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The big skill
In today’s highly competitive business environment, continuous innovation and agility are strategic imperatives. Current market conditions make it unrealistic to accept the business status quo, and chances are whatever organizations did to become successful today won’t fuel their success tomorrow.
So, how can organizations prepare for a future that is difficult to define?
To enable agility and maintain competitiveness, organizations must shift from understanding the unit of work in terms of fixed, static jobs to reimaging it in terms of a dynamic landscape of skills that can be agilely deployed to work as it continuously evolves. This new organizational form, what we call a “skills-based organization,” or SBO for short, places skills and human capabilities at the heart of talent strategies, creating a new operating model for work and the workforce. SBOs fuel a wide range of talent strategies and business decisions, creating continual adaptiveness and unlocking the full potential of the workforce.
The beginning of something new
What happens when we flip traditional talent strategy orthodoxies from what we thought was important to what we now know is irrefutable?
Imagine a world in which, instead of assigning workers to projects based on reporting lines or jobs, they are matched to projects based on their interests and skills. A world in which people no longer rely on job postings or word of mouth to find their next opportunity, but instead are served up customized opportunities based on their unique portfolio of skills.1 A world where, in the flow of business, leaders have real-time insight into how their current workforce’s capabilities enable both work processes and business outcomes. In this new world of work, workers are valued and rewarded for their skills and how they apply them to create organizational value rather than for their title, level, or educational degree. SBOs architect a human-centric future by understanding what the workforce brings to the table today and proactively equipping them for success tomorrow.
Since the advent of the Second Industrial Revolution, we’ve relied on jobs as the building block of our talent processes. Think about talent strategies in organizations today. Compensation is based on job roles, HR systems are configured around job profiles and job families, resumes and job analyses are used in hiring, and succession pipelines are built around filling jobs. The problem? Jobs are not easily changed, nor are they developed with organizational outcomes in mind. They’re designed to support bureaucracy, structure, standardization, and efficiency. Simply stated, jobs are developed agnostic of talent and take a cold, calculated view of employees as simply cogs to fill voids in organizational charts.
Shifting to an SBO makes work better for humans and humans better at work. And it is far more fit for purpose in a world that prizes innovation and speed over efficiency—enabling organizations to quickly source talent to support a new strategic objective, for example, or rapidly pull together the right mix of diverse skills in a team that will spark innovation.
The time is now
For years, we’ve looked to skills as a way of unlocking employees’ potential, paving the way to bring their full set of capabilities to the work they perform, the problems they solve, the ideas they generate, and the businesses they drive.2 Despite readily acknowledging the need for an adaptable framework by which employees can contribute, shifting to a shared approach across the organization regarding the value and prioritization of skills as the “red thread” that redefines all talent management practices still represents a sea change from the way things have been done to the way things must be done today.
This need to create more agile, worker-centric work is now paramount. What was a slowly growing sentiment has been accelerated exponentially. The need for organizational agility and resilience spotlighted by the pandemic, digital transformation’s disruption of jobs and tasks, and the need to access and retain skills amid the “Great Resignation” has put skills front and center.
Sidebar: Skills at the center unleashes value for all
Shifting the talent management focus from tightly constrained job roles to skill profiles paves the way for numerous positive organizational and workforce outcomes.
Activating your SBO
Building an SBO means creating a shared approach across the organization regarding the value and prioritization of skills and how they inform key talent decisions, supported by a common and integrated suite of tools that enables organizations to sense evolving skill needs, track and evaluate skill levels in their workforce, match skill supply and demand, and develop and grow both organizational and talent capabilities.
Putting skills at the center of your talent operations to enable agility means:
It’s a skills world
SBOs represent a fundamental paradigm shift not only for talent management but also for the future of work and how it is organized. As organizations attempt to adapt to an ever-changing marketplace, transforming into a dynamic, employee-centric SBO will unlock trapped value, unleashing greater agility, engagement, productivity, growth, and innovation.
1 Ryan Roslansky, “You need a skills-based approach to hiring and developing talent,” Harvard Business Review, June 8, 2021.
2 Erica Volini, Jeff Schwartz, Kraig Eaton, et al., “The social enterprise in a world disrupted: Leading the shift from survive to thrive,” in 2021 Global Human Capital Trends, Deloitte Insights, December 9, 2020.
Michael is a principal in Deloitte Consulting LLP with more than 20 years of experience, working with organizations on key transformational programs. Within the Human Capital practice, he leads the Workforce Transformation offering, helping clients with learning transformations, workforce planning, workforce experience, becoming skill based, in addition to other workforce-related issues. He is well published in the field of learning and talent, and is the leading market voice on becoming a skills-based organization. He is an author for Deloitte’s Human Capital Trends research and report, co-leading the report in 2023 – the largest global report, of its kind, in market.