Implications of a Skills-Based Talent Strategy across the Talent Value-Chain
This is the first in a ten-part series on Skills-based talent.
As digital transformation, the future of work, and the gig economy transform the landscape of business, organizations are becoming more agile and responsive. Static job descriptions, siloed teams, and traditional career ladders are giving way to cross-functional project teams, gig workers, and dynamic career paths driven by skills acquisition rather than tenure.
Organizations are exploring skills-based talent models focused on mapping capabilities, enabling continuous learning, and leveraging analytics to access talent, reskill employees, and adapt to new business demands.
Despite the widespread interest, the majority of organizations are still in the early stages of their skills journey, with only a limited number of success stories to draw from.
Recently, St. Charles/NIIT surveyed and interviewed a select group of 20 pioneering companies from multiple industries to better understand where they are today on their skills journey and their unique drivers, strategies, and approaches to building a skills-based organization. Our objective was to uncover valuable insights and best practices that can steer organizations toward sustainable growth, competitiveness, and success through a skills-based talent strategy.
Our discovery work examined cross-industry business drivers from a talent and operations perspective. One of the key insights gained was that businesses are responding to a variety of business drivers spanning two dimensions: 1) short and long-term timeframes and 2) operational and talent drivers.
Operational Business Drivers
- Many companies face competitive and cost pressures driving changes in service-delivery models. Common examples include full or partial offshoring of resources, standardization and automation of global processes, centralization of key functions through Centers of Excellence and Shared Service Centers, and the need to upskill and reskill resources with new work responsibilities rapidly.
- Companies are also facing an acceleration in the change of skills required by workers as organizations respond to a continual influx of new technologies, changing products, and market competition.
- Increasingly, companies are finding a need to respond to sudden disruptions to business volume driven by global pandemics, extreme weather, economic downturns, and other factors.
- In the longer term, most companies are aware they need to address future ways of working driven by the transformative impact of new intelligent technologies such as generative AI, robotic process automation, cognitive computing, etc. These technologies are expected to drive the re-design of work performed by both machines and humans, creating a new demand for AI skills, and the decomposition of existing models of job roles and responsibilities.
Talent-driven Business Drivers
- Many companies are feeling the need for more adaptable talent models to address both internal and external skill shortages, rapid upskilling/reskilling needs, inefficiencies in resource management, and ongoing retention challenges.
The war for talent has never been greater. In a recent CNBC interview, PWC U.S. chairman Tim Ryan declared, “The War for Talent is over. Talent Won.” Several talent drivers emerge as employees and candidates flex their newfound power to choose.
- Companies face an increasing need to differentiate their employee experience to attract and retain the best talent in response to changing attitudes about career mobility, loyalty, and flexibility.
- Companies also need to address Future of Work talent challenges like changing labor markets, non-traditional labor pools (non-degreed, contingent, etc.), the gig economy, and increasing DEI goals.
Skills-based Talent Value Chain Journeys
Skills-based Talent Value Chain
The graphic below represents the major skills-based talent value chain processes. The talent processes (cogs) are arranged in order of relationship to one another, with most interconnected processes adjacent to one another. The talent processes on the left are those that are closest to the operational delivery of products and services in the business. The talent processes on the right are those most directly driven by enterprise-wide talent issues.
- Workforce Planning – deals with understanding the skills within and across the enterprise as a whole and planning for the skills the enterprise will need in the future. This involves both internal systems to assess and collect current skills and skill-sensing systems to determine future skill needs.
- Talent Acquisition & Recruiting – deals with acquiring through external sources the skills the enterprise will need in line with the workforce plan. It requires an understanding of the skills available in various talent markets – as well as an understanding of what to pay different candidates.
- Compensation and Rewards – deals with the pay associated with different skills. Rather than pay tied to job level, experience, or professional degrees, skills-based pay is driven by the market value of various skills – as determined by supply and demand or the intrinsic value created by various skills.
- Career Management and Mobility – Career Management deals with how an individual navigates or advances through the organization over time. As opposed to advancement up the career ladder, skills-based career management can be much more flexible, offering many career paths depending on the design of the skills-based job architecture.
- Adaptable Talent and Organization Design – Adaptable talent seeks resources that can be more flexibly deployed across the organization. It depends mainly on organizational design issues, such as the skills framework, how it aligns with the job architecture, and how resources are managed from it.
- Credentialing and Proficiency Assessment – deals with the process of assessing the degree to which various resources possess various skills. It deals with assessment methods and the management and tracking of employee skills data. It can be an input to staffing and advancement decisions, as well as determining developmental needs.
- Resource Management and Staffing – Resource Management deals with how resources are deployed to specific job assignments or project needs. It is influenced by the design of the work itself and the organization of work teams that deliver it. It is managed by a process that aligns project or skills needs with the resources that possess those skills. Talent marketplaces are one such system.
- Leadership Development – deals with the development of management and leadership skills needed to lead teams and larger functions in the organization. Leadership skills are often informed by succession or leadership plans defining the leadership needs of the organization.
- Learning and Talent Development (Upskilling/reskilling) – deals with strategies and methods for upskilling and reskilling internal resources over time. Skills-based learning places a focus on professional development at the individual skill level, as opposed to “job training,” or “career milestone training.”
Skills-based Talent Journeys
The steps on a skills-based talent journey can be navigated in multiple ways. Depending on each organization’s unique business drivers, they can start in different places. Applying a skills strategy to a talent process tends to raise issues with the talent functions most adjacent to it. Thus, the skills journey tends to proceed from its starting point, up or down the value chain from its point of origin.
Service Delivery Model changes tend to start on the left and work their way right. Future of Work-driven changes tend to start on the right and work their way left. Business disruption and Talent Marketplaces often affect resource management first and proceed left or right to adjacent processes. The re-design of work due to new AI technologies often affects job architecture and adaptable talent models first.
Many complex organizations are responding to different business drivers simultaneously – and, thus, have initiatives started in multiple places. Each one would tend to proceed to the adjacent areas, eventually “meeting” somewhere between the two starting points. This is where having a coordinated enterprise skill strategy and some centralized governance is critical. It is all too easy for these two independent skills journeys to meet, having developed two entirely incompatible skills frameworks, job architectures, or talent systems. Each group must align on some shared assumptions, framework, and communications so they can each respond to their own skill needs while having compatible or aligned frameworks when they meet in the middle.
The next eight blogs in this series will explore the implications of a skills-based talent strategy for each talent value-chain process (cogs) in more detail. The tenth blog will discuss St. Charles’ Skills-based Talent Strategy Framework and Maturity Model – STREAM®. The STREAM® model breaks down the elements of a Skills-based Talent Strategy into 6 categories: 1) Strategy, 2) Transformation, 3) Recognition, 4) Enablement, 5) Alignment, and 6) Management Systems – and provides a robust set of metrics to assess the maturity of these elements over time.
The blog series will conclude with a webinar in which a panel will discuss all aspects of the skills-first talent strategies. Mark your calendar for November 9th at 1 pm Central time if you would like to attend. Register below.