-Expert.jpgWhat Organizations are making progress on their pledges to cut carbon emissions?

More than 50 electric utilities have committed to setting or have set a science-based emission reduction target, including Europe’s Enel, Iberdrola, and Ørsted; NRG Energy in the U.S.; and The Tata Power Company in India. Automakers are announcing bold plans to phase out the internal combustion engine in the 2030s, including Mercedes Benz Group, Volvo Cars, Ford, and General Motors. Nestlé has committed to investing $1.3 billion by 2025 to spark regenerative agriculture across its supply chain, with the goal that 50% of its key ingredients will be sourced through these methods by 2030.


5 WAYS Remote Meetings Have Changed Since the Pandemic

  1. Meetings are 60% more frequent.
  2. Meetings are 25% shorter.
  3. Meetings are 50% smaller.
  4. More meetings are spontaneous (66% of one-on-ones).
  5. Workers who left after the study period had reverse frequency trends.


What steps can companies take now to decarbonize?
It’s useful to consider the 4A’s of climate leadership. Ambition means ensuring the company has science- based targets, including five- to 10-year targets for deep, rapid emission cuts across its value chains.

Companies should prioritize the most impactful Actions in a climate transition action plan — a checklist of how to reduce emissions across the company and value chain, integrate climate goals into business strategy and governance, and ensure a just transition.

Advocacy is key. Lobbying goals should be aligned with climate ambitions. Companies should review trade group memberships and engage in dialogue if positions are misaligned.

Finally, Accountability. Disclosing environmental impact helps companies get ahead of regulations and respond to market demand. Financial regulatory developments in the U.S., EU, and U.K. ask companies to report emissions within the next five years. Other countries will follow. To start, companies should measure emissions annually and report them through the global disclosure system, CDP.
Maria Mendiluce is CEO of the We Mean Business Coalition, Geneva

The Institute of Internal Auditors