This is the fourth blog in the skills-based talent series. It focuses on the differences between skills-based talent strategies and other current talent strategies. If you haven’t already, check out part 1, part 2, and part 3 for more insights.
How are ‘Skills-based Talent Strategies’ any different or better than today’s talent strategies?
There is some confusion and, at times, healthy skepticism in the market about skills-based talent. Many clients come to us curious about skills-based talent strategies. They are willing to take risks if there are tangible benefits to be gained, but they are unclear about the advantages, stripped of all the buzzwords and the hype. In plain speech, they want to know: What makes skill-based talent strategies any different than the approaches we struggle with today? And how would it better address our current talent challenges?
The St. Charles Skills-based Talent Value Chain Model TM
Skills-based Talent is not just a single strategy but a collection of talent strategies that revolve around the theme of leveraging skills data to maximize talent adaptability in an environment where critical skills are scarce and rapidly changing. St. Charles uses the model depicted below to help explain how sharing skills data across the enterprise can enable new talent strategies.
Skills-based Talent Strategies
The essential advantage is that skills data provides the enterprise with a more comprehensive understanding of its workforce’s capability and gaps – and more granular and flexible options for sourcing, developing, and moving talent throughout the organization. Fundamentally, skills data transforms HR data from an exercise in head counting to an exercise in capability mapping.
So, what specific advantages do skills-based talent strategies offer over current approaches?
Learning and Development
Today
Bit-sized learning nuggets allow for Learning in the Flow of Work (LIFOW). Small learning modules can be delivered on demand at the point of need (i.e., performance support) or arranged into topical collections or custom pathways. What they often lack is a career or business direction for these pathways.
Skills-based Learning Advantage
In our previous blog, we mentioned how skill-based learning allows employees to chart a development pathway between any two points in the organization, not just to the next promotion. In addition, skills-based learning allows for more rapid deployment of just-in-time upskilling. Combined with a talent marketplace, managers can find ‘near matches’ for a resource need with adjacent skills and target them with skill-based training to close the gaps. Similarly, they could use skill-based reskilling to redeploy resources in times of economic uncertainty or downturn to more advantageous business areas.
Resource Management
Today
[Industrial Model] Resources are deployed to full-time jobs where they repetitively execute defined tasks and responsibilities. [Project Model] Alternatively, resources are assigned to a project on an FTE basis where, for a period of weeks/months, they are dedicated to executing a set of tasks their role on the project requires.
Skill-based Resource Management Advantage
[‘Gig’ model] – Individual work tasks or short assignments are posted to an ‘open work’ database. Resource Managers use AI-enabled software to look for matches between the skills required to perform the task and workers’ skill profiles. As the work is decomposed into smaller elements, resourcing can be accomplished more discretely, providing more flexibility to the resource pool. Additionally, the system can search for ‘near matches’ through skills adjacencies, opening access to a broader set of resources. [Marketplace model] Individual work tasks or short assignments are posted to a special ‘jobs board’ where workers can self-select the tasks they wish to work on based on their skill development interests. This can happen in addition to or in place of routine work. The system can recommend upskilling options to close gaps for ‘near matches.’ This relieves some effort for resource managers and empowers workers’ self-development.
Caveat: The work must be designed to be ‘gig friendly.’ Parceling individual tasks of a complex, interconnected effort, such as by ‘work tickets’ on a help desk, requires coordination for all the pieces and people to work together effectively.
Credentialing & Assessment
Today
There is little standardization of the definition of skills, proficiency levels, or transparency regarding the skills individuals or organizations possess. What does exist is often patchy, inconsistent, and at times contradictory.
Skills-based Credentialing & Assessment Advantage
Creates an employee skills inventory with standard definitions for each skill level and objective assessment methods to determine who possesses what level of skills. This provides transparency of the workforce’s capabilities and an equitable standard that avoids many biases. Attainment of specific skill levels can be recognized with ‘badges’ providing some incentive for employee development and transferability of skill recognition within (and potentially beyond) the organization.
