It also shines a spotlight on the widening skills gap. The reality is that companies can’t hire their way out of this problem. It’s time we rethink talent development, or risk being left behind in an AI-driven world.
Why traditional hiring is broken
For years, hiring strategies leaned heavily on degrees and experience. But AI has revealed a glaring truth: credentials alone don't equal capability. According to the World Economic Forum, by 2027, 44% of workers’ core skills will be disrupted by advancing technology. Yet only one in five companies has a plan to tackle this massive challenge, according to Deloitte’s findings.
Read more: How to build a skills-first HR approach
The problem with traditional hiring is that it’s reactive. The focus is on filling a role today, not preparing a workforce for tomorrow. AI is exposing these cracks in two ways. First, it’s automating many routine tasks, which means workers need advanced skills faster than ever to stay relevant. Second, it shows that the real value lies not in rigid job descriptions but in transferable skills like adaptability, critical thinking and collaboration.
Companies that fail to pivot away from degree-centric hiring models will find it increasingly difficult to compete not just for talent, but in the marketplace.
The shift to a skills-first approach
The good news is that HR can drive the shift from traditional hiring to skills-based strategies, allowing organisations to tap into a wider pool of talent internally and externally. Research from Udemy reveals that skills-focused learning improves both productivity and retention, with 63% of respondents highlighting its direct impact on business outcomes. Organisations adopting this approach also report higher employee engagement, which is a top priority for 78% of HR leaders.
Read more: Crystal Balling: How skills can help HR predict the future of work
The skills-first approach isn’t just about adding new courses or programmes, it’s about rethinking how we develop talent at every level. This can mean replacing static job descriptions with skills taxonomies that map precisely what employees need to succeed in a role, building internal mobility pathways to help employees transition into in-demand roles through reskilling, and embracing continuous learning as an everyday practice, not a one-time effort.
Put simply, a skills-first mindset turns learning into a strategic advantage, enabling teams to keep pace with technological change while fostering loyalty and motivation.
AI’s role in closing the gap
AI isn’t just making the skills gap visible, it’s also the most powerful tool we have to close it. Here’s how leading companies are leveraging AI to turn the tide:
- Personalised learning at scale Increasingly, AI-powered platforms can pinpoint an employee’s current skills, recommend targeted learning paths, and adapt training as they progress. This personalised approach removes the guesswork and accelerates upskilling.
- Overcoming skilling barriers In our research, 36% of respondents cited employee resistance as a major barrier to upskilling. AI tools create engaging, interactive experiences that can improve trust and motivation, helping to address this problem. For example, AI can recommend bite-sized training that fits seamlessly into daily workflows.
- Forecasting future needs Beyond reskilling, AI helps HR leaders anticipate which skills will matter most as industries evolve, ensuring companies stay ahead of the curve.
A warning for HR leaders
AI only works if we design it with employees, not just efficiency, in mind. From our research, 48% of organisations cite concerns about AI’s accuracy and trustworthiness, and employees are hyper-aware of how AI might impact their roles. This is where we, as HR leaders, must step up.
Read more: How can we match the UK’s skills needs to rising demand?
To close the adoption gap, we need to build AI tools that prioritise transparency and ethical design, communicate AI’s role as a co-pilot and not a replacement for human creativity and judgment, and use AI to enhance collaboration, not eliminate it. If employees trust the technology, they’ll embrace the learning opportunities it creates.
AI as an enabler and opportunity
The skills gap is no longer incremental. It’s exponential. HR leaders who see this moment as a chance to innovate will build workforces that thrive. Those who don’t will face attrition, disengagement, and a growing inability to compete in a market increasingly shaped by AI.
To lead the charge, you can start by redefining your own talent strategy, putting upskilling with AI at the centre. It’s time to stop seeing AI as a disruptor and start using it as an enabler, and an opportunity to fix a broken system.
By Karen Fascenda, chief people officer at Udemy
