With increasing automation and a need to create a more fair and inclusive workplace, there’s a shift towards building skills-based organisations as a promising solution.
The fast-paced and uncertain world we live in today requires flexibility and agility. However, many organisations remain hierarchical, centering around jobs with distinct roles and responsibilities.
There is nothing wrong with a traditional job. Some industries demand routine jobs that perform set and measurable tasks. However, to stay ahead of the curve, we must prepare for a world where diverse and practical skills are more valuable than formal qualifications.
Many traditional organisations provide agility, growth, innovation, diversity, inclusion, and equity. However, by adopting a new approach to skills development, hiring, and management, organisations can enhance their ability to offer a positive workforce experience.
This post will discuss a skills-based organisation, how it can benefit individuals and the workforce, and some challenges in adopting this approach. We’ll also discuss how you can start to see yourself as what Deloitte calls a “workforce of one” and upskill accordingly.
What is a skills-based organisation?
To clarify what “skills-based” means, Deloitte Insights conducted a comprehensive survey and compiled a report called “The Skills-based Organization: A New Operating Model for Work and the Workforce”. In this report, the researchers discuss how people can implement skills-based hiring in various industries.
Building a skills-based organisation involves adopting a more fluid approach to work based on tasks, projects, and problem-solving. It sees people as more than employees doing a job; they are individuals with unique skills, interests, and aspirations. Instead of being limited to a job spec, workers can contribute skills to different projects and work flexibly according to their strengths.
Based on the data gathered, skills-based hiring is beneficial to organisations for the following reasons:
- greater staff retention
- better reputation as an excellent place to work
- more effective talent placement
- positive work experience
- ability to adapt and respond more quickly
- more innovation and inclusivity
What is driving this change?
The report states, “People want to work where they feel the organisation is contributing to their growth and realisation of their potential and where they feel seen, valued, and respected.”
Arguments supporting this approach include that it helps build autonomy, reduce bias, and improve accessibility. For example, people with the necessary practical skills but no formal training can compete for the same work instead of being rejected because they lack the requirements on paper (i.e. a formal degree).
Deloitte’s research shares a few examples of out-of-the-box thinking when it comes to hiring people:
- During COVID-19, furloughed flight attendants worked in UK hospitals as they had the requisite customer management skillset.
- With structured management and organisational training, military veterans can be an asset to civilian organisations.
- In a hospital environment, removing titles and referring to everyone as a “caregiver” can help to develop collaborative ways to serve patients.
By moving past siloed thinking, we can see that skills can translate into different contexts. In the case of skills shortages, becoming more flexible and agile is essential.
Skills-based organisations in a digital world
Digital transformation is driving a different approach to hiring and building organisations, as we can now gather data about people’s skills using AI. Ethical issues like privacy aside, this data can help organisations make different hiring decisions, as it’s possible to collect more dynamic information about a person’s skills than a paper CV can.
However, while skills-based organisations might sound like a good idea in theory, how do they work in practice? Deloitte Insights shares four key pillars of the skills-based organisation to explain the changes that are taking place.
1. Liberating work from the confines of the job
A skills-based approach broadens the scope of work by not limiting it to a job with strict roles and responsibilities. Workers can join projects that resonate with their strengths and abilities and work more flexibly.
This way, work becomes a “portfolio of fluid structures” that brings people together to complete tasks and projects.
2. Moving from the idea of employees to the “workforce of one”
Being a “workforce of one” allows greater autonomy and agency, enabling greater mobility within an organisation. Career growth occurs according to strengths and preferences, contributing to a dynamic talent management strategy.
This approach does not consider employees as one-dimensional cogs in a wheel. Each person offers multifaceted strengths and abilities that allow them to work across various roles. Instead of being hired to perform a specific job, people can create portfolios of offerings to complete multiple tasks and projects across departments, organisations and timescales.
3. Using skills and not jobs to make decisions
Rather than seeing work as the result of jobs, organisations look at what they need to accomplish and what skills (and people) they require to meet their goals.
By focusing on skills, we turn the current concept of talent management on its head. However, it may be a more efficient way to drive success.
4. Using a skills hub instead of traditional hiring practices
Skills-based organisations break work down into tasks and projects. Instead of using traditional hiring practices, they have an internal talent marketplace that can bring people together and not limit them to the scope of a “job”.
While all traditional jobs won’t disappear, by developing the workforce of one, you can harness the benefits of continuous growth and development. Instead of hiring people whose CVs fit the job spec, skills-based hiring focuses on finding people with foundational skills and training them further.
By creating this “skills hub”, you can source valuable talent that you might have excluded previously due to limitations about who should be doing the job.
Challenges and obstacles to skills-based hiring
Skills-based organisations won’t develop overnight, and we must overcome many challenges and obstacles before they become standard. Some of these challenges include:
- Legacy mindsets
- Difficulty keeping up with changing skills needed in the business
- Restrictive compensation practices
- Inability to move skills to business priorities
- Lack of standard skills definitions
- Insufficient skills data
- Inability to evaluate performance based on skills
- Recruiters or managers unable to source and assess skills
- Lack of effective skills-related technology
We can overcome these challenges with a shared skills philosophy, collaboration, and planning. However, organisations don’t need to change every aspect of their workforce immediately; they can start with small-scale changes and expand as they figure out what works and what doesn’t.
As one contributor to the Deloitte study mentioned, skills are only a part of human performance, and managing people consistently and fairly is an ongoing challenge. The main takeaway is that skills-based hiring aims to better understand a person’s strengths and growth trajectory and apply this more effectively to business goals.
How to prepare for skills-based hiring
We’ve discussed how skills-based hiring works and given insight into how to implement this approach in an organisation. But how does this affect you?
While organisations need to adapt, so do individuals. Instead of waiting for an organisation to help you develop your portfolio of skills, you can get ahead by developing yourself as your “workforce of one”.
At SACAP Global, we focus on equipping learners with competitive skills in applied psychology. Short online courses that you can complete to enhance your skillset include the following:
Talent management
We must rethink hiring and retaining staff to stay agile and flexible. Learn more about the importance of human resource management and employee wellbeing with the following micro-credentials:
Communication
To evolve our practices in the workplace, we need solid communication skills. You can upskill in this area with the following courses:
- Effective Interpersonal Communication
- Advanced Interpersonal Communication
- How to Have Critical Conversations
Management and Leadership Skills
Shifting towards a new way of managing people and talent takes visionary leadership. Learn more about how to be an effective leader in a business context with the following micro-credential courses:
Coaching
Implementing shifts at an organisational level starts with management. Learn more about coaching and how you can use this approach to drive change in the following two courses:
For further information, browse our course list.