Embracing Skills-Based Strategies: Unlocking The Future Potential Of Your Business

Here’s why going skills-based is the future of your business

We are experiencing a transformation that historians will study for centuries. It extends beyond the Industrial Revolution, encompassing not just a huge technological pace of change, but scaling across all aspects of our lives and work too. It fundamentally changes the way we work, socialize, build relationships, and more. Such an overhaul is putting pressure on traditional ways of doing things — including the job. 

Jobs Are No Longer Fit-for-purpose

Jobs were constructed in a time when markets changed slowly and when workers were seen as pieces in the industrial machine. This no longer rings true. Every week brings a new ChatGPT, Apple Vision, cryptocurrency, or other innovation to the table. Hindered by the inflexible job structure, business leaders are struggling to keep up with the pace of change and the adaptability required to succeed in the future of work. They need their people to be continuously upskilling and reskilling to future demands, and to be ready to move into roles and projects that match their current skills. They need flexibility and fluidity. This is why forward-thinking organizations are looking to replace the job with skills.

That is given rise to the ‘skills-based organization’. A new model of doing work based on skills data. Just like how data made marketing more effective, skills data will help business leaders make better talent, development, deployment, and make workforce planning decisions more effective — all for the benefit of workers. 
 
In fact, 93% of leaders feel that moving away from the job construct is important to their organization’s future success. Early adopters of the “skills-based organization” are reaping the benefits with 41% reporting better financial performance, 33% increased retention, 26% the ability to anticipate future disruption, and 25% more opportunities to innovate.

Skills speak to everyone

The effort required to write a comprehensive job description is significant, and the majority of job descriptions actually fail at fully describing what work has to be done. Talking about skills, however, gives a common thread that individuals, managers, and senior leaders can all understand. 
 
Skills make for a compelling message at all levels of your organization. Individuals can see how their skills match with future work opportunities, giving them a reason to learn new skills and improve current ones. Department heads understand that skills are the driving force behind their chosen initiatives, like implementing automation or other digital transformations. And the C-Suite are well aware of the need for skills to drive business performance and fulfill strategies — anything that will help alleviate their concerns about skills shortages will be of tremendous interest.

Deconstructing Jobs

With your stakeholders bought into the concept of the skills-based organization, you need to move towards reality. This is where the hard work really begins, but it will pay off in the future where skills, not credentials or connections, become the de facto way of sourcing and retaining talent. Going skills-based now, gives you a significant head start. 
 
To move away from the jobs construct… you need to deconstruct your jobs. It’s laughingly obvious, but expect this to take time as you likely have thousands of jobs, and tasks within those jobs, that need to be deconstructed. Once you’ve got your component tasks within each job, you can identify the skills needed to fulfill them. 
 
However, you don’t have to wait to deconstruct all of your jobs to get started in creating a skills-based future for your organization. Here are two things you can do today to get started:

1. Organically start to collect skill data from your employees as part of their learning activities. Leverage your learning platform to engage employees in creating a skills profile that consists of the skills they have and the skills that they would like to develop. Also, monitor and track the skill that they are learning to determine trending and emerging skills

2. Strategically focus on building critical skills tied to the execution of your business strategy.  This allows you to prioritize the skills and work that you need to understand better without embarking on a long exercise of deconstructing every job in your company. As it stands, what’s required to perform a job changes very quickly, so it’s more important that you prioritize the critical work to be done and define the skills associated with that work.

Adapting to AI (and Other Disruptions)

It may come as a surprise to learn that the deconstruction of jobs to work may have likely started in your organization already… especially if you are using automation and generative AI tools (like ChatGPT). That’s because automation and AI carry out individual tasks very well — as opposed to automating entire roles. If you have people using ChatGPT in their roles today, they’ve already identified a task or two within their job that they recognize can be done by a machine.
 
Conversely, the skills-based organization makes it easier for your workforce to adapt to whatever the next ChatGPT will be. If everyone understands the individual tasks and projects that they are contributing to when a killer app comes along that can do some of those tasks, the handover is relatively straightforward. The sooner you start collecting the skills that your employees have and associating them with various types of work, the easier it will be for you to facilitate the deployment of individuals to critical work when the next technology tool arises.
 
The best thing is that skills help to empower an employee in driving their own career. Productivity tools like ChatGPT, more time to focus on other tasks that cannot be computerized, and if you are using skills as a way to match them to tasks and projects, they can simply search your internal talent marketplace, job board, or upskilling platform, for new tasks that align with their experience. They don’t have to worry about losing their job to automation because their skills will keep them utilized across the company.

Breaking Down Silos

This highlights another important benefit of the skills-based approach. For too long talent has been hoarded within teams and departments. Within a skills-based organization, these siloes are broken down and people are free to work on projects across the business. Whatever matches their skills and experience, they are able to contribute. That makes for a much more agile business where everyone’s skills are being used to their full potential. It also creates a more satisfying and interesting workday. 
 
It also supports the trend toward gig work. In 2022, 36% of people who are employed in the U.S. participated in some form of gig work. This will increase to 50% by 2030. Gig work is trending because people like to have both variety in their work and control over the work that they do. Leveraging skills to create “internal gigs” accomplishes both.

Learning becomes hyper-focused and impactful

When you then look at L&D through the skills-based lens, it gets really interesting. Many skills-based success stories you see today focus on the early part of the employee experience, hiring, or on lateral moves within a talent marketplace. Which is beneficial for those looking for new roles or projects. But what about people who wish to progress, to climb the career ladder or completely switch professions? That’s where skills-based learning comes in. It’s a more holistic and comprehensive way of upskilling and reskilling people, that complements the way people join and move around a skills-based organization. 
 
Skills-based learning takes us back to the fundamentals of acquiring human knowledge. In our formative years, we don’t just acquire knowledge but practice it. Learning, in its purest form, isn’t something that we do, but something that we experience and how we respond to it. In a ‘real world’ sense, it would involve someone learning via a course or learning pathway. Then stretching this skill through practical experiences like assignments, volunteering, or teaching others. This expands their capabilities, increases the level of the skill, and helps them feel more confident in applying it. They may then reflect on their learning, either as part of a peer group (if everyone is upskilling in a specific area) or with a coach or manager. This will eventually lead to more opportunities to practice their skills with internal moves and build deeper competencies through further learning. 
 
Learning in a skills-based organization becomes hyper-relevant to someone’s career path and current projects. No more wasted dollars on irrelevant learning and skills that aren’t applied to the business. 

Just the Start

This really is the tip of the iceberg of the skills-based organization, but it gives you an idea of where the world of work is heading. Becoming a skills-based organization will be a long-term project, that’s best done in stages and iterated over time. As more organizations embrace skills in all parts of their workforce management and development, you’ll see more discussions arise over lingering questions like how are skills valued? How do we govern our skills data? And even, how do we prepare our workforce for the skills-based transition?
 
We are all learning, at this stage, how to move into skills-based approaches for everything we do as HR and learning leaders. So it’s okay to be unsure about where to begin. However, this is a trend that will only grow over time, so start today by understanding what skills-based looks like in your company. Don’t ignore the transformation happening around us, or you may find yourself left behind with an outdated, constrictive approach to work that stops your business and people from achieving their best work. 

Janice Burns is Chief Transformation Officer at Degreed.