We know that many companies are looking closely at skills-based transformation: at becoming skills-first organizations, who use the language or currency of ‘skills insights’ to make better decisions around hiring, developing, redeploying and reskilling talent. 81% of our respondents in Navigating The Changing Talent Landscape agreed that skills-first hiring can better align the needs of employers and employees, making work work better for everyone.
84% said it was important that talent approaches in their organization reflect a “Focus on skills rather than traditional job roles.”
But it’s not an easy path. According to research from Deloitte, the most critical barriers to transforming to a skills-based organization are legacy mindsets and practices (46% of leaders said this) and keeping up with the changing skills needed by the business (32%).
Our own research with business leaders found that the mindset of leaders and Hiring Managers was the top obstacle to moving to a skills-first approach (54% cited this) while 44% pointed to a need for better workforce data.
Mindset: Starting the journey
For most organizations, there is still a cultural and technological shift required to get them to a place where they are fully embracing a skills-based approach to talent. In the Deloitte study, 89% of executives said skills are “becoming important” for the way their organizations are defining work, deploying talent, managing careers and valuing employees. Around 90% said they are now “actively experimenting” with skills-based approaches across a wide range of workforce practices.
But fewer than one in five organizations, according to the Deloitte study, are adopting skills-based approaches to a significant extent: that is, across the organization, and in a “clear and repeatable way”. These “early skills-based pioneers” are achieving better business results than those with jobs-based practices, and appear to be building organizational models that better align to their organizations’ needs (and the expectations of workers).
The first step is organizational alignment around the benefits of moving to a skills-first approach, which include greater agility and improved productivity.
From there, companies need to look at where they are in terms of data and technology, and take the necessary steps to advance.
Technology: What are the stages of “skills maturity”?
We worked with Talent Tech Lab to understand the four stages in the “maturity framework” as it pertains to skills technology.
- Unsuited: The organization is unable to utilize the technology for fundamental reasons, and should not proceed. Either it lacks adequate resources to invest in technology and governance infrastructure, does not have a clear business strategy with which to align a skills initiative, or does not have a job architecture with defined skills and capabilities.
- Emerging: At this stage, the organization is actively advancing towards a state that will make it suited for adoption, but is not quite ready yet. It has likely begun the preliminary work for creating a formal skills management program. Firms in this category have a desire (from the executive team down) to become more skills-based, but have not yet created a governance structure or invested the resources to make a program successful.
- Visionary: At this stage, the organization is an early adopter and has taken active steps to prepare, ensuring that the organization is ready to effectively utilize the technology for its stated purpose. The firm will have a person or team responsible and accountable for achieving objectives and has broken down the challenge into an executable action plan.
- Performing: At this stage, the technology has already been adopted and is demonstrating measurable results. The organization is using verified skill data to drive strategic business decisions and may have begun to hit some of its long-term targets. It has likely integrated Skills Tech into most areas of talent management, and the focus is on optimization and execution.
Where is your organization on the journey to a skills-first talent strategy?
Ask yourself if your business is unsuited, emerging, visionary or performing, across the dimensions below, to determine where you are on the journey.
Skills Strategy: In order to implement Skills Tech, organizations need a clear strategy for talent management that prioritizes skills as a way to measure the abilities of the workforce. Is that in a nascent state, with some idea of supply and demand? Have you carried out pilots to build out use cases? Or are you already reaching your entire workforce with a skills-based strategy?
Change Management: Implementing Skills Tech requires a considerable shift in mindset and behavior, and you need to prepare in order to be successful. Organizations must take a holistic approach to skills transformations and apply change management principles to successfully reap the benefits. Do you have a process in place? Is there a vision for change that people can rally around?
Technology Infrastructure: Some organizations might find that adopting Skills Tech or utilizing all of its features will require an infrastructure upgrade. Before adopting any new technology, it’s important to work with your vendor to ensure your backend system has the capacity to deliver the expected results. Is your tech already optimized for skills management? Are you already seeing high adoption of new technologies?
Skill Management and Governance: Even for organizations that clearly understand the business case for Skills Tech, it can be difficult to establish skills data management and system governance. Is it already clear where skills data governance should live within the organization? Do you have someone dedicated to the task of skills data management?
Organizational Alignment: A key precursor to the successful adoption of Skills Tech is a broad ranging conversation with key stakeholders that includes discussion of their needs and challenges, whether a particular solution is appropriate, and how the proposed changes will further support business objectives. Are basic goals and benchmarks understood in your organization? Perhaps you already have ‘skills’ at the heart of your organization, operating as a key differentiator?