- While focus on employee experience may be decreasing in organizations, the lack of needed skills has been cited as the top or second most important challenge by business and people leaders.
- A consistent skills architecture across the entire ecosystem is critical to building a skills-based approach.
- As we’re in an era of skills-based talent planning, making your case isn’t about why you need a skills-based approach, but more about addressing business challenges that result in mutual benefits to the workforce and the organization.
It’s no secret that HR is focused on cultivating skills-based talent strategies and approaches, but you might not be aware of what it takes to transform your entire talent process. As change is more constant and frequent than ever, you might still be determining the best approach. Transformation is an ongoing process, filled with key learnings and adjustments along the way.
To demystify the process, guest speaker Betsy Summers, Principal Analyst at Forrester Research, joined us to share what talent professionals have learned navigating this process, and what you need to anticipate with skills-based talent practices. Summers also shared data into recent research on the future of work, and how skills intelligence and technology like AI can benefit you in navigating challenges.
Related content: Need some help getting buy-in for skills-based approach from the C-suite? Read our e-book on getting executive buy-in for AI.
The changing nature of work
Forrester’s research reveals that skills gaps continue to be a top challenge confronting organizations. Summers said that she hears this often from HR and business leaders.
Another challenge is trust. Workforce trust in HR and executives has eroded. Forrester research shows that less than half of the employees they polled trust that HR and executives will follow through on promises they make. This might be attributable to many organizations pulling back on DEI initiatives and flexible work. The impact on HR professionals is significant as they are on the frontlines of rolling out many of these unpopular policies.
Summers said that talent professionals must recognize that executives have shifted away from employee experience initiatives, and that should influence how you present new requests to leadership.
“[Employee experience initiatives] are still very important, but it’s the way that you position them now that matters,” Summers said. “Creating a business case around the strategy and then presenting the workforce benefits with a trickle-down effect into organizational benefits is not going to be as successful. Now you have to show the mutual benefits to the workforce and to the business.”
The business case for skills-based talent practices
For HR professionals still finding it difficult to gain executive support for skills-based talent management, Summers said presenting the cost of doing nothing can create momentum. It’s also essential that you are aware of the assumptions executives often make about skills.
“Executives will say that the organization has always been skills-based, but the way they’ve been using skills is either locked in their heads or based on subjective definitions of what an individual’s skills might be,” she said.
The other element to keep in mind when making a business case for skills-based talent practices is that it’s a complete transformation of how talent is managed in the entire organization. It involves people, processes, and technology. You have to think about how this impacts all people in the organization and show them that this new way of finding, retaining, and developing talent can be more successful.
Even within the HR organization, there might be silos in each step of the talent management process and how skills data is collected. A consistent skills architecture across the entire ecosystem becomes critical to pursuing a skills-based approach.
When skills strategies are aligned to the business and executed well, the workforce benefits with a better employee experience that encourages engagement. Additionally, when starting in one area to solve a business problem, like recruiting or talent mobility, further improvements from superior skills intelligence are often surfaced in other areas, such as talent planning.
Q&A: Skills-based talent management and AI questions
Summers said it’s almost like the talent industry is in the 2.0 version of becoming skills-based where new challenges have been unearthed. Here, she answered some of the top questions from our audience during the webinar.
What advice do you have for global companies wishing to implement a skills-based approach? We currently have buy-in from the C-level, but the project has not started.
Summers: It might be good to dig into why the project has not started. When we see this, it’s either a complexity issue or a budget issue. But since there is buy-in from the C-level, are you clear on exactly what they are buying into? Because usually there is a compelling business challenge or business problem that you need to address and solving that problem without a skills-based approach is not going to be successful. You have to have an outcome in mind. The outcome reinforces why you’re doing this and should help to get over whatever is stalling the project.
Without knowing more about this specific situation, it might be a complexity issue. I would just try to pinpoint who exactly or what exactly may be the barrier or identify the parts of the organization that might say, “This doesn’t work for us.” If that’s the case, you’ll need to dig into that as well. A lot of times in configuration, you can come up with a flexibility that will work for everyone.
How do companies go about uncovering skills gaps? Is this typically through a crisis or are there ways to be more proactive?
Summers: Obviously, when crises come up it’s easy to see the problem. To be more proactive, you can look at your recruiting analytics, like time to hire against industry benchmarks. Other indicators can be priority jobs that have been sitting unfilled for months with no movement, or if business units are telling you the candidates you send them aren’t the right fit.
