This comes across as a Utopian concept, but the truth is, skill-based people strategies may really be the core of talent management in the near future. A very non-traditional approach, it simply translates to appointing opportunities to people based on their skills, capabilities and capacities. It is visionary and new but the results it’s yielded for forward-thinking organizations are worth considering.
When organizations make way for capabilities, employee’s potential becomes the key player. People hired for the exact job and skill may make the time and space to deliver on multiple projects pertaining to their profile, as compared to other employees operating as per the syllabus and dealing with the hygiene of reporting relationships. From improved productivity and fair career graph and growth, the benefits to this approach are plenty. As per a global Deloitte survey of more than 1,200 professionals, 63% of the work being performed, falls outside of people’s core job descriptions, 81% say work is increasingly performed across functional boundaries, and 36% say work is being performed by workers outside of the organization, who don’t have defined jobs.’
Thus, bringing us back to realizing how the Skills-Based Organization might be the answer to this contention.

What is the importance of having skill-based talent management?
Skill-based hiring would ideally start with slotting the ‘work to be done’ – broken down and then hired for. The companies employing this approach, can easily spot gaps in the system, in the worl to be delivered and the precise skill set required to deliver it – thus making this approach a winner. The key word here is, ‘preparedness’ and more so, ‘agility.’ The pace at which the times are evolving, being agile is not a cherry on the cake but a pre-requisite.
Some benefits of adapting to skill-based talent management:

1. No more silos: The talent acquisition stage set the pre-requisite straight, i.e. no hierarchy existing. The departments aren’t working on silos and there’s complete clarity on the job role enabling a seamless cross-collaboration and being caught in traditional boxes.
2. Increased diversity & inclusion: When skills are considered over the college, school attended, the area they live in, their background, culture and religion they follow, their appearance etc., there’s an undeniable acceptance and inclusion of the employee. Purely based on their skills and the potential they bring to the table. As per the Deloitte survey, skill-based organizations are 47% more likely to provide a work environment that is inclusive.
3. Enhanced employment engagement: If there’s any thing worse than an organization realizing an employee not using their complete potential is when the employee themselves realize that their current role isn’t sufficing. When the people feel their potential is not being put to good use, that’s what hinders the growth of the organization & the employee. This approach empowers employees to realize their full capabilities.
4. Compensation benefits: In a fair world, compensation should be decided as per the value addition of the employee to the organization. Yes, it’s challenging to find a direct correlation between the compensation & job, but there could be a compensation framework basis the skills being deployed. As per an article by World Economic Forum, McKinsey’s work with the Rework America Alliance proved how this approach was able to grow talent pools and increase retention in blue-collar roles, even amid economic uncertainty.

What does it mean for the HR teams?
An organization must invest in the continuous development of its employees to enhance their skills and prepare them for future challenges. This is done through formal training, mentoring, coaching, and other learning opportunities. With skills-based talent strategies, HR departments can take their organizations to the next level and align the entire employee journey - hiring, retention, reward systems etc. Here comes the hero of the movie, technology; the undeniable influence in enabling smooth HR functions.
The power of Artificial Intelligence & technology is such that it can be very easily tackle the knowledge gaps in HR functions. Not just pertaining to the hiring processes but also in enabling internal mobility. HR teams need tools to place the skills in system already, the talent required, the candidates in waiting and align them as per the team requirements and financial readiness. More than technology coming to play, there also needs to be an acceptance of the new way to work. As per a survey by Beamery in 2023, 54% of the 700 business leaders think that increasing skills shortages will be a top talent challenge over the coming year.
Yes, it’s impossible to deploy this method with technology but it also requires a willingness to embrace the technology driven talent goals.
While we discuss the benefits, we need to address the immediate challenges that may arise with this approach. One such is the lack of transparency of the skills that fall out of the required demeanour of the employee. Skills that are being built by other workers over time. Another is the resistance to share talent & resources with other workers. Managers and team leaders might find it difficult to share their talent with other departments because of the specific role they fulfil instead of being the jack of all trades. Apparently, there are talent marketplaces being formulated to match the employees with the open opportunities purely based on their skills.
In nutshell, anything new being introduced needs time, efforts, acceptance, and the readiness to adapt to change before becoming visionary. It’s a given that organizations already function on a talent management strategy. Their approach may also be updated as per the recent HR norms, but it could just be that their talent management approach may have been the correct fit when implemented, but it may also become less relevant because of the pace at which the workplace dynamics are evolving. Skill-based people strategies are undoubtedly the future of talent management, it just needs the recognition and acceptance it deserves.