4 Steps to becoming a dynamic skills-based organization

Why skills need to be at the center of your HR strategy

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By Nicole Schreiber-Shearer, Future of Work Specialist @ Gloat

February 24, 2022

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The bar is high for 21st-century organizations. Businesses need to respond to disruption near instantaneously, and the pace of change is only getting faster. To stay ahead, we’re seeing work get unboxed from jobs and deconstruct into smaller pieces as workforce pixelation gains momentum.

These changes are part of a much larger shift. Leaders recognize that agility is a requirement to thrive in their next chapter and that agile enterprises are fueled by skills. As a result, the concept of skills-based organizations is now dominating talent management discussions. It has been called out by Deloitte as a transformation that will “unlock trapped value, unleashing greater agility, engagement, and productivity, growth, and innovation.”

But while the concept of a skills-based organization may be the newest workplace buzzword, what does it take to put skills at the center of your strategy? And what frameworks and tools do leaders need to embrace for their businesses to successfully shift to a skills-based approach?

What is a skill-based organization?

Since the skills-based organization is a relatively new term, there’s a lot of uncertainty about what it means. Deloitte defines it 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 instead break down traditional roles into projects, gigs, and tasks based on the competencies they require.

This approach enables skills-based organizations to achieve greater agility because they can pivot and reallocate talent quickly to respond to changes in real-time. However, while unboxing work from jobs is a massive leap forward, there’s still room–and a crucial need–to take skills-based approaches one step further.

The most innovative enterprises recognize that work isn’t only rooted in their workforce’s skills and capabilities. Dynamic factors such as reshuffling valuable skills combinations, evolving employee interests and ambitions, and changes in business needs must be taken into account when designing skilling strategies. Thus, businesses that want to lead the way in responding to work’s ever-changing landscape must strive to become what we refer to as “dynamic skills-based organizations.”

Why dynamic skills-based organizations will come out on top

Dynamic skills-based organizations set aside traditional operating models and “tried-and-true” strategies and begin to reimagine work and workforces. As a result, they benefit from several game-changing advantages:

Greater agility
Dynamic skills-based organizations recognize the constant supply and demand changes fueling the skills imperative. On the demand side, businesses need dynamic workforces that can build skills quickly. And from a supply perspective, employees have more choices than ever before. By understanding how marketplace dynamics come into play, these organizations can pivot and respond to change in record-breaking times.

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

Better productivity
When work is unboxed from jobs, employees can put their skills to use throughout the entire organization. Thus, dynamic skills-based organizations unlock their workforce’s full capacity because employees are encouraged to contribute to projects owned by various departments.

How to become a dynamic skills-based organization

Given the multitude of competitive advantages, it’s easy to understand why businesses are striving to become dynamic skills-based organizations. Here are a few steps to get started:

#1. Prioritize experiential learning
In an ever-changing world like ours, employees need the opportunity to constantly and dynamically build new skills. L&D content is a strong foundation for upskilling and reskilling, but it must be paired with hands-on learning experiences like projects, gigs, and mentoring for maximal impact. By aligning employees to roles based on skills, interests, and future ambitions, talent marketplaces can power experiential learning for dynamic skills-based organizations.

#2. Take advantage of talent marketplaces
Once dynamic skills-based organizations deconstruct work into smaller pieces, they need a mechanism that enables these segments to move and organize fluidly. This is where a two-sided platform like a talent marketplace comes into play. The technology matches employees to projects, gigs, and mentorships based on their skills, ambitions, and capacity.

#3. Integrate the third dimension of skills
Many leaders are taking a two-dimensional approach to building skills. If you fall into this category, you probably analyze the skills your business needs and find talent–internal or external–to develop or contribute these capabilities.

But this inventory mindset doesn’t work in our dynamic world. There’s a third dimension that leaders need to look out for: change over time—applied to both your organization and your people. Over time, the skills your business needs, the combination of skills required in specific roles and individuals, and your peoples’ interests will change. You need a tool that can continuously re-match and re-align as your business evolves.

#4. Update the employee lifecycle
Additionally, dynamic skill-based organizations need to start viewing the employee lifecycle differently. Instead of looking at a worker’s journey as “attract, develop, retain”, dynamic businesses view it as “access, grow, connect”. Throughout each stage of this new lifecycle, the focus has shifted from merely acquiring and developing talent to gaining skills visibility and promoting talent mobility.

As stakes and expectations rise in the new world of work, only dynamic skills-based organizations will be able to unlock the agility needed to keep up with the rapid pace of change. If you’re looking to learn more about what it takes to put skills at the center of your strategy, download our ebook: The ultimate guide to the skills-based organization.

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