A key consideration for any organisation evaluating the introduction of a skills taxonomy is understanding the trade-o s between building and buying one. Developing a bespoke skills taxonomy is a major undertaking and may generate resistance or power struggles between organisational stakeholders. Equally, the challenge of ensuring that the taxonomy remains up to date and reflects the emergence of new skills is significant. Given that there are some relatively advanced and user-friendly taxonomies available in the marketplace that o er viable options, we saw a preference for external sourcing of skills taxonomies in many firms in our study. Key factors considered in evaluating this decision included relevance, timeliness and cost. Building block 2: Skills audit Having agreed a skills taxonomy and created a shared language to frame the skills conversation, a key next step for organisations is to develop a baseline understanding of the skills that are currently available in the organisation – a process commonly referred to as a skills audit or skills inventory. Most of the organisations in our study began with a reliance on employee self-assessments, in some cases supported by discussions with line managers, in building their initial skills data. Logistically, getting employees to complete skills self-assessments could be a major challenge, especially
of business executives said they plan on moving to become a skills-first organisation. However, the same study found that fewer than one in five of those organisations were adopting skills-first approaches in a clear and repeatable way, a finding that is supported in our own recent research, supported by Skillnet Ireland and carried out in partnership with the Learning and Development Institute. Shifting to skills-first HR presents significant challenges in practice and from our research we have distilled four building blocks that are essential for its development. Taken together, these building blocks o er a roadmap for an organisation’s journey to skills-first HR. Building block 1: Skills taxonomy One of the key challenges faced by organisations in transitioning to skills-first HR is developing a shared language and framework to capture skills across the organisation. The term, ‘skills taxonomy’ describes a classification system for all skills, both interpersonal and technical, that employees in the organisation may need. A full skills taxonomy typically includes definitions of skills as well as descriptors that can be used to assess the level of ability an employee may have. They are an essential building block in realising some of the most important benefits of skills-first HR practices, including enhanced mobility, career opportunities and the capability to redeploy relevant skills to where they are most needed.
Comparing traditional and skills-first HR
Traditional HR Job description
Skills-first HR
Core unit of analysis
Employee skills profile
Criteria for selection/hiring
Knowledge (education and qualifications); abilities (previous experience), personality
Skills (developed through practice)
Job architecture
Hierarchy, job families
Broad, open
Mobility/careers
Generally through a job hierarchy structure, upward career trajectory
Fluid aligned with career aspirations and work demand
Employee agency/ career management
Low to medium
Medium to high
Talent planning
Critical roles, succession planning
Analysis of skills data using Al to understand current and changing availability and demand Primarily internal, redeployment, development, some external hiring
Filling talent gaps
Primarily external hiring, some development
20 | Ambition NOVEMBER 2023
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