This is the fourth in a ten-part series on Skills-based talent.
Today’s blog focuses on the implications and challenges of implementing a skills-based talent strategy on resource management and staffing processes. Shifting to skills-driven resource management has a direct impact on the operational delivery of products and services to clients and customers. As such, it can have many implications for business operating units, talent functions, and employees.
First, let’s level set what skills-based resource management means. It can mean decomposing the basic unit of staffing assignments from an FTE job assignment to more of a task level. For example, If I were a consulting manager in a professional service firm, instead of being assigned as the project manager of a project for 6 months, I might be assigned the task of tracking the testing workstream part-time on one project, while gathering the functional requirements part-time for a second project, while writing training materials part-time for a third (assuming each of these was a skill of mine). Conversely, if I were a resource manager staffing a new project, instead of looking for one consulting manager who had all the requisite skills to manage my entire project, I might decompose my project management needs into component tasks such as work planning, budgeting, stakeholder management, etc. and determine a resourcing strategy where each task/skill was sourced by different resources. I might even optimize by resourcing strategy such that some skills were filled by AI automation, some by offshore resources, some by on-shore, and some by contract labor – if I believed that would be more efficient for my project.
Skills-based resource management might look different if the work were not project-based. Perhaps resources might be pool-based and assigned in real-time into cross-functional work teams based on specialty – as perhaps a health team assembled to address more complex patient cases. It can take different forms depending on the work itself and how the work is designed. Given these dependencies, a variety of implications arise.
- A Common Underlying Skills-based Framework: Skills-based resource management pre-supposes the organization has developed an underlying framework that decomposes all the work that needs doing (all its service offerings) into the component skills required to deliver those services. This would determine the Demand for skills needed coming from the business or demand plan. Likewise, the identical skills framework must underlie the available workforce, such that each available resource has an up-to-date inventory of skills (or credentials) they can perform.
- Skills Matching – A process, either manual or technology-enabled, must exist to match open skill needs to available skill resources at the speed of the business need. This can be driven from the demand side (e.g., by the project leader), by a central authority (e.g., by a staffing function), or from the supply side (e.g., by self-selection from a jobs board). It can happen with or without an overarching resourcing strategy to guide the matching algorithm (e.g., Buy, build, borrow).
- Flexible Job Roles & Teams: In a skills-based organization, job roles may be more fluid and adaptable. Instead of strictly adhering to fixed job descriptions, employees are assigned tasks and projects based on their specific skill sets, allowing for greater flexibility in staffing while ensuring that their expertise is fully leveraged. Teams may be assembled based on the required skills for a particular project rather than solely on departmental lines. This fosters collaboration and diversity of thought, leading to more innovative solutions. This can lead to more flexible career paths. It can also lead to more complex headcount supervision and advancement.
- Efficient Task Allocation: With a clear understanding of employees’ skills, resource managers can allocate tasks to individuals with the most relevant capabilities. This improves task efficiency and reduces the risk of assigning work to someone without the necessary expertise. For example, if my project manager is highly skilled in most tasks but has never managed a budget before.
- Resource Balancing & Reduced Redundancy: Skill-based resource management enables better balancing of workloads among employees, preventing skill imbalances within teams and reducing the risk of burnout. It also minimizes redundancy in the workforce. Employees are hired and retained based on the specific skills they bring to the organization, avoiding overstaffing and unnecessary resource allocation.
- Project Feasibility Assessment: Resource managers can assess the feasibility of projects based on the availability of skills required for successful project completion. This helps in making informed decisions about project priorities and timelines.
- Adaptability to Market Changes: A skills-based resource management approach enables the organization to quickly respond to market changes and shifts in demand by aligning resources to meet new requirements. (See our previous blog post on using skills-based talent to manage economic uncertainty).
Implementing skills-based resource management can offer some unique challenges, especially the first time it is implemented in an organization.
- Resource Allocation and Balancing: Allocating resources based on skills can be tricky, as skill availability may vary across projects and departments. Resource managers must ensure equitable distribution of skills while maintaining productivity and efficiency. Without careful coordination, employees with similar skill sets may duplicate efforts, leading to inefficiencies and redundant work.
- Skills-based Work Re-design: Skills-based work redesign aims to create a more flexible, agile, and empowered workforce that can adapt to changing business needs. This can involve the decomposition of work into more granular tasks, which can be assigned on a skill basis in a talent marketplace or to AI technology as appropriate. Alternatively, it can involve employees spending a portion of their time on teams with broadened outcomes or defined problems. In some organizations, it might allow employees to take on projects in addition to their traditional job responsibilities, such as corporate ESG or practice development projects.
- Talent and Operational Systems Alignment – Skills-based resource management cannot happen in a vacuum. The need for skills frameworks, skills assessments, skill-based business planning processes, skill-based upskilling, and reporting will quickly become necessary for the process to become viable enterprise-wide. It will also, in due course, start raising questions about career paths, headcount oversight, and organizational design that aligns with the new resource management process.
- Implementing the Right Technology: Talent marketplaces are one technology solution that has received a lot of press in relation to skills-based resource management, but it is not the only one. It’s crucial to thoroughly evaluate and test any solution to ensure it meets your specific needs and goals. Maintenance and ongoing investment will also be necessary to derive long-term benefits. Careful consideration should be given to agile methods and phased implementation strategies, as these systems will directly impact service delivery. In addition, there are legal and privacy considerations surrounding the use of HR data, especially regarding large-scale employee data related to technology usage.
- Cultural Transformation: Building trust around skill utilization can be challenging. Resource Managers may feel a loss of control through central planning. Self-directed work assignments through talent marketplaces may require testing and phased implementation to build trust before mission-critical projects are resourced in this manner. Certain tasks that have been done the same way for decades or where concerns over quality control are tightly linked to existing or regulated processes will require extra diligence before trust in new ways of working will be gained.
Stay tuned for our next blog on the Implications of a Skills-based Talent Strategy – on Career Management and Mobility.