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Four insights into the skills-based future of talent management

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As employers navigate a changing world of work, there has been an increasing focus on agility and creating an adaptable workforce. Putting skills rather than jobs at the centre of the labour market is one way to do this, but how can it be achieved? Millicent Machell reports

Focusing on skills as a strategic advantage is not a new trend for UK businesses. But thanks to the rapid evolution of HR technology and AI, it’s becoming a lot more commonplace.

For years, jobs have been the dominating structure in how we talk about work. But organisations wanting to focus on agility, growth and innovation, are moving to a whole new operating model for work, one where the workforce places skills rather than jobs at the centre.

This involves using technology to map the skills existing staff have, diagnosing any skills gaps, and hiring and deploying staff based on their skills and potential.

In our latest HR Lunchtime Debate in partnership with Eightfold AI and SAP SuccessFactors, a panel of experts discussed what a skills-based future would look like and how HR can navigate the transition.

Here are four key suggestions from the discussion.


1. Create a joined-up recruitment strategy

There is currently a large gap between job descriptions and the reality of people’s jobs, according to Jason Cerrato, senior director of product marketing at Eightfold AI.

According to research from Deloitte published in 2022, 63% of current work being performed falls outside of people’s core job descriptions.

Read more: Job design needs a health-check: Part 1

Cerrato said: “Work is at a point that is changing so fast that job descriptions are always lagging behind. The fast-paced nature of the way work is getting done, how jobs are being achieved, the type of workers being used, is changing so rapidly that job descriptions aren’t as reliable as they used to be.

“Hiring managers often can’t keep up with this, because the way the manager did it before will often be different to how the worker is doing it today.

“However, we now have technology that gives us greater ability to process granular data and skills information which can give us a deeper understanding of work and the way it is being done. This will make job descriptions a lot more accurate to what the role looks like in practice.”


2. Skills over titles

Donald Ross, head of talent intelligence, learning and engagement at SAP SuccessFactors, said skills-based organisations will not be bound to job titles.

He said: “Most organisations sit in a hierarchy that is dictated by those titles. But the work I do is in dynamic teams that come together for projects or fellowships. This helps drive internal mobility at SAP and has been one of our biggest transformations.

“The idea is you can get the people with the right skills in the right place at the right time to get a particular piece of work done.

“We use a talent marketplace to find members in the team who would actually be best suited to a project, rather than relying on a manager’s bias and relationships with employees to decide.”

Cerrato added that focusing on skills, rather than job titles, will also improve diversity, equity and inclusion (DEI).

He said: “From a DEI perspective, people often setting up unnecessary barriers and requirements. If we know what skills people have, and what skills are needed for a project, we can break down some of the barriers and find people who have the aspiration to use or develop these skills within teams globally.

“We can ask, does this person have adjacent skills, or is there room for training?

“We’ll be able to accurately find out people’s skill level, how much they are using those skills, and if their skills are truly recognised in the team.”


3. Human involvement in skills mapping will always remain

Creating a skills-based future will be possible through technology, but HR must remain involved, according to Ross.

He said: “AI will be in the toolbox but humans must be involved. As with anything else involving AI, we need to centre on ethics. For many that includes workers' councils. They often have very strong opinions about AI and reevaluating how we use this tech.”

Read more: Four lessons on ethical AI use in recruitment

Jo Regan-Iles, chief people officer at AT Management, added that employees should remain informed of how new AI systems will affect them.

“In HR, we are always looking for technology to help us on our journey towards utilising skills better. Technology is ultimately the key to having visibility for skills within an organisation. But organisations must share what they’re trying to do with employees and be open with what’s going on and what data is being used.”


4. Agile workforces will be the key to success

Cerrato said the entire labour market is likely to centre more on skills in the future.

He said: “While historically we have talked about a supply and demand of people to jobs, with dynamic skills-based teams, we can talk about supply and demand of skills to work. Which is a much-to-many situation.

“When you understand your needs at that level and understand what your in-house talent can do, it is so much easier to pivot and remain agile. This is especially at a time of fast-paced change, when the work we need to do tomorrow is increasingly mysterious.”

Regan-Iles said skills-first organisations will be better equipped to adapt as the workforce evolves.

She said: “The more agile your workforce is, the better prepared you are for the future of work. This is about what you need now and what you will need in the long term, and building your team strategically around that.

“With a skills-based model you can have clear processes for the reskilling and redeployment of employees, as well as looking at high potential for skills within your employees. So, all of this can really help with retention and creating a really resilient workforce.

“Being skills-first also makes it that much easier to evolve. Companies that don’t embrace this will get left behind.”


This article was first published in the November/December 2023 print issue. Subscribe today to have all our latest articles delivered right to your desk. 

For those who missed the event, the webinar is available on demand here, along with HR magazine's other webinars.