Caveats: Organizational transparency rests on keeping employee skill profiles up to date. Certain regulated professions may require skill definitions synched with external regulatory definitions. Assessment methods need to be cross validated. For example, the organization’s relative confidence in self-assessment vs. manager observation vs. demonstrated execution vs. AI inference vs. external certification, etc.
Leadership Development
Today
Experiential-based leadership development programs (e.g., rotational, high-potential, apprenticeship, mentoring, etc.) are labor intensive and reserved for bespoke groups identified for their leadership potential. Alternatively, more generic management or leadership development training is available for larger groups offered at scheduled times.
Skills-based Leadership Development Advantage
It allows people to self-identify skills needed for advancement by looking up the required skills for target jobs and identifying gaps against their current profile. The system can then recommend opportunities to close these skill gaps through training, gigs, and mentors tagged with the appropriate skills. It can also record those ‘ready for promotion’ – i.e., those who have attained all the necessary skills for promotion. This offers experiential leadership development opportunities to a much broader group without significant additional investment and more readily identifies candidates suitable for promotion.
Organizational Design
Today
Organizational structures are most frequently designed around business functional capability and processes (e.g., Marketing, Finance, Product groups, etc.) The most common pitfall of typical organization design is organizational silos which trap talent in specific jobs or departments not easily accessible (or transparent) to outside groups. The second most common pitfall is fragmentation or ‘shadow groups,’ where certain jobs/skills are hired by multiple groups acting independently despite providing similar services.
Skill-based Organization Design Advantage
Skill-based organizations organize resources primarily around the workforce’s skills and how those structures enhance or impede the flow of skills throughout the organization. As such, commonly shared skills may be centralized in a shared service group for global accessibility and standardization (e.g., Printing Services). Alternatively, specific scarce skills may be centralized into Centers of Excellence to allocate them more efficiently (e.g., Training Development, Software Development, etc.). Certain general resources may be pooled within operating areas while more specialized talent is allocated by need. In all cases, the primary focus is to allow for more flexible skill sharing across the organization.
Special Topic: Skills-based Work Design
As noted above, work can also be designed around skills. Most work design today is inherited from the industrial age and is based on process and scale. Skill-based work design puts the skills of workers first. A classic example involves allocating tasks for highly skilled workers in high demand and short supply (e.g., a doctor). Many organizations have tried redesigning the traditional work of experts to push the less complex and more frequent tasks down to an assistant or technician (e.g., a Physician Assistant or Advanced Practice Nurse), leaving only the essential tasks to the scarce experts. The other famous example is AI. Many companies are now experimenting with the new capabilities of AI and designing new ways of working that intend to leave the tasks that humans do best to humans and the things AI does best to computers (a process sometimes called human-centered work design).
Career Management & Mobility
Today
The classic career ladder is hierarchical, with advancement flowing to roles of ever-greater scope of management responsibility. Large organizations are often matrixed, with two or even three concurrent hierarchies one can pursue. The main shortcoming is that the pyramid grows ever smaller at the top, offering fewer opportunities to advance at each stage. This frequently leads to attrition as employees feel advancement opportunities are easier to find externally than within. A second challenge is focusing on management scope as the primary focus for advancement. This strands many career paths seeking to advance their career through other paths, such as through ever more technical expertise in their profession or craft.
The Skills-based Career Management Advantage
The primary distinction of skills-based career management is how it can open career mobility to employees. It starts by publishing the skills required for each job and each career path (i.e., the job architecture). This empowers employees to navigate their careers by actively pursuing transparently published skill credentials for job eligibility. This ability works for lateral movement and traditional advancement, as employees can seek the skill requirements of any published job their skill interests take them. This allows for more flexible career paths to help attract and retain the best talent and improve the employee value proposition. It also creates global consistency and transparency of roles that make lateral movement more feasible when combined with standard skill definitions.
Caveats: Allowing widespread lateral movement may fill leaders with some trepidation. Some organizations may consider using the opportunity to evaluate their workforce models or supporting a set number of non-traditional career paths. For example, could there be a career path for that technical expert who wishes to advance by developing ever more technical expertise? Could there be a place for journeymen who take roles throughout the company on their way to a corporate leadership position? Is there a way to support advancement through innovation or continuous improvement?
