WORKPLACE SKILLS
Skills-first HR Organisations are facing unique challenges to ensure that they have the skills they need, when and where they need them, to deliver on their strategic intentions. In order to address these challenges, HR managers are increasingly recognising the value of skills-first HR, which can be a great boon in this regard as it enables strategic agility and enhances organisational performance. Skills-first HR can be viewed as a counterpoint to traditional approaches to human resource management, which have tended to be relatively inflexible. This is evident in organisation charts that represent hierarchical promotion opportunities and the use of rigid job descriptions, with selection and promotion processes focused on qualifications and experience rather than skills and capabilities. A skills-first approach focuses on the individual abilities required to complete key work projects and aims to break down traditional boundaries such as overly restrictive job hierarchies. Matching skills to demand across the organisation is thus key. We define skills-first HR as an approach to enabling an organisation’s strategy that positions skills at the centre of HR planning. It offers a more agile approach to matching worker expertise with available and potential opportunities. Skills-first HR values skills over education and experience, while data and technology enable mapping of current employee profiles to fit emerging skill demands. While the logic of a move to skills-first HR is compelling, its full-scale adoption in practice is still in its infancy. For example, a recent Deloitte study found that 98 per cent “Skills-first HR values skills over education and experience, while data and technology enable mapping of current employee profiles to fit emerging skill demands”
Growing volatility in demand for goods and services means that even the largest organisations need strategic agility – the capability to react to changes in the environment in a timely manner – to survive and thrive. For example, almost 40 per cent of respondents to PWC’s recent CEO Pulse survey felt that their business would not be viable in 10 years if it were to continue on its current path. An essential building block for organisations seeking to become strategically agile is the capability to rapidly redeploy skills and talent to meet shifts in demand. The need for this capability is intensified by skills shortages in global labour markets. A 2023 report from the European Commission found that three in four EU companies have difficulty in finding workers with the skills they need and forecast that these skills shortages are set to continue for the long term. These trends are challenging leadership teams and HR leaders to reconsider the job-based model of organisation that has been a cornerstone of organisational design since the industrial revolution. The World Economic Forum predicts that by 2025 some 85 million jobs will be displaced, owing to automation and technology such as artificial intelligence (AI). An analysis of 15 million US job postings since 2016 by BCG and the Burning Glass Institute/EMSI concludes that jobs are more disrupted today than ever before due to considerable acceleration in the pace of change. Such continuous disruption calls into question the viability of the job as the basic unit of organisation. For example, complex job descriptions now seem at best an unwieldy basis for deploying or redeploying talent within the organisation at the pace demanded by rapidly changing markets.
Ambition | NOVEMBER 2023 | 19
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