Picture a future where employees don’t have to scour clunky intranets for development and career growth. Instead, recruiters and managers proactively pitch internal opportunities based on unique skills and capabilities, not someone’s title, tenure or quality of network. This same platform equips leaders with AI-powered tools to more precisely upskill, develop, retain and advance their workforce.
The future is already here, as experiences like this are starting to become a reality in the business world. There is a significant shift happening in how top companies understand and develop their talent, and it is being accelerated by a skills-driven approach.
This shift is unlocking new opportunities for organizations to navigate complex business challenges and advance their employees’ careers. But realizing those outcomes means leaders must embrace the shift rather than fear it.
Why a skills-driven approach is so important
The approach companies take to developing and harnessing employees’ unique capabilities and potential is arguably the most significant factor shaping the future of work. Perhaps that’s why 82 percent of them have identified skills as a top focus area in 2024 — recognizing their ability to be agile and innovative depends on skills. Organizations that continuously commit to upskilling their employees successfully navigate these huge economic shifts and thrive where persistent talent shortages are the norm.
Skills refer to the knowledge and ability required to perform a task or excel in a particular area. These skills can be categorized into technical, functional and power skills. Skills-driven organizations value skills as the currency over degrees, prior roles or titles when hiring, developing and advancing talent. A study by the consulting firm Deloitte validates this approach in several ways:
- Talent accessibility: Focusing on skills rather than pedigree broadens the talent pool. It allows companies to consider candidates who have the requisite skills to excel, but perhaps not the formal degrees or experience to get past traditional screeners. According to the Deloitte study, skills-driven organizations are 107 percent more likely to place talent effectively and equitably.
- Agility and innovation: Organizations that fit the right skills to roles which solve emerging business needs are better able to adapt quickly to market changes while broadly inspiring more innovative cultures. Those businesses are 52 percent more likely to innovate and 57 percent more likely to anticipate and respond to change successfully.
- Employee engagement and retention: Employees are more satisfied, engaged and likely to stay with companies that assist in developing skills to achieve both business goals and career growth opportunities. Such organizations are 98 percent more likely to be recognized as excellent places for personal and professional development.
Leveraging technology and AI
The opening scenario highlighted how skills helped a business proactively pinpoint employees ready for new career and development opportunities. This scenario relies on technology and AI to make that happen. When considering what kind of technology platforms are needed to build a successful skills-driven organization, target ones that help you know, grow and connect your talent.
- Know your talent: AI tools can help create comprehensive skills inventories that can be used to develop and mobilize workforces more effectively. These inventories can help organizations identify skill gaps and needs while surfacing prospective and current employees who can address them.
- Grow your talent: You can unlock employees’ full potential by offering personalized learning journeys, aligned with both their career goals and the organization’s needs. This tailored approach equips employees to succeed in their current roles while learning skills they’ll likely need in the future. AI-powered tools can recommend development opportunities for individuals based on their unique attributes, continuously and in real-time.
- Connect your talent: Gone are the days of wading through stacks of resumes and performance reviews to find the best employees for a project. AI tools can help organizations match the right talent with the right opportunity—but it can even go a step further. It can help consider employees’ transferable or adjacent skills for projects or roles that both fit their capabilities and career aspirations, unlocking opportunities they might have never otherwise considered or pursued.
A note of caution – a plethora of nirvana-promising, AI-powered talent intelligence software crowds this emerging space. Fall in love with chasing the business problem you’re trying to solve, not the technology. Invest the upfront time to define your business outcomes, understand the maturity level of your existing job architecture, people data ecosystem, tech stack, as well as organizational and cultural readiness.
Throw out the old playbook and start thinking differently
The seismic shift from job-based work to skills-based work requires companies to redesign how they use skills to make decisions. It requires strategic planning, execution and a bit of humility and courage to recognize when you need to change course. Check out these 13 company use cases who are leaning into the skills revolution.
Here are five tips for how to embrace new ways of thinking to succeed in this new world.
- Develop a skills framework: Define a clear vision and skills critical to your organization’s success. The framework should embed skills as a core data element across the entire talent lifecycle.
See example of skills framework below.
- Invest in the right technology: Don’t be fooled by shiny objects. Be discerning and intentional when selecting the AI and analytics tools to support your business objectives, skills inventory, learning and development initiatives and talent-matching processes. Develop a method to monitor bias in the tools and adopt a flexible mindset so you can navigate and respond to new technology and business innovations.
- Adapt skills-based hiring and career development processes: Focus on skills and capabilities over degrees and titles. Career development and promotion criteria should aim to foster a more diverse and inclusive workforce. That can be achieved by empowering everyone to focus on building the most important skills that will support their careers and the organization’s goals.
- Cultivate a learning culture: Encourage continuous upskilling by providing easy access to personalized learning resources. Then give folks time to learn and recognize those taking that time to develop and apply new skills. Leadership must be net exporters of talent and demonstrate a commitment to growth and mobility, even if it’s outside of their team. It means a commitment to develop more internal talent and early career rather than hiring experienced people in the role on day one.
- It’s a marathon, not a sprint: Walk, jog, then run. Just remember—it’s is a multi-year journey. Think pragmatically. Start with a solid source of truth for skills data, then test and learn with use cases. Communicate the business value of a skills-driven approach starting with senior executives, recruiters, hiring managers and people leaders. And finally, help people feel excited to engage with their development and learning, before introducing skills proficiencies, internal talent marketplace and gigs.
The pace of technology-driven change isn’t stopping anytime soon. In fact, it will only accelerate from here. Organizations that cling to “the old way” of doing things, especially when it comes to attracting and retaining talent, will be left behind. As business and talent management needs evolve in ways we can’t yet conceive, the best way forward is through skills readiness and adaptability.