Why would I consider Skills-based talent Strategies? (Part I)

This is the first of two blogs examining the reasons why many companies are pursuing an interest in skills-based talent strategies. This blog focuses on the business drivers that are driving many companies to consider skills-based talent strategies, and why this interest has arisen at this time.

Why would I consider Skills-based talent Strategies? (Part I)

Most of our clients cite the historic scarcity of talent in certain fields (particularly STEM fields) caused by a combination of retiring baby boomers, fewer new graduates, and quicker turnover cycles. The second most common reason we hear is the acceleration of change in skills required by workers as organizations respond to recent technologies, new service delivery models, changing products, and market competition.

Other reasons we hear about:

  • Companies are seeking more flexible ways to respond to sudden disruptions to business volume driven by global pandemics, extreme weather, economic downturns, and other factors.
  • Companies are seeking to improve the efficiency of their internal resource management practices with talent marketplaces and more insightful search of internal skills.
  • Companies are seeking to improve the employee experience and address retention challenges by offering more individualized development opportunities and more career flexibility and mobility.

How is this problem different from before?

The pace of technological change has never been greater. Many companies are being driven to dramatically change their service delivery models to keep pace with global competition and cost pressures enabled by automation and global virtual work environments. In addition, companies are being driven to find radically new ways of working enabled by the latest wave of Artificial intelligence and data analysis capability. Also, the global trend towards decarbonization and energy transition is forcing global firms to reconsider historic work practices and long-established global supply chains. In all these cases, the demand for rapid and flexible new business capabilities is outstripping many companies’ ability to keep pace.

At the same time, many industries, especially those that rely on Science, Technology, Engineering, and Math (STEM) professions, are experiencing historic talent shortages as baby boomers retire and emerging new graduates in many of these fields have dropped. Armed with this scarcity of supply, global attitudes about work location, conditions, and opportunities have empowered many workers to become far more selective in the companies they work for or stay with. In such scarcity, traditional methods of external recruiting, internal talent development, and employee retention are proving inadequate.

The twin challenges of increased demand for new business capabilities and decreasing supply of available talent are driving the need for a different approach to talent management. New methods are needed to draw talent from larger talent pools, leverage scarce skills more flexibly across the organization, develop talent far more quickly and discretely, and offer employee value propositions that are more enticing to attract and retain talent. A more adaptable talent model that provides skill flexibility and better talent mobility is needed to enable more sustainable talent management than ever before.

Why is Skills-based Talent being discussed now and never before?

Because recent technology makes it possible like never before. Most companies have not captured comprehensive skills information about their workforce before because it was too difficult. In point of fact, most organizations have historically struggled even to maintain an accurate headcount of their organization – what with all the new hires and departures, LOAs, transfers, etc. A workforce is a dynamic, fluidly changing thing. Even if the HRIS data were completely up to date, all it would tell you is headcount and current department – it captures little about what all those workers can do. Historically, most organizations have kept some level of information about their employees’ skills, expressed or implied, but what they did have was patchy, incomplete, and often contradictory. Today, thanks to artificial intelligence and advanced data analytics, new tools exist that make taking and maintaining a complete inventory of the skills of your workforce both feasible, and advantageous.

What could a company do with comprehensive skills data?

It turns out, quite a lot. For example, if an organization had comprehensive skills data for all its employees, it could:

  • Target learning for each employee based on individual skills gaps, interests, or performance review information – rather than annual large group training or career milestone/job training. In other words, they could chart a development pathway between any two points in the organization, not just to the next promotion.
  • Better search for internal talent to fill open assignment gaps by finding skills matches or near matches – allowing the opportunity to staff people to assignments on a more granular level surrounding particular skill sets. It also provides greater breadth of employee search by allowing near matches combined with JIT upskilling/on boarding.
  • Standardize performance levels for each critical skill with standardized assessment and certification definitions.
  • Empower employees with more autonomy in managing their careers by allowing them to proactively look up skills gaps required for advancement, lateral movement, or based on their own interests and seeking opportunities to close those gaps through training, internal assignments, mentors, or communities tagged with those skills.
  • More flexibly respond to fluctuations in business demand by focusing redistribution efforts at the more granular skills level or by leveraging talent marketplaces combined with targeted upskilling to rapidly move people to areas of greater demand.
  • Use skills data to inform organizational design decisions to more flexibly house, allocate, distribute, and support employees with critical or scarce skills. In other words, decrease organizational silos by making skills and capabilities more transparent.
  • Dramatically expand the base of potential candidates for recruiting efforts by searching for skills applicants have or have potential to learn, rather than just on the degrees, job titles, and bespoke experiences they possess. This has the added benefit of diversifying the talent pool by granting access to historically underrepresented groups.
  • Gather a picture of enterprise capability and gaps to enable workforce planning efforts through enterprise reporting enabled by standard skills definitions and a comprehensive skills data set. 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.

Without consistent enterprise skills data, it is hard to identify your skills gaps now or in the future. It is also hard to know where to focus your L&D efforts, find people with the right skills, and know what skills will help you develop or navigate your career. Fundamentally, skills data transforms HR data from an exercise in head counting to an exercise in capability mapping.

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