Why Should Organisations Move Towards Skills-based Strategic Workforce Planning

And what is stopping them? Discover the advantages of the skills-based approach.

Strategic Workforce Planning with skills

The pandemic has been a ubiquitously disruptive force across many spheres of life but one of the hardest hitting areas has indisputably been the workplace. As Mark Whittle, VP advisor at Gartner states "As organisations move from their initial pandemic response to more sustainable operations, they try to build resilience into everything, from strategy to work design, so as to enable the organization, its leadership, and employees to sense and respond to change repeatedly."

With this need for adapting to rapid workforce evolution becoming increasingly apparent, but also unavoidably necessary, that we start looking at the workforce in a new light. And that’s where skills-based Strategic Workforce Planning comes into the picture.

What do we mean by skills-based Strategic Workforce Planning?

Skills-based Strategic Workforce Planning has recently surfaced in conversations surrounding talent management replacing its predecessor function-based Strategic Workforce Planning. Most simply put, skills-based Strategic Workforce Planning is understanding one’s workforce as the sum of its parts rather than its parts. What I mean by this is understanding each individual as a composition of skills rather than viewing them as their one overall function.

Two network engineers, for example, might have different skills that allow them to perform in their role; using skill-data, a measurement of what people can do, rather than what they are, allows for much more granular analysis of capability within an organization and therefore greater agility in reactions to change.

Function-based vs Skills-based

What are the advantages of skills-based Strategic Workforce Planning when it comes to transforming workforces?

Strategic Workforce Planning should be informative. Using skill data allows for the identification of needs and where to look for the solution. A skill ontology allows organisations to define and measure relationships between skills. This helps create a common language to bridge the gap between jobs and people. A skills-based Strategic Workforce Planning strategy can influence organisations ability to adapt in two crucial ways:

1. Understanding disruption

A skills-based SWP allows better insight into how the workforce is changing.

Understanding disruption of jobs and roles

Gartner Talent Neuron data shows that the number of skills required for one single job is increasing by 10% every single year as well as revealing that one-third of the skills present in an average 2017 job posting won’t be needed by the end of 2021. This mere fact shows how having an understanding of skills is becoming an increasingly urgent necessity. Indeed, we can also see from the above diagram how job titles alone no longer capture the changes in requirements that jobs are experiencing. This is seen particularly acutely in Gartner research which states that a large percentage of employees are learning outdated skills for the positions to which they are applying.

Being able to measure how skills are changing gives companies increased predictive power in being able to extrapolate the direction in which disruption is taking them, making them more agile. More importantly, however, an understanding of one’s skill set is incredibly empowering to an individual within a workforce - viewing your own skills as a currency can not only serve to better inform management but gives employees a tangible understanding of their own value proposition.

2. Reacting to disruption

Armed with this newfound understanding of skills within an organisation and how requirements of skills might change, the ability to identify and fill skill gaps invariably grows. Mapping out skills in this way allows skill adjacencies to be identified.

Reacting to disruption of jobs and roles

Lateral redeployment can occur when there is enough of a skill overlap meaning that one ‘function’ can be seamlessly transitioned into another as we can see through the above move from a network to cybersecurity engineer. Any missing key skills can be upskilled which serves to better the individual skill sets and allows a vacancy to be filled with an internal candidate, saving costs.

Skills-based SWP is a no brainer - or is it?

If skills-based SWP has so many advantages, why aren’t all organisations using it? Bersin tells us that HR has a ‘dirty little secret’, this being that HR tech is harder to implement than ever. The main reason behind this is a lack of access to employee skill data. Obtaining accurate skill data, however, is an expensive process, and maintaining a recent skill inventory is even more difficult. A Mercer study found that only 2 in 5 HR leaders felt that they had a clear idea of their workforce’s skills.

Adoption across the organisation is also a crucial hurdle. To deliver the full story, employees need to have ownership over their skill profiles and their implications. The assumption that employees will happily ‘skill jump’, upskill and may eventually end up doing a completely different job to their job description from four years ago is one that can’t be easily made.

With companies being forced to be more flexible and approach talent management creatively, the foundations are being laid to move to skills-based SWP.

Opportunities on the horizon

Luckily the status quo has been challenged and the pandemic may provide the perfect opportunity to launch the SWP initiative. By disrupting economic activity and fast-tracking digitisation, new opportunities for online learning, redeployment and reemployment are being created. Crises are famously known to be inflexion points for widespread change; with companies being forced to be more flexible and approach talent management creatively, the foundations are being laid to move to skills-based SWP.

A recent survey by Insight222 with 34 global companies on the current and future state of SWP found that 90% of them expressed a desire to build a skills-based SWP process.

And with new technologies using automation and artificial intelligence, the feasibility of effective skills-based Strategic Workforce Planning is within their grasp.

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