The C-suite guide to skills-first workplaces

If people are our greatest asset, they are an asset that’s depreciating fast. With the half-life of skills standing at less than five years, your workforce could be outdated before you realise.

 

Between the disruption brought about by AI and automation, market fluctuations, the green transition, evolving societal expectations and the employer/employee relationship, there is no avoiding change in today’s workplace. Our skills are not keeping up. By 2030, there could be 85 million jobs unfilled due to a lack of workers with the right skills (leading to $8.5 trillion in unrealised annual revenues).

 

It’s causing many business leaders to think outside the box when it comes to hiring, retaining, mobilising and upskilling their talent. Most notably with the likes of Ericsson, Capgemini, Unilever, Rolls Royce and BNY Mellon, companies that are all experimenting with skills-first workplace practices.

 

 

These skills-first processes can take many forms, with the most common pilot projects typically involving skills-based hiring (removing degree requirements from hiring practices and expanding talent pools beyond graduates to anyone who can prove they have the right skills), and skills-based internal mobility using a talent marketplace such as Fuel50, Eightfold or Phenom.

 

Beyond this, skills-first learning is coming to the forefront as a way to continuously upskill and reskill people (AKA, retain them for longer) and match learning efforts to the exact skills that a business needs. Employers are also exploring ways to use skills to improve performance and talent management, inform promotions and other career opportunities, and influence remuneration.

 

 

Why are employers challenging something as perpetual as the job? Simply, it’s no longer fit for purpose for many workplaces. The job construct might have gotten you through the past few decades of growth and competition, but with AI and other technologies rapidly altering the way we work, the job isn’t standing up to the pressure.

 

Indeed, 71 per cent of workers already complete some tasks outside of the scope of their job description. The skills-based organisation, as it’s becoming known, simply formalises what’s happening in many workplaces, and expands the possibilities for businesses to find more effective ways to upskill, reskill, hire and retain talent based on skills.

 

 

The skills gap is growing and we need hyper-personalised upskilling and reskilling to target it. Businesses cannot hire their way out of internal skills gaps as the premium for such talent is expensive and qualified workers are few and far between.

 

Current workers will also need new skills, nearly half (44 per cent) over the next five years. In the ideal scenario, workers who need new skills (and new jobs due to changing business needs) will be upskilled and reskilled so their skills match what the business and market need.

 

But for this to happen, you need to understand what skills currently exist in your workforce, what skills your business needs, and then to match this to learning. Two-thirds of companies that take this skills-first approach to learning expect to see a return on investment within a year of their investment, in the form of cross-role mobility, increased worker satisfaction and better productivity.

 

Skills-first learning is the natural next step to skills-based hiring and internal mobility. After all, you don’t hire someone for a role and then expect them to leave if that role gets eliminated or they fail to be promoted. Hiring is expensive, so retaining talent for as long as possible is key to keeping your recruitment and talent overheads low.

 

A skills-based worker will need skills-based learning – delivered to them in the moment of need, based on their current skills and skills gaps, plus their career goals and interests. It’s the kind of personal approach to learning that many learning and development (L&D) teams dream of but has been largely impossible until now.

 

 

As many organisations are embracing more skills-first workplace processes, leaders are realising that they need more data on skills. Much of this exists within your current learning and HR systems, but it needs to be consolidated and made usable. Skills data is generated whenever someone, for example, learns something new, finishes a project, gets feedback or does a performance review. Once skills data is in a single place, it can be analysed to understand skills gaps, skills needs, skills under development and more. It is the wealth of skills data available today, along with advances in AI, that makes it possible to deliver personalised learning at scale that aligns with business skill needs.

 

Since careers and skills are highly personal, individuals will own their skills data and choose who to share it with and for what purpose, for example, personalised career and learning recommendations. Skills profiles (also known as skills passports) will show employers what skills an individual currently possesses, to what level, and what they’re building. In the future, the skills profile will likely replace the CV/resume as a way for employers to assess someone’s ability for a role or project – especially since it’ll be more up-to-date and detailed.

 

 

The shift towards skills-first working may also be the final blow to the university degree. Employers are dropping degree requirements for some roles and employees, particularly Gen Z, are falling out of love with the four-year degree.

 

Traditional educational pathways have a time and place, but are struggling to keep pace with changing work requirements. Moreover, possessing a degree from a prestigious institution may not guarantee the requisite skills for future roles. Consequently, skills may soon overshadow degrees as the primary way to assess job or project suitability. Culturally, there will also be a shift towards skills being the new status symbols and the lifelong learner being celebrated and rewarded with ongoing career opportunities.

 

 

Skills are here to stay and if you aren’t experimenting with skills-first practices, your company risks being left behind. Start with one or two use-cases, either in learning, hiring or internal mobility, and then build from there. You’ll be on your way to a critical, business-defining transformation that will leave your organisation and employees stronger, more agile and fit for the future.

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To learn more about Ultimate Guide to the Skills-First Future please visit www.degreed.com