When Skills, Not Jobs, Become the Currency of Work
Once upon a time, a person’s job skills often became their last name. An English cask maker might have been called John Cooper. A German with the last name “Bauer” was likely a farmer and a Spanish soldier may have gone by “Guerrero.” Such were the strong relationships between what an individual did and who they were.
Today, in our large global, nearly post-pandemic village, we’re seeing a return to an emphasis on people’s skills as a key defining principle. In fact, the COVID-19 pandemic showed just how much skill-based approaches can create agility at pace. Leading organizations are now using that experience to create resilient and more sustainable businesses. Those that can deliver skills at scale will outpace competitors and be in a better position to adapt their business and their people in periods of uncertainty. And with skill-based approaches impacting workforce ROI by better matching skills to demand, it’s no surprise that this Is on the C-suite agenda — helping them prepare for further volatility, while being a responsible employer for their people.
The paradox of our time is that the race to reskill is on, but without a clear route to the finish line. The big challenge has always been how to stay up-to-date on which skills the organization currently has in place, the skills likely needed in the future and the price of different skills clusters as they trend up and down as market demand and supply change. Without this intelligence, any strategic workforce planning exercise will be subpar. At the same time, companies are faced with exhausted employees who are tired of filling out surveys and updating profiles and fatigued HR personnel, who are done with creating competency models that expire the day they launch.
The pandemic, thankfully, has opened doors to new ways of addressing these challenges. The World Economic Forum has facilitated industry-based groups to define the most critical skills and share insights on both cross-company standards and vetted vendors to support the skills ecosystem. This is driving collaboration. In Sweden, a consortium of companies from the airline, hospitality and fast food industries came together with academics to design training programs for laid-off staff so they could find employment in the expanding health care and nursing home sectors. More of this type of thinking and innovating is needed to ensure abundant mobility for all as work, jobs and paths to prosperity continue to shift.
Transforming from a job-centric framework to one that reshapes itself around “future work” will keep organizations competitive and employees energized. And competitiveness and energy are tightly linked. Energized employees are two times as likely as de-energized employees to be excited about the prospect of reskilling and three times more likely to be satisfied with the company, with no plans to leave, according to Mercer’s Global Talent Trends study.
Achieving this level of engagement, however, requires a willingness to be transparent and communicative about job prospects, trending skills and a desire to move to a culture of learning and mobility. And this level of guidance is needed, as one in five Generation X and Y employees say they don’t know what skills they should learn to remain employed as the world of work changes. Meanwhile, employees whose companies are transparent about which jobs will change are most likely to say they are thriving today (72% versus 56%).
When done well, a company’s skills strategy becomes an essential part of their employee value proposition.
Thus, good career management for employees demands an empathetic approach and greater democratization of opportunities than seen in organizations today, despite the increased appetite to build talent marketplaces. Add AI into the mix, and the real power for change emerges as the organization can now learn from itself.
AI can help answer: What skills clusters are critical for various jobs? What skills can lend themselves to vertical or lateral moves? What skills are in demand or could catapult people into new and emerging roles? What skills are employees searching for? With talent insights driving skills taxonomies and market insights driving valuation of skill sets, organizations and individuals can now use nudges and incentives to move, reskill, build or explore new opportunities that set them onto a sustainable path to prosperity. The challenge is making this a reality — especially in organizations with traditional models of HR and talent practices built in the 90s.
Sustainable Futures for All
When skills (not jobs) become the central currency of work, this not only helps organizations adapt to the new shape of work, but helps secure futures — for workers and societies. It’s clear that responsible employers are thinking about reskilling and redeploying talent beyond business units and the organization as a whole. And a few are looking at cross-industry and cross-border partnerships. Many are implementing internal talent marketplaces to help find the right people with the right skills at speed.
This puts organizations in a better position to deal with the unknown, but represents a substantive shift in how talent is managed locally and raises tricky questions around costs and benefits as talent flows more freely toward work opportunities.
The above paints a bright picture of what could be, but the chasm between the skilled and unskilled is widening, as is the gap between organizations that are on the front foot of this trend and those on the back foot. When done well, a company’s skills strategy becomes an essential part of their employee value proposition. When done poorly, it adds to the many distractions we hear about today and further depletes worker energy.
With the potential for skills-based models to drive business growth and sustainability, building a culture of learning that will support this transition is critical — especially given that learning is the one talent trend set to stay and with the greatest potential to close the skills/unskilled chasm — for people and for organizations.