You can also look at attrition to see which roles have the most turnover. This can give you a clue as to some of the skills and knowledge you might be losing. Taking it one step further, you can look at what skills your competitors are hiring for right now and how that compares to your company. Digging into how your company performs against those analytics, and what capabilities competitors are trying to deliver as a business to what skills they need.
If there are skills silos that exist across the organization because different functions are managed by different leaders, how important is it to get all those leaders on board? Would you recommend doing a pilot first?
Summers: Getting everyone on board can definitely vary given the power dynamics within different companies, especially when it comes to centralized versus decentralized organizations.
Pilots have been effective with showing the value. At least demonstrating value in one area with the intention to expand it throughout the organization. The key is to measure the same KPIs in the pilot that you intend to measure for the overall organization. You don’t want to just run the pilot and see what happens. You want to be very mindful about what KPIs you’re looking to glean from it since this can be very compelling to other leaders when you approach them.
You also want to make sure you’re thinking about how to manage all your stakeholders and understand what’s important to them, and making sure that you architect the pilot to attract them, rather than have them put up their defenses out of habit.
In your experience, is doing a pilot going to be a typical skill-based journey for most organizations?
Summers: Yes, that has been the most common approach I’ve seen. I’m only familiar with three organizations that went through a top-down/centralized approach and thought about skills running everything into every function. However, that took a lot of time, a lot of buy-in, and an authoritative positioning, as in, “This is what we’re doing.”
It’s more common to see a specific business problem identified in one area, like with recruiting or talent mobility, and see the benefits and identify other problems that could be solved with skills intelligence.
All of that is to say, you want to make sure that you’re talking to your colleagues and bringing them in as advisers. If you’re bringing people to the table to show them that you’re doing certain things with skills from a mobility perspective, you also need to hear the learning perspective, or the recruiting perspective, and so on. Even if they’re not going to be implementing it in their function, they can certainly advise, and this paves the way for expansion into their functions.
You talked a little bit about this as a huge transformation: It’s not just the technology, it’s also the people and the process. What else would you want to be aware of?
Summers: One of the other big pieces is when the organization isn’t clear about why skills data is important there is low or no adoption. Your workforce isn’t going to sit there and tell you about their skills or validate them if they don’t understand why they’re doing it, and why it’s important to them. You have to show them that if they don’t use it, and if they don’t see that their skills profile accurately reflects who they are and what they want to do at work, then you can’t use that data for talent planning or talent decisions.
But if they see that this data is being used for something that relates back to them, like finding new career development opportunities, new projects, or other work they’d like to do, they’re more likely to use it. You have to show your workforce that leveraging the full scope of talent intelligence, which would include their interests and aspirations, and what motivates them is in their best interests.
How do skills-based strategies contribute to more accurate hiring decisions? And what impact do they have on reducing the risk of misaligned qualifications?
Summers: Misaligned qualifications and wrong hires are definitely challenges that a lot of employers are worried about, especially in a remote world of work. That’s why the skills-based approaches for sourcing and matching is a strategy a lot of organizations are adopting.
The skills-based approach tends to be more successful because the other things that we do to evaluate, source, and screen talent are usually based on keywords, or a previous job title, and they are not always precise or accurate.
When you look at skills, they tend to enable a more granular approach where you can start to understand the intersection and relationship between different skills. One type of work could require 25 different skills rather than two or three job title matches. Skills also expand your talent pool in that they give you more ways to match adjacent skills in how they interact and work together.
In what ways do data and analytics play a role in skills-based talent strategies? And is there that wealth of information in terms of skills gaps across HR functions?
Summers: Well, not as much as you would hope. This is mostly because data tends to show up as unstructured. If you think about performance, where you’re assessing people based on their performance and it’s a skills-based conversation. Do you have the skills you need to perform and also achieve your goals? Unfortunately, the evaluation of those skills is all written out in a form.
It’s unstructured data that is hard to collect and analyze. So, you would need a sophisticated way of managing your data and analytics to deal with that unstructured data. That is, of course, becoming more possible with generative AI, but the leaders we see are more reluctant to bring generative AI into HR use cases because of the risks that they perceive. I’m not saying that’s right, but there is a big potential there.
Another example is the unstructured data pulling in information from an LMS. What do you want to see from the LMS that you can look at in performance evaluations just based on goals? What is the individual trying to achieve? Translating that into skills that you would need to do a skills match, etc. There are a lot of places where skills data might live, but it’s usually in unstructured data or it’s trapped in a data pipeline that just doesn’t have a way out.
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