Becoming a Skills-based Organisation – Seven Aspect to Consider Before Getting Started
In the current business landscape, characterised by its fast pace and constant change, economic uncertainty is the new reality. To address this and stay adaptable and competitive, businesses are seeking innovative solutions to navigate challenges such as the threat of recession, industry disruption and talent shortages. One such solution that is gaining popularity is the use of skills-based workforce planning and internal talent marketplaces.
Skills-based workforce planning is a strategic approach to building teams and developing the workforce ensuring that it has the skills and competencies needed to achieve business objectives. It involves identifying the current and future skills needed, assessing the existing skills of the workforce, and developing strategies to close any gaps.
According to recent research by Deloitte, 90% of leaders are experimenting with skills-based strategies. This shift is driven by the significant benefits that skills-based organisations can bring. Deloitte's research found that skills-based organisations are 107% more likely to place talent effectively, 98% more likely to retain high performers, and 49% more likely to improve processes to maximise efficiency - and with that manage their cost base and increase profitability.
Despite the growing enthusiasm for skills-based strategies, many companies still have a long way to go before they can be considered skills-based. There are many challenges businesses face when setting up a skills-based organisation. At collup, we are currently co-creating a talent mobility platform in collaboration with early pilot clients. In this article, we want to share some learnings and aspects to consider before getting started:
1. Required and Actual Skills
Skills-based workforce planning involves identifying the skills that are required for future success and mapping those skills to teams and employees (or potential external candidates). Leaders define the skills and proficiency needed, and then assess which skills are available. To categorise and organise skills, organisations can draw on skills taxonomies (a hierarchical structure that categorises skills in a “tree” structure) or skills ontologies (a more complex network-like structure that includes the relationships and dependencies between skills).
Questions to ask:
Which skills and competencies are required to perform tasks and essential aspects of the job?
What knowledge, experience and proficiency do the employees have in those relevant skills?
Do we want to build our own or buy a skills taxonomy or ontology? How unique is our business? What is the benefit of going through the exercise of building our own?
2. Current and Future Skills
Organisations need to focus not only on the present, but on developing the skills that will be in demand in the future. Strategic scenarios can be used to identify the skills that will be required in the future.
Questions to ask:
To what extent are our employees skilled and ready to execute on the current business model? Where are skills gaps today?
Which skills will emerge and become more important in the future considering different strategic scenarios? Is our workforce ready to execute the strategy? Where are our greatest gaps and can we close them on our own?
3. Hard and Soft Skills
Skills-based workforce planning involves assessing both hard and soft skills (the terms “hard” and “soft” are somewhat controversial and imprecise, but we’ll use it here to keep things simple). Hard skills refer to technical abilities and expertise required to perform the job learned through training and experience - such as coding, data analysis and project management. Soft skills refer to competencies or the individual knowledge and behaviours which leads employees to be effective and efficient in a job - such as communication, teamwork, and problem-solving. Social thinking styles (personality and cognitive ability tests) are equally important, as they can impact team dynamics and productivity.
Questions to ask:
Which technical skills are required to perform tasks? How detailed to we want to go and what is the maximal number of skills to be assessed (50, 500, 5000 skills)? Shall all employees be assessed against all skills or only the ones relevant for the team or business area?
Which competencies are relevant for the company, team and job? Is it OK to focus only on 10 to 20 base line competencies?
Which informal team roles and social style are relevant for the team? Which personality test (if any) is deemed adequate for our setup and culture? How important is (cognitive) diversity to us and every team?
4. Static and Dynamic
Skills-based workforce planning should be dynamic and reflect change and growth. Now that the half-life for technical skills is only 2.5 years, one-time assessments are simply not sufficient. And companies should not just look at how long someone practiced a specific skill. They should also consider when they acquired or refined that capability and how much time has passed since. Organisations should therefore develop strategies to continually assess and develop the skills of their workforce.
Questions to ask:
Is a one-time skill assessment sufficient? What do we want to take away from this exercise?
How and with which periodicity do we conduct assessments? How do we include new employees?
How do we ensure to stay on top of change and consider emerging skills?
5. Active and Passive Data
Assessment is an important part of skills-based workforce planning. Active data, such as self-assessment and manager assessment, is a good and efficient starting point and can provide valuable insights (be aware of biases and inconsistencies though!). As work evolves and technology continues to advance, skills assessments are shifting to become more data focused. Rather than asking employees to complete a test (and over-relying on manual reporting), companies are in addition now collecting passive data from employees’ previous professional experiences to evaluate their skills and how to best utilise them.
Questions to ask:
Which type of skills assessment do we prefer?
Do we focus only self- and manager-assessment or shall we include 360-degree and peer reviews?
Shall the skills assessment to be independent or related to performance review? What impact has this on the acceptance of such assessment by the employees?
Which passive data points such as past performance metrics, learning management information, digital communication data and web analytics do we want to use?
What impact has using passive data on employee consent and participation?
What ethical aspects need to be considered (data security and privacy, employee consent, accuracy and fairness, consideration of bias etc)?
6. Skills and Interests
Skills and competencies are one thing, but employee’s aspirations and interests are equally important when it comes to skills-based workforce planning. Organisations should consider employee aspirations and learning ambitions when developing strategies to close skills gaps and develop the skills of their workforce.
Questions to ask:
How do we discuss and track employees’ interest, learning ambitions and superpowers?
How do we currently use this information to staff future teams and projects?
7. Employee and Team Perspective
The difference between failing and succeeding is a great team. Complex challenges and innovation require powerful teams that are aligned in values and share a common goal but are diverse and complementary in skills and thinking styles. While many organisations still focus their talent development efforts on matching one employee to a job, the importance of staffing complementary teams can not be underestimated and still neglected by many leaders.
Questions to ask:
What makes a great team?
How do we staff (cross-functional) teams today?
Which skills need a certain proficiency level from all members of the team? For which skills it is OK to have only a few very skilled experts? Where are dependencies?
Beyond complementary skills, how do we take into account social styles and preferred informal team roles?
Conclusion
Skills-based workforce planning is essential for organisations to remain competitive in the long run. Identifying the skills that are required for future success is an interesting exercise to go through as a leadership team. Assessing the existing skills, competencies and social styles will give the basis to staff effective teams. And particularly the last two points in the above list, are important and close to our heart.
Going skills-based will create lasting impact as it will give indications on the 4 Rs of talent development:
Redesign: Best match of people to teams and projects based on strengths and interests
Recruit: Clear guidance for recruiters on what’s missing in teams
Reskill: Indications on skills gaps and suggestions for up-/reskilling
Retain: Best basis for talent mobility and internal career moves
Fortunately, today there is technology that supports organisations on this journey. That is what we do at collup and try to get better every day. Because finally, this is what gets us out of bed: To support businesses in building dream teams. To create impact. At scale.