What is a skills-based organisation?

What is the definition of a skills-based organisation?

A skills-based approach is a model where skills are as important as jobs, education and experience when it comes to making decisions about work and talent management. These include technical skills, behavioural skills (such as emotional intelligence and problem-solving) and potential (latent or adjacent skills that can be developed for future success). 

Skills data is collected, structured and validated so that organisations have a clear picture of the specific blend of skills required for success in specific roles (a role skills profile) as well as an accurate understanding of the skills possessed by individuals (a personal skills profile). 

In a skills-based organisation, employees can be selected, evaluated and promoted based on their skills and performance, and encouraged to continuously develop and improve the skills they have. By focusing on a person’s skills in addition to their history or qualifications, it means workers can be managed and developed according to the needs of the organisation and the strengths of the employee, rather than because of a predefined career pathway. 

A key objective of a skills-based organisation is to build a more adaptable and resilient workforce that can quickly respond to changing business needs and challenges. And this is why skills-based organisations are in a perfect position to respond to the skills crisis. 

What are the benefits of skills-based organisations?

The benefits of a skills-based organisation are numerous.

• Employee engagement and retention. Employees are more engaged and motivated, as they are recognised for the skills they have acquired and given the opportunity to develop their skills and take on new challenges.
• The workforce is more versatile and adaptable. Employees are able to work in different roles and departments, which increases the organisation's flexibility and ability to respond to changing market conditions. Gartner predicted that nearly 33% of skills required in 2018 will no longer be needed in the market five years later - this need for skills flexibility and adaptability is more important than ever.
• The organisation is more efficient and effective. Because employees are able to perform a wider range of tasks and take on more responsibilities, this reduces the need for specialised positions and increases the overall productivity of the organisation. 

Other benefits include: 

• Increased productivity. With skills-based organisations identifying more suitable candidates, and providing their employees with more positive workplace experiences, it’s little surprise to learn that staff are more likely to meet their performance requirements. Data from McKinsey has indicated that hiring for skills is five times more predictive of job performance than hiring for education and more than two times more predictive than hiring for work experience.
• Greater innovation: A workforce with diverse skills and a culture of continuous learning is more likely to drive innovation. By fostering an environment that encourages knowledge sharing and collaboration, skills-based organisations can develop new products, services, and solutions at a faster pace.
• Stronger employer brand: A skills-based talent management strategy signals an organisation's commitment to employee development, which helps attract top talent and build a positive employer brand. By positioning themselves as a skills-based organisation, companies can differentiate themselves in the competitive labour market and attract the best and brightest candidates.
• Greater workforce diversity. Skills-based hiring provides an authentic route to equality of opportunity and many underrepresented groups without ‘traditional’ credentials on their resumes would benefit from greater opportunities. For instance, the World Economic Forum estimates that if companies hire for skills over traditional experience, the talent pool of women would increase by 24% more than men globally in jobs where women are underrepresented. 
• Improving social equity. By removing the likes of four-year degrees from job requirements, a skills-based approach can accelerate career mobility and reduce barriers to entry into corporate career roles. This encourages non-traditional career paths and supports economic equity by improving access to higher-earning jobs. Organisations such as Delta Airlines have championed the skills-first approach as a way of improving equity.  
  

How do you create a skills based organisation?

To create a skills-based organisation, there are several key steps that need to be taken. Firstly, the organisation needs to identify the key skills that are required for success in each role. This should use multiple sources of insight including manager feedback, industry data and employee surveys.

Once the key skills have been identified, the organisation needs to create a structure that enables employees to develop and utilise those skills and managers to define activities and roles in the context of these skills. This may involve creating new roles and responsibilities, or redesigning existing roles to incorporate a broader range of skills. 

To create a culture that supports a skills-based organisation, the organisation needs to communicate the importance of skills development to its employees. This includes encouraging employees to identify the skills they have, provide transparency on the skills they and the organisation are likely to need in the future; and support employees with taking on new challenges to develop their skills. The organisation also needs to create a feedback loop, where employees can provide input on their skill development needs and the organisation can respond by providing the necessary resources and support.

