The future of work relies on skills. With the world changing at a rapid pace and jobs being molded by new technology, the importance of ensuring workforces are equipped with the right skills has moved from a HR initiative to a business imperative.

At Workday Rising EMEA in Amsterdam last week, expert speakers took part in a panel discussion about the importance of a skills-based talent strategy and how it works in practice.

Gina Sheibley, Chief Communications Officer at Workday and panel moderator, set the scene for the conversation with some data from an upcoming piece of research from the vendor.

Sheibley detailed that while 80% of HR leaders believe that transitioning to a skills-based future will be beneficial for their companies, but only 57% are actually taking the first step to achieving this goal.

Considering why nearly half of HR leaders haven’t been able to get to grips with this, LinkedIn’s VP EMEA & LATAM, Talent Solutions, Olivier Sabella said while organizations want to embrace skills-first strategies, the” challenge is execution.”

“One of the greatest barriers to performance is access to skilled talent and actually, what LinkedIn data is also telling us, is that the problem is likely to increase, with seven out of 10 skills required for jobs globally expected to change by 2030,” he explained.

LinkedIn’s own research indicated that three in four organizations “are prioritizing skills based strategies, or skills based hiring in their talent strategy”, Sabelle commented, going on to highlight the three main obstacles to achieving this goal.

Firstly, many organizations know what skills they have internally or the skills they need, meaning clarity around “workforce planning is very difficult.”

Then there is an increased difficulty and time consumption with hiring externally, he said, while the final challenge is that many organizations “don’t have effective internal mobility programs, so they can’t retrain or redeploy people.”

Sharon Etheridge, Head of People Services Strategy and Transformation at Rolls-Royce, explained that the aerospace and defense giant began with a skills-based strategy as a result of “post-pandemic talent pressures” to identify what “we needed to do differently as a company.”

“Skills were a really big answer to that, in the sense of ensuring that the employee was in the driving seat,” Etheridge told attendees.

We could get out of that an understanding of exactly what we had within the current talent within our organization, but also an ability to be able to grow that talent in the skills that are needed.”

To underline the need for a change to skills-first strategies, Sabelle highlighted how the requirements for software engineers and marketeers have changed in the past decade, having to adapt to new ways of working by learning new skills.

“The real change is the acceleration of the dynamic. The driver to that is technology and Generative AI is a huge part of that,” he said.

How to get started on a skills-first journey

There is clearly a desire among HR leaders and organizations to adopt skills-first strategies. 

Complimenting the research by Workday and LinkedIn, a recent study by online skills marketplace and learning platform Udemy found 84% of organizations have started considering how to implement skills-based processes over the next year.

The challenge, as Sabelle stated, lies in the ‘how’ rather than the ‘why’. 

Rolls-Royce’s Etheridge explained that the company started small to address a “particular need within our engineering business.”

She said the business had a history of “very narrow, vertical career paths”, which in turn was stifling the ability to “move talent to the work or the work to the talent” and get an understanding of how well-rounded workers actually were beyond just their job titles.

The company implemented a number of ‘development groups’ and used technology to allow employees to “match to gigs that would give them skills they didn’t currently have”, working in teams for around 20% of their usual hours for periods up to three months.

This allowed to them to network with employees they may not otherwise have access to and “express those skills differently,” Etheridge said. Just as crucial, she explained, was ensuring workers grasped that this was not just another management initiative, but rather a far more special opportunity.

“We deliberately tried to hold back for a while as well and make people really want it. That really helped us, because you have to have the employees on board,” Etheridge said.

“Our colleagues really need to know that there is something in it for them and see that benefit. And, actually, people leaders need to see that benefit. Because there was that business and strategic challenge, we didn’t have to convince our engineering managers.”

Democratizing opportunities for employees to learn new skills

Workday itself is no stranger to skills and the vendor’s Chief People Officer, Ashley Goldsmith, also took part in the panel discussion to showcase how the HR technology powerhouse adopted a skills-first approach of its own.

Starting its journey in 2019, the vendor used its Skills Cloud solution to take “that vast array of skills in the world of work, and distilling that into giving insights for the organization,” Goldsmith explained.

More importantly, it also showed Workday where there were gaps in its skills repertoire and helped to “surface skills suggestions to our employees”. Similarly to Rolls-Royce, Workday used ‘gigs’ to offer short-term projects to employees that afforded opportunities to learn and use new skills across the business.

It was also vital to ensure that senior leadership beyond the HR department bought into the initiative. 

Goldsmith explained that the project quickly moved from “baby steps” to a “big transformation” which necessitated support from senior management to survive: “The type of thing that we either get the senior most people in the company really excited about and bought into, or we’re probably really never going to get where we’re going.”

Etheridge added that this system had “democratized opportunities” within Rolls-Royce – around one in four (26%) of gigs are taken by women, despite the total workforce only being 18% female. At the same time, 29% of gigs are taken up by ethnicity groups, which represent 19% of Rolls-Royce as a whole.

She added that opportunities and gigs have always existed in various forms, such as mentorship programs, but that it was never “open to all” historically.

The fact that this is now open to all is a real game changer for our employees and the opportunities that we can give them. And for ourselves, because the tech also takes away our bias.”