How to start the journey
Transitioning to a skills-powered approach to talent management is a complex undertaking. Individual identity is often tied to a job, meaning workers may see an attempt to deconstruct roles into tasks and the underlying skills as a personal affront. Jesuthasan says that three initiatives are essential to start the journey on the right footing:
- Articulate a ‘North Star’
The CHRO, in collaboration with other senior executives, must articulate a North Star to guide the business on its journey. This involves explaining the productivity, agility, and efficiency benefits of a skills-powered approach, and how it will evolve. It must also outline how systems, processes, policies, and culture will change to support the transition.
In no more than one page, the North Star document should detail how the new structure will change the work experiences of employees, managers, and leaders. For example, employees will receive personalized training suggestions, while leaders will receive earlier and clearer signals of rising demand for certain skills.
The North Star should be the basis for securing executive-level support and individual employee engagement. “You need to show the financial benefits or this transition won’t stand the test of time,” adds Jesuthasan. “I previously worked with an organization that ditched its initiative after missing an earnings target. The program narrowly focused purely on career progression, which, while worthy, didn’t create tangible economic benefits.”
- Start narrow and shallow
It’s best to start small, demonstrate success, and then scale. Identify a discrete part of the business (narrow) that is encountering skills-related challenges and focus on that. It could be a product team that is facing surging demand due to geopolitical developments, or a finance team that needs to rethink job roles in the context of automation.
“Businesses also need to start ‘shallow,’” explains Jesuthasan. “Take a specific part of the human experience of work, whether that’s how careers are managed, how talent is acquired, or how training is undertaken, and show how an end-to-end skills-powered approach delivers value.”
- Implement the eight change enablers
Eight foundational pillars support a skills-powered organization:
- Incentivize leaders: Managers typically guard the skills within their team, conscious that they will be judged on performance against the rest of the business. Restructure incentives to encourage managers to redirect skills to where they are most needed.
- Encourage employees: Stimulate employees to engage with new work and learning opportunities.
- Support managers and leaders: Create a dedicated unit within HR to drive this transition.
- Explore AI opportunities: Examine how AI can match skills supply and demand. Find the optimal combination of technology platforms to match skills and tasks.
- Rethink governance: Define accountability for managing skills deployment.
- Change the culture: Create a culture in which employees are keen to acquire new skills and apply them to new projects and roles.
- Adjust legal and accounting processes: Change finance practices to account for work being undertaken in different teams and regions. Ensure compliance with local employment law.
- Create a skills taxonomy: Ensure that technical and human skills are routinely assessed and captured.
Organizations’ transition to a skills-powered approach should reflect their existing culture and work practices.