Spotted Zebra - making the skills-based organisation a reality

At Spotted Zebra, we are powering the transition from career pathways to agile, skills-based organisations. We provide the platform to power skills-based organisations.  

People now move around as much as they move up, and the ascendance of an agile workforce is compelling every organisation to design work around people, not processes. Skills are taking the stage. Today, the best organisations align people to values, hiring and developing people based on the unique set of skills needed for success in each role in the organisation.

The Spotted Zebra platform ensures skills are the centre of every people decision. Whether talent acquisition, talent development or internal mobility, Spotted Zebra focuses on skills.

Spotted Zebra does this through its contextualised skills cloud, embedding your values and language alongside our science to ensure each people decision you make drives future performance. It then provides a suite of applications that work across every phase of the talent lifecycle. Whether you are hiring, thinking about development or promoting internal mobility, Spotted Zebra has created an application that puts skills first and makes the skills-based organisation a reality.

If you'd like to review your strategic workforce plan, our experts are available for a Skills Strategy Lunch and Learn. Click here to learn more and reserve a session for you and your team.

FAQs

1. How can companies effectively collect and validate skills data to create accurate role skills profiles and personal skills profiles?

Companies can collect and validate skills data using a multi-faceted approach that includes the following methods:

• Manager feedback: Managers can provide insights into the skills required for specific roles based on their direct experience and observations.
• Employee surveys: Employees can self-report their skills and provide feedback on the skills they believe are necessary for their roles.
• Industry data: Analysing data from industry reports and benchmarks can help identify common skills and emerging trends relevant to the organisation's field.
• Job specifications: Reviewing and updating job descriptions to reflect the current skills needed for each role.
• Occupational psychologists: Engaging experts to conduct in-depth analyses and develop detailed skills profiles.

Once collected, this data must be structured and validated to ensure accuracy. This involves:

• Data standardisation: Ensuring that skills are consistently defined and categorised across the organisation.
• Verification: Cross-referencing self-reported skills with performance evaluations, peer reviews, and objective assessments.
• Regular updates: Continuously updating skills data to reflect changes in roles, industry standards, and employee development.

2. What challenges might organisations face when transitioning to a skills-based model, and how can they overcome these challenges?

Transitioning to a skills-based model can present several challenges:

• Resistance to change: Employees and managers accustomed to traditional hiring and promotion practices may resist the shift. Overcoming this requires clear communication about the benefits of a skills-based approach and providing training to help them adapt.
• Integration with existing systems: Existing HR systems and processes may not be designed to handle skills data. Organisations can overcome this by investing in new HR technologies that support skills-based management or upgrading existing systems.
• Consistency in skills assessment: Ensuring consistent and fair assessment of skills can be difficult. Implementing standardised assessment tools and regular training for evaluators can help maintain consistency.
• Identifying skills gaps: Accurately identifying current and future skills gaps requires comprehensive data analysis. Using advanced analytics tools and engaging with industry experts can aid in this process.

3. How does the Spotted Zebra platform specifically support the transition to a skills-based organisation, and what features does it offer?

The Spotted Zebra platform supports the transition to a skills-based organisation by providing a comprehensive suite of tools and applications designed to manage skills data effectively across the talent lifecycle. Key features include:

• Contextualised Skills Cloud: This feature embeds an organisation’s values and language alongside scientific data to ensure that skills assessments are relevant and aligned with the company’s goals.
• Talent acquisition: Tools for skills-based hiring that help identify candidates with the necessary skills or the potential to develop them, rather than focusing solely on their educational background or previous job titles.
• Talent development: Applications that support continuous skills development by identifying skills gaps and providing personalised training and development plans.
• Internal mobility: Features that facilitate the movement of employees within the organisation based on their skills, allowing for more agile and responsive workforce management.
• Performance management: Tools for evaluating and promoting employees based on their skills and performance, ensuring that talent decisions are data-driven and aligned with organisational needs.

By integrating these features, the Spotted Zebra platform helps organisations build a more adaptable and resilient workforce that can quickly respond to changing business needs and challenges.

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