How skills-based workforce planning strategies drive success

While working with skill shortages was once considered an exceptional scenario, it’s quickly becoming standard practice for organizations in the new world of work. In fact, nearly 1 in 2 companies acknowledge that they’re currently experiencing knowledge gaps and another 44% predict they’re going to begin grappling with them in the years to come.

Although skills shortages are quickly becoming most organizations’ new normal, that doesn’t mean that working with these gaps is easy. When teams don’t have the knowledge they need, performance and productivity inevitably suffer as a result.

To avoid settling for these subpar outcomes, savvy business leaders are rethinking the way their organizations allocate and manage talent. In addition to weighing headcount and time constraints, these executives now view skills as the determining factor that influences all of their strategic workforce planning decisions.

What is a skills-based organization?

A skills-based organization is a relatively new term that Deloitte defines as “a new organizational form that places skills and human capabilities at the heart of talent strategies, creating a new operating model for work and the workforce.”

The skills-based organization is not only a fundamental paradigm shift for talent management; it also changes how work is organized. Businesses that follow this strategy look past jobs as the dominant way for organizing work and break down traditional roles into projects, gigs, and tasks based on required skills. This approach enables businesses to achieve greater agility because they can pivot and reallocate talent quickly to respond to emerging challenges in real time.

What are the advantages of implementing skills-based models?

There are 4 main benefits associated with shifting to skills-based operating models, including:

Greater agility

Skills-based organizations recognize that as consumer expectations evolve and technology advances, employees will need to hone new skills to ensure the business can meet shifting demands. By aligning workers to projects and tasks based on their competencies—rather than their job titles—skills-based organizations are better equipped to pivot and react to challenges in record time. Overall, skills-based organizations are 57% more likely to anticipate change and respond effectively and efficiently than their competitors.

Fewer silos

There’s no such thing as a rigid hierarchy in a skills-based organization. Instead, talent flows freely across the enterprise, in turn, empowering more frequent cross-functional collaboration and preventing knowledge from staying trapped within a specific department or team.

Better productivity

When work is unboxed from jobs, it empowers employees to put their skills to use across their entire company, rather than working solely within their individual departments. Skills-based organizations unlock their workforce’s full potential because everyone is encouraged to contribute to projects, regardless of which function or team owns it. Due to this shift in perspective, skills-based organizations are 49% more likely to maximize efficiency when compared to their peers that rely on job-dominant operating models.

Promote diversity and inclusion

Taking a skills-based approach to talent management often removes many of the barriers that have traditionally held employees from underrepresented groups back. When hiring managers get recommendations for who to staff on a project based on their skills—not the names on their resumes or where they went to school—leaders can feel confident that they’re empowering workers from all walks of life to grow within their company. Overall, skills-based organizations are 47% more likely to provide a work environment that is inclusive to all employees.

Why should skills be the deciding factor for workforce planning processes?

Traditionally, workforce planning processes centered around measuring how much work could be accomplished given an organization’s headcount and upcoming time constraints. However, as the pace of innovation accelerates and the half-life of learned knowledge shrinks, skills must become the foundation for all workforce planning decisions. Since only a handful of people are likely to possess the specialist knowledge needed to get key projects across the finish line, leaders must determine where this expertise lies and create pathways to reallocate talent to ensure the most qualified employees take on the deliverables that align with their skill sets.

3 steps leaders can take to implement skills-based initiatives

If you’re looking to give your workforce planning strategy a skills-based upgrade, here are a few steps to get started:

#1. Ensure your skills inventory is up to date

To implement a skills-based approach to workforce planning, leaders must recognize that they’ll need to look beyond who has the capacity and assess which employees have the skills needed to complete high-priority tasks. In the past, it was challenging to evaluate workforce capabilities because most skills information was siloed amongst various HR systems and repositories.

Rather than settling for a subpar understanding of skills, companies are harnessing tools like Gloat’s Skills Foundation to gain full visibility into all of their people’s capabilities. These systems are updated in real-time and pull from your HCM and an employee’s LinkedIn profile or CV so managers don’t have to worry about overlooking in-demand talent with needed skills.

#2. Identify segments of your workforce to reskill and upskill

Once leaders have a clear picture of the skills within their workforce, they can begin to pinpoint where their organizational knowledge may be falling short of industry standards. Instead of guessing which skills will become more important in the new world of work, skills intelligence tools like Gloat’s Skills Foundation harness data from proprietary sources such as market information and customer aggregates to understand trending and declining skills and supply and demand in different markets.

#3. Empower everyone to continue honing their skills

Beyond acquiring skills through external hiring, employees should be encouraged to develop their expertise so they can take on new projects within their organizations. To prevent knowledge gaps from holding people back, HR leaders should ensure their workforce has the chance to participate in experiential learning opportunities that will enable them to build on-the-job expertise. By generating suggestions for projects, gigs, and mentorships based on the skill gaps your business needs to close, talent marketplaces increase access to high-priority skills development opportunities.

To find out more about the tools and frameworks you can use to put skills at the center of your workforce planning strategy, check out our guide to becoming a skills-based organization.