Special Topic: Skills-based Performance Management
Performance Management has historically struggled to balance a talent-influenced component, which sought to assess progress against the company’s competency-based career model, and the operationally influenced component, which sought to evaluate performance OTJ against operational KPIs. Generally, the operational influence held sway, as the operational supervisor usually provided the performance assessment. In a skill-based organization, operational managers would be armed with validated skills assessments tied to operational performance. That is, the completion of significant work assignments would validate the skill levels demonstrated by completing that work – thus merging the talent and operational dimensions.
Talent Acquisition
Today
Recruiting efforts have traditionally focused on educational degrees and bespoke work experience. The main challenge is that for many critical skills (especially STEM professions), this has severely limited the candidate pool, and there are not enough candidates to fill the demand. Many have determined that more creative approaches are necessary.
Skill-based Recruiting Advantage
Skill-based recruiting focuses more on what a candidate can or has the potential to do. Recruiters search for the skills people possess or have the potential to acquire. Many companies, for example, have started dropping college degree requirements for some jobs. For other jobs, where direct skills matches are hard to find, and the target skills are ‘learnable,’ recruiters look for adjacent skills or attributes to judge ‘potential,’ and new hires are upskilled with the target skills as part of onboarding. This dramatically broadens the candidate pool. It has the added benefit of diversifying the talent pool by granting access to historically underrepresented groups who cannot traditionally obtain college degrees.
Strategic Workforce Planning
Today
To the extent it is done, strategic workforce planning today is primarily an effort in headcount planning – matching projected demand to recruiting targets.
Skills-based Workforce Planning Advantage
Seeks to anticipate strategic skills shortages in the future and create mitigation strategies to address them proactively. It draws upon business demand projections translated into business capability projections and compares that against labor market projections for various skills’ prevalence. The resulting gaps usually lead to strategic sourcing conversations to determine through what set of strategies critical gaps will be filled, including buy, build, borrow, bot, and ‘base elsewhere’ strategies. Ready access to aggregated, standardized, internal skills data is an absolute prerequisite for such planning. With it, more rapid scenario planning and better, longer-term thinking about talent challenges is possible. The organization can gain a picture of its enterprise capability and future gaps and take steps to prepare for future challenges before they become untenable. One can also use data mining to identify critical trends and patterns in skills data tied to business lines, outcomes, advancement, departures, DEI information, or other business data.
What about Competencies, Experience, and External Certifications? Are all these being replaced by skills?
No. Each element in the talent value chain needs to build metadata on top of skills data to achieve its business goals. L&D functions need Competencies to organize their curricula; they often also need to understand sub-skills to create the kinds of terminal and enabling objectives that help them know what is included and excluded in their training courses. Resource Managers will always want to understand the context in which skills have been employed. Managing a global IT implementation is not the same as managing a training development project or a marketing campaign. Leadership development will also be interested in leadership experiences, exposures, and often qualities. Recruiters will frequently be concerned with the scope and scale at which a skill has been employed and any legal or professional certifications that may be required to work. Each function can and should build the metadata needed to fulfill its function. However, sharing across all functions is a common skills taxonomy that enables the functions to share skills data between them. That is the structural element they all need to share.
About The Author:
Craig Friedman has been a Human Capital and Talent advisor, executive, and entrepreneur for over 30 years. He is currently a Senior Talent Strategist with the St. Charles Consulting Group. He was formerly a Talent Development leader at Deloitte for nine years. Before that, he was a Human Capital Consultant at Deloitte Consulting for six years and a Human Performance consultant at Accenture for eight years. Craig led the development of two eLearning startups in the early 2000s and has served on the board of advisors for several learning-related non-profits. Craig holds an M.A. from Northwestern University’s School of Education & Social Policy and a BA/BS from Tufts University. Write to Craig at cfriedman@stccg.com. ©2024