A Skills-Based Organisation: Getting Past the Hype, How Can it Deliver in Practice?

At a recent industry event, we discussed the emergence of the skills-based organisation.  The reactions ranged from genuine enthusiasm for the promise of the skills-based approach, through to somewhat resigned sighs of ‘here we go again’ with the next HR fad. Others were holding judgment for now but sensing they needed to roll with it.

This set of reactions perhaps reflects some healthy scepticism about any new movement in the HR space. We’ve been here before, right? This time though I think there is the potential to make a big difference to how organisations operate, but we need to think carefully about not only what we want to achieve, but crucially the barriers to success and how we make it happen in practice.

What is the promise of the skills-based organisation?

Josh Bersin has written on this topic of the exciting but sober reality of building a skills-based organisation. The idea is that using technology we can move beyond pure jobs or roles, to understanding each person’s component skills. Using this data, we can then build an objective, unbiased organisation, where we understand everyone’s skills. This allows the organisation to mobilise talent swiftly to face new challenges in an agile way.

Definitions of what we mean by ‘skills’ are deliberately broad and seek to capture both ‘hard skills’ which are heavily knowledge-driven, as well as behaviours and other key attributes or as Bersin describes them ‘power skills’.  Deloitte’s definition is as follows:

“We broadly define “skills” to encompass “hard” or technical skills (such as coding, data analysis, and accounting); human capabilities or human skills (such as critical thinking and emotional intelligence); and potential (including latent qualities, abilities, or adjacent skills that may be developed and lead to future success). Eventually, we see the word “skills” becoming short-hand for more granularly defining workers as unique, whole individuals—each with an array of skills, interests, passions, motivations, work or cultural styles, location preferences and needs, and more.”

This view of skills is intentionally all encompassing to include the many skills that combine different areas of knowledge, behaviours, potential and motivation.  For a skills-based approach to work it needs to include a broad and inclusive view of what is needed to succeed in a task.

Key questions to address

To become a successful skills-based organisation, it is important to remember it is not a silver bullet and needs to be implemented thoughtfully.  Three key questions to address when developing your strategy are:

1. How do we best assess for skills?

There are many Talent Intelligence solutions in the market offering the opportunity to tag and track skills. Perhaps one of the key questions is how best to assess for skills? We can use secondary data to map skills, such as career information and profiles, though this is often self-reported and subjective.  As a result, it is likely to carry bias (e.g. women are less likely to show overconfidence about their skills relative to men).

As a result, there is no substitute for objective, comparable data on a person’s skills. Having the right platform to cover all the skills that matter, from technical and knowledge-based skills through to the more behavioural and human skills is key).

Further, a platform that can assess potential for vertical and horizontal moves along with an understanding of employees’ motivations is critical.  An important point here is ensuring the chosen solution provides this breadth with data all collected all in one place, rather than separate piecemeal tools.  This is vital to then provide genuine talent intelligence, based on truly reliable and objective data.

2. Can we use a skills-based approach to enhance diversity? 

A more objective approach is certainly a big improvement on traditional use of CVs, degree classifications or poorly conducted interviews, all of which can all be laden with bias.  However, moving to a skills-based approach does not by definition deliver better diversity and inclusion.

We still have to be conscious of structural inequalities, be they vertical (e.g. socioeconomic) or horizontal (e.g. between demographic groups).  Some groups have more privileged access to education, learning and development than others. We need to mindful that skills are a helpful change to support a successful EDI strategy, but only one part of the solution.

3. How do we ensure our skills data remains agile and avoids becoming deterministic? 

Like with many previous HR initiatives, it is very easy for organisations to turn everything into a process to such an extent that it is bureaucratised and becomes rigid or ineffective.  Technology can enable greater agility, but it can also embed poor practice at great scale if operated poorly.

For example, if skills assessments fail to adequately include potential, we risk exacerbating existing bias by limiting access to opportunities – the exact opposite of what we want to achieve.

Summary

To conclude, building a skills-based organisation presents opportunities for a more objective approach to managing talent, in a fairer way and more transparent way. Through this, organisations can become much more agile than previous approaches.

However, to make this a success we need both the right systems to assess the wide range of skills objectively with verifiable data, build this in as one component  of our wider EDI strategy but remember it’s not a silver bullet.  And critically, ensure it is managed and nurtured proactively so it does not become just another HR initiative, and really does support organisational agility.