The Triple Threat of Skills-Based Organizations With Deloitte

What is your definition of skills? 

Starodub distinguishes between two types of skills: hard skills and soft skills.

Hard skills are those that focus on raw technical abilities, such as coding, data analysis, accounting, and so on. Soft skills with more interpersonal abilities like critical thinking, emotional intelligence, and empathy.

Starodub also defines skills that lie somewhere in between — like an employee’s potential to learn and adapt to new skills and competencies. They also cover an individual’s passion, interest, and motivation to do a task or a project.

When organizations focus on these different dimensions of skills, they better align their employees’ strengths with their broader, strategic business goals, and build a more adaptable and resilient workforce.

When you speak with organizations who are trying to get down to this granular level of skills, how do they typically roll it out?

A skills-based hiring approach challenges well-established HR practices. Traditionally, jobs have been defined by static sets of skills. For this reason, organizations often treat skills-based hiring with understandable resistance and caution.

“Jobs have been the dominating structure for organizations and making decisions about our employees and our workforce for hundreds of years,” Starodub notes. “We created the entire human resource function around the concept of a functional job having fixed sets of responsibility, in and around the job.”

Starodub says the best place to start rolling out a skills-based approach begins with a skill-gap analysis. She advises that organizations identify what skills they have access to, which ones they lack, and find the skills gaps they need to fill to achieve their business objectives.

Related: 4 Steps to Becoming a Skills-First Organization

Once you know what the skills gaps are, the next step is to make learning and development initiatives to close those gaps and develop those skills internally. Those initiatives can include training programs, upskilling opportunities, and mentorship programs.

Overall, the best way to kickstart your transition is to start small. Implement a skills-based approach with smaller teams or departments to test the pilot program before rolling it out to the rest of the company. This approach allows you to gain insight into how a potential large-scale rollout would go, allowing you to troubleshoot any problem areas, identify common questions, and develop additional resources, if needed, to ensure a smooth transition for other teams in the future. 

Trust and transparency are key parts of this process. We recommend engaging with your employees and listening to what they have to say as you test out a skills-based approach to HR. Getting their feedback helps them feel valued and involved in the process, and creates a work environment that embraces change.

What role does trust play in the rollout of skills?

Trust is fundamental to implementing a skills-based hiring approach. Organizations must build trust by making and upholding promises, being transparent, and involving employees before, during, and after implementation. When your employees trust that you have their best interests in mind, they’re more likely to participate and engage in new initiatives.

“At its core, trust is built when an organization makes good on its promises, and then delivers on them,” Straoub says. “We call these, respectively, stating a positive intent, and then demonstrating the competence to uphold that intent.”

Regular and clear communication about the goals of a skills-based approach and how it benefits both employees and the organization helps create that foundation of trust. Allowing employees to offer feedback and share their experiences and concerns ensures that they’re active participants in the process. That way, they’re more likely to take on new skill-building opportunities and apply what they learn in new and creative ways.

What role does AI play in rolling out frameworks for skills in an organization?

AI helps organizations create a responsive skills framework that adapts to their needs without requiring additional manual work. Using AI gives them a competitive edge and ensures they can adapt to change swiftly and smoothly.

But how exactly does AI do this? AI can help create a skills-based framework by automating routine tasks, allowing employees to focus on creative and strategic work. Intelligent systems can also give data-driven insights into the current skills in a workplace and identify skills gaps to be filled by either internal or external talent

Related: Workforce Planning, Skills, and AI: Oh my!

AI can also take skill identification to a new level by generating personalized learning and development initiatives or creating tailored training programs designed to fill those critical skills gaps. AI tools also support real-time feedback and monitoring, so organizations can track progress and make adjustments when they are needed.

“The simple fact is we aren’t going to be replaced by robots, but humans using AI will replace humans that are avoiding AI.” Starodub says. “We need to look at how AI is impacting skills. AI tools and applications are being used to enhance the performance of employees in various roles. That shifts the focus from manual or repetitive tasks to the more strategic and creative work that only a human can do.”

How far away are we from skills truly being adopted globally at an organizational level as the end-all, be-all? 

The transition to a skills-based approach will be gradual and vary by industry and region. Starodub believes the transition will also vary depending on the organization. 

For example, more technologically advanced industries will be able to adopt a skills-based approach more quickly. Tech startups are already leading the shift, giving them a competitive edge that’s primed for early adoption. These types of industries might adopt a skills-based framework within the next five years.

Whereas traditional industries like manufacturing, healthcare, and finance may face a slower adoption process because they must balance innovation and cutting-edge technology with regulatory and operational barriers. Starodub believes that for those industries, the process may take five to ten years. More economically advanced countries with access to AI-powered technology and intelligent resources will likely adopt a skills-based approach faster than developing economies.

Take a closer look at the best solutions for industry-specific challenges by watching Industry Week on demand here. 

“This is a never-ending journey,” Starodub says. “The shift isn’t about just simply a one-time move to a skills-based approach, but adopting that mindset and cultural behavior into all of our workforce practices, and instilling that cultural change so we have that lifelong learning and adaptability that a skills-based approach will afford us.”

Do you think organizations that are hesitant to adopt skills and technology will have a similar result as those hesitant during the dot-com boom?

Companies that were slow to embrace e-commerce and the internet during the dot-com boom often faded into obscurity. Starodub believes that organizations that are reluctant to adopt a skills-based approach risk facing the same consequences. The fast pace of technological advancement means that hesitancy can lead to significant setbacks like loss of market share, competitive edge, and relevance.

Organizations must proactively engage in upskilling and reskilling to stay competitive. Adopting a skills-based framework allows them to be more agile and resilient in the face of change while gaining insight into strategic ways to leverage existing resources across the business. Those that don’t will be outpaced by their more forward-thinking competitors.

“We know that a skills-based approach is more attractive to acquiring top talent, especially among younger generations who are prioritizing personal growth and development of their careers,” Starodub advises. “Companies who fail to focus on skills development may struggle to attract and retain high-performing employees.”

What impact will this skills-based approach have on traditional HR documents or processes like resumés, job descriptions, and career pathing? 

What you know and what you can do is becoming more important than who you know or who you’ve worked for. Traditional HR and recruiting practices will have to evolve accordingly.

Resumés will emphasize skills over chronological job history while job descriptions will focus more on core skills and competencies.

Starodub recounts a Deloitte survey of 125 HR executives in 100 businesses globally that asked how they are using skills. To Starodub’s surprise, upwards of 30 to 40% were already using skills to some extent in almost all of their HR practices — from skills-based workforce planning to performance management. 

Explore a practical approach to becoming a skills-forward organization. Watch Skills Day on demand now. 

Those elements come to the forefront of the hiring process. Candidates are using digital platforms, portfolios, and badges to showcase their skills in place of resumes.

“It doesn’t always matter where you got that skill or what organization you gathered it in,” says Starodub. “It’s a focus on the competency, the projects, and the results that you achieved through the application of that skill.”

Key Takeaways

The shift to a skills-based approach isn’t just a new HR trend, but a necessary evolution that organizations need to adopt to stay relevant in a changing job market. Here are a few takeaways from the TXL episode:

• Build trust through transparency and reliable promises to create a successful skills-based framework

• Use AI for skills assessments and personalized development to create a resilient and adaptable team

• Commit to continuous learning and adaptation to thrive as a skills-based organization

Take a closer look at how skills are evolving in your industry by downloading the State of Skills: 2024 Market Data Report.

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