At the end of 2023, I had a nagging concern that my team and I, as well as much of the talent industry, had swallowed the skills Kool-Aid and we were rushing to transition our businesses (and our clients’ businesses if you’re an advisory firm like mine) without pausing to think on whether the strategy was right. I also had a feeling that when it comes to skills, we were over-indexing on the technical skills and not prioritizing the person with their human skills, aspirations and knowledge.

So, I decided to embark on my own global research journey, interviewing skills experts and people leaders from all around the world as well as reviewing and exploring public interviews and case studies. So far I’ve spoken to, or heard from, more than 30 experts from NASA, Mastercard, Novartis, Google, Gartner, Telstra, HSBC, Cisco, Schneider Electric, Ericsson, Standard Chartered, EMAP, Randstad, Arcadis and many other organizations that deserve mention. This has stress-tested the skills strategy and helped me understand its relevance to organizations around the world.

I established the parameters of this research to remove bias and to minimize my own preconceived beliefs.

Six months in, here’s what I know about skills-based organizations and the transition to skills:

It’s Divisive

I’ve spoken to many experts who believe the skills strategy the industry subscribes to currently is flawed or possibly the wrong thing to be focused on. Google HR executive and host of Work for Humans Dart Lindsley sees skills as a distant engineering solution to a problem and is another example of companies simply tagging people so they can ‘do something with them’.

Mark Effron from The Talent Strategy Group concurs, famously stating that the “juice is not worth the squeeze”. Aaron McEwan also agrees, sharing his perspective that we should be focused on tasks and the work itself rather than skills.

Whereas Josh Bersin believes in skills but notes that organizations need to build the right culture, approach to leadership and ways of working to make it a success. Bersin is supported by the many organizations around the world already on the skills journey, including NASA, HSBC, Novartis, Mastercard, Standard Chartered Bank, Schneider Electric, Metlife, Seagate and EPAM Systems.

The polarizing opinions from many HR/talent experts who I know and trust for their deep insights and expertise led me to this conclusion:

Skills are a thing, they’re worth exploring, but they’re not for everyone.

You Need to be Ready

My research so far has shown that if an organization believes that a skills-based approach to work is right, it needs to be ready. But how do you know if a skills transition is right for your company and how do you measure readiness? Because our clients are looking for TQSolutions to help answer these questions, we have now developed a ‘skills-readiness framework’ for organizations to use and evaluate how skills-ready their business is – and even use it to compare the level of readiness across different teams and departments. This way, HR teams can identify the right divisions or business segments to run pilot programs with as they assess their organization and its readiness.

To know whether your organization is ready or not, organizations need to consider these dimensions of readiness:

• Employee mindset and engagement
• Talent practice maturity
• Leadership mindset and maturity
• Availability and access to data, and its quality
• Influence of skills shortages in the external market
• Relevance to your workforce segment(s)
• Operations and ways of working

Change Management

If testing shows low skills-readiness, an organization is likely to need to invest more in change management to improve its low-readiness areas. Our research to date shows that businesses that invest heavily in this area perform significantly better on their skills journey. We have started recommending a 1:5 ratio, which means that for every US$1 a company spends on technology for their skills transition, they must invest up to US$5 in change and communication to both improve their readiness and bring their people on the journey.

Change management investment needs to be top-down, primarily because leadership needs to own the skills journey if it’s going to succeed. Organizations that push accountability solely onto people teams won’t succeed with their skills strategy no matter what they throw at it, so assessing executive and leaders’ mindset maturity at the outset is critical followed by a strategy that builds leader muscle and capability in any areas where they are immature.

Focused Problem Solving vs Being Skills-Based

Another element our research has uncovered is that organizations that focus on how their skills journey is going to solve real business problems are the ones that succeed. And once these problems are identified, it’s imperative that they are clearly understood by leadership and what they are costing the business. When people teams can show their C-suite how a transition to skills is going to resolve these pain points, it’s much easier to get funding and engage stakeholders across the business who will be needed to champion this transition.

A great example of the results a laser focus approach can have for a business is EPAM Systems. In our interview, Sandra Loughlin from EPAM shared that their skills transition was deployed to solve their business-wide resource management issues as they needed to improve how they identified the skills of their people so they could better match these skills with what was needed to deliver great work for clients.

I have more interviews to do in the coming weeks and months, more research and more models to develop, but our research to date has already evolved my and our business’ perspective on skills and their application in the future of work. I know this evolution is going to continue until we launch our findings later in the year, but I hope these insights give you some tips and things to think about whether your business is already on the skills journey, how to identify potential problem areas or how you can prepare if your business is at the starts of its skills strategy formulation.