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Growth Strategy

What you need to know about a skill-based organization

January 12, 2022
5-minute read
Emily Vo

Kaisa Savola

guy reading blog about skills-based organization
January 12, 2022
Growth Strategy

What you need to know about a skill-based organization

5-minute read
Kaisa Savola

In the present day and age, organizations must now consider a new approach to their workforce planning. This requires a shift from the fundamental job hierarchy that most organizations have utilized since early industrialization, to the process of matching individual skills to specific granular tasks that meet the company’s and individual’s need to grow.

Today's leading firms are focusing on skills rather than jobs as the basis of work and the role itself; we call this the skills-based organization.

What is a skill-based organization?  

In addition to what many are calling “the great resignation” of 2021, there has been a surge in the skill-based approach to many jobs and tasks within organizations, referred to as “skill-based organization.”


This skill-based method of planning a workforce has become very attractive to many organizations that previously would never have considered this approach to working. Why? Many organizations have experienced long-term employees quitting, higher employee burnout rates due to lack of training, or challenges finding the skill availability.

A Gartner Study shows that required skills for certain positions have risen from an average of 13.1 in 2016 to 16 in 2021. That counted as a 6.3% increase in evolving skills to meet specific roles. The report also reveals that roughly one-third of the skills required for a job in 2018 will no longer be necessary for 2021.

CEOs far and wide are concerned that the lack of skill availability will restrict their organizations’ innovation, cost, growth, and ultimately, revenue, so they are more open to a skill-based approach.

What are the benefits of a skill-based organization?

We saw the start of the rise of skill-based organizations as automation and augmentation started to replace many “traditional jobs” and a surge in the market, when Covid hit, many employees found themselves suddenly furloughed.

As roles were being replaced by machines (and even more now by computers), we’ve seen repetitive tasks become automated while high-touch tasks remain unchanged and in demand. We have seen the tasks that require workers to perform them starting to become more sophisticated, requiring highly skilled individuals or forcing less-skilled individuals to learn new techniques and “upskill” to maintain their career trajectory.

All this is basically to say that we’ll be saying “goodbye” to talent management and acquisition (a trend that emerged in the 90s ─ think: recruiting) and “hello” to skill-based sourcing models. We still don’t fully know what these will look like since the traditional recruiting process has not entirely adapted to accommodate skill-based organizations.  

But what we can say for sure is that by hiring and accessing workers for dynamic skills as opposed to static jobs, we’ll be seeing a lot more growth from organizations adopting this new philosophy. It solves the problem with technology and turnover cost in the sense that companies have standardised skill data infrastructure and a better retention approach to high-performance employees who have skills that are difficult to attract or develop.

Moreover, accessing and developing employees through their skills allows companies to build an adaptable and flexible workforce. Employees have more opportunities to grow, re- and upskill themselves, move across the organization, and learn cross-border skills, benefiting the entire organization.

How skill-based organizations are shaping the future of work?

Basing operations on skills rather than on jobs set’s a new direction for the future of work.  

You’ll start to see a more agile, tech-empowered, and democratized company come out of this fundamental change to employee management. This provides the people in the organizations with way more autonomy when it comes to their careers and more opportunities to grow as a worker. This can help with improving engagement as employees are looking for a more personalized experience and impactful growth at work, where their passions will be acknowledged, and their career paths are customized to their interests.

The organization also benefits by retaining a highly-skilled, specialized individual for a set of tasks, rather than finding the best “generalist” for the job. The skill-based organization also offers opportunities to hire junior professionals and develop them systematically and in an agile way.

This has been the theme in the freelance world for some time now. You may have heard freelancers mention attracting more clients by “finding their niche” or focusing on a single activity/program and honing their skills in that area. This is how these workers have been shaping their futures for many years, by focusing on skill-based activities.

Conclusion

Of course, there’s no catch-all solution to approaching your workforce planning. But we do know that the old hierarchical workforce model is quickly being left behind.  

Today, companies can either start hiring employees and engaging in skill-based operations or become antiquated just like traditional recruiting.  

We don’t say this to scare you but rather, excite you for the future of work that is to come! Your organization will enjoy a team of highly specialized professionals and experts working together to advance your mission, rather than a team of generalists slugging away at their day-to-day, clocking in/out, without a care in the world of the results of their efforts.  

Are you looking for a solution to access your employee’s skills data and provide them with an intuitive growth plan? We have what you need. Talbit is a people development platform that connects employees to opportunities that fit their unique skills, roles, and goals. Prepare your workforce for the future by communicating the skills needed to succeed and allowing employees to bridge the gap through personal development plans. Reach out and see the platform in action here

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