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4 Steps To Building A Skills-First Organization

HR functions today are being asked to do more with the same people that they have, or even do more with less. With economic pressures making it essential that companies have the right person in every role, and talent retention becoming a strategic priority, there’s never been a more crucial time to embrace a skills-first approach.

Now is the time to focus on skills, at all stages of the talent lifecycle. Whether your challenges are around hiring, employee engagement, retention, filling skills gaps or getting more productivity from your teams, looking at talent through the lens of skills is the crucial first step.

Opportunities will outstrip talent capacity for the next several years, if not decades. So how do you get the work done? Moreover, talent practitioners are no longer just competing against other businesses, but also the changing expectations of candidates themselves. To keep up, they need to alter the way they think about talent, and do so drastically.

Companies have hard choices to make relating to the workforce, and a skills-first approach can help you make better decisions, faster. Skills data should power everything: from tactical redeployment to strategic workforce planning.

So how do you become a skills-first organization?

1. Deconstruct the job: consider the work to be done

Companies must figure out exactly what work needs to be done, and deconstruct ‘jobs’ in favor of identifying what skills are needed to do the work. Forrester refers to ‘unbundling the job’: a more adaptive model to work, where silos and hierarchies are broken down and companies can be more agile around who does what.

In other words: can you decouple work from the job? This may include turning elements into projects, gigs or tasks, and focusing people on the problem to be solved or ideal outcome. This leads to people being defined as more than just a job title, and also means businesses can fluidly deploy the right talent to the work needed to meet business goals.

One important aspect to this is automation. As AI evolves and can take on more of the tasks traditionally done by humans, jobs are being disaggregated anyway: broken into component tasks so that the ones that can be done by a machine are automated. But could this be done on an ongoing basis? Since technology is evolving at pace?

Job titles could also be broadened to accommodate the notion that the ‘work to be done’ is ever-changing and evolving, so the work of today might not look the same as the work of tomorrow. When skills are at the center, work can be organized flexibly around applying those skills to achieve outcomes or solve problems.

85% of HR executives say they are planning or considering redesigning the way work is organized so that skills can be flexibly ported across work over the next three years. – Deloitte

2. Understand skills: Get to grips with data

Of course, to become a skills-first company, you need to be able to see the capabilities you actually have today, and where your workforce can develop. The total talent view that you need – and are probably lacking.

Just 10% of HR executives say they effectively classify and organize skills into a skills taxonomy or framework… although 85% have some efforts underway.

How do you go about understanding the skills that exist in your organization already? And how do you keep that up to date as people learn new things, take on new challenges, and upskill or reskill on the job?

How do we know that one version of a skill – let’s say “product management” – is the same each time, in each system? (Does it mean the same in your business/industry as in another?) How do we define which skills/capabilities mean something from a perspective of seniority or progression? How do we even define what falls into the bucket of “skills” (versus something else)? The skills taxonomy needs to be clear, dynamic and interoperable with other systems and platforms.

“You need to make skill… the new currency, and you need the culture of skill. You need to reward my skill, appreciate my skill, you need to grow my skill. So looking at the skill level is critical. And to embed a framework of skill management is not simple. I think that before we are dealing with all this complete marketplace, you need a very strong skill management framework.” – Asaf Jackoby, Senior Vice President of Global HR at Amdocs

AI can help you ensure skills are commonly defined and automatically connected between HR systems, without the baggage of maintenance and manual mapping. Companies that invest in the right technology can dynamically keep skills data up to date and usable. A Universal Skills Platform offers interoperability: it lets you connect what you mean by a ‘job’ (in a skills-centric way, rather than just a description) and the right profile (in a skills-centric way) and create a better connective tissue when it comes to hiring, assessment, development, and progression.

3. Bring it together: Apply AI to find skills matches

Smart, explainable AI can take the information about people’s skills and use that to match them to suitable roles, or recommend learning & development opportunities. It’s not just about combing CVs for words that match a job spec: AI can take it a step further and infer what skills a person may have but not have listed; work out what skills they could potentially develop; and truly understand the seniority and proficiency of an individual.

This may be applied within the candidate journey, to offer them personalized job alerts and recommendations – allowing candidates to source themselves for open roles. And this same level of personalization can also be applied within the employee experience: an AI-powered Talent Marketplace can display current available opportunities (full time roles, short-term projects or gigs) to existing employees – showing them potential career paths they could pursue within the organization.

With a Talent Marketplace powered by AI, it becomes much easier to understand the skills gaps you have internally. When you have full knowledge of the gaps that exist, you can more easily create plans to develop those missing skills – empowering L&D teams with the necessary insights to plug skills gaps.

An intelligent Talent Marketplace gives employers the ability to enhance the candidate experience by providing personalized job recommendations based on skills. It also improves the employee experience by building individualized career paths that encourage learning and development – keeping talent engaged long-term.

4. Embrace change: encourage a new mindset

While good data, smart data management and explainable, user-friendly AI is incredibly important to bring a skills-first approach to life, organizations going down this route will also need to grapple with a new way of thinking. Changing how the work is viewed, and how the workforce is viewed, is a huge change management project. For HR, there is a completely new approach (and tools) to get to grips with, but even beyond that, people need to think differently.

As Helen Tupper and Sarah Ellis say in Harvard Business Review, “Managers who optimize for individual performance are likely to become more territorial about their talent. By keeping the “best” people on their team, they achieve the best outcomes. However, this is often to the detriment of individuals’ career development and the organization’s ability to access its own talent. The unfortunate outcome is that the people managers most want to retain feel constrained and become more likely to leave, risking the performance metrics they were so keen to protect in the first place.” Does talent belong to the organization or the hiring manager, in your business?

With a skills-based approach, the roles of managers and leaders evolve from managing employees to orchestrating work and skills through projects, tasks, gigs, or problems to be solved. Influence and empowerment of others takes on more importance than power or organizational hierarchy. Managers need to be able to get comfortable with sharing talent across teams for the greater good of the business, rather than hoarding it.

“One of the biggest problems I’ve seen is that we ask for a lot of skills and requirements during our job descriptions and the process of recruiting. And then we place people in roles that they use 30% of their skills… If you spend 20 years in banking, probably I would count the last three, because things have changed so much.” – Wagner Denuzzo, Head of Capabilities for Future of Work at Prudential Financial

Read more about becoming a skills-first organization.