Unveiling the strategic importance and benefits of skills-based talent strategy
Table of contents
- Investments in skills-based talent strategy
- Skills-based talent strategy use cases from HRForecast
- Transparency on global labor market skills to inform strategic workforce planning decisions
- Transparency on skills structure through strategic skill management
- Big data for better strategic skill management
- Future profiles & labor market analytics
- Better recruiting and talent development strategy through macroeconomic insights
- Wrapping up
Organizations gravitate towards skills-based talent strategies in the digital transformation era and evolving work landscapes, fostering continuous learning and capability mapping. According to St. Charles/NIIT’s survey, various companies use approaches in navigating this transition, responding to operational and talent-driven business drivers. Central to a skills-based talent strategy is a value chain that integrates crucial processes, including talent acquisition, workforce planning, and learning development. Below, we will delve deeper into the nuances and benefits of adopting a skills-based talent strategy.
Investments in skills-based talent strategy
Here are some of the biggest examples:
- JPMorgan Chase has augmented their workforce upskilling plan by contributing an additional $350 million to the existing $250 million.
- Amazon is allocating over $700 million towards providing skill-enhancement training to its staff.
- Google planned to invest $1 billion in training and career development for U.S. residents through the Grow with Google initiative. And right after them, Apple announced their plans to establish a $1 billion fund to promote manufacturing jobs within the U.S., complemented by additional plans to finance coding workshops.
- PwC is dedicating $3 billion to enhance the skills of its entire 275,000-person team over the forthcoming three to four years under the initiative named “New World, New Skills.”
What’s the essence of such large investments?
Research from the World Economic Forum’s Future of Jobs Report in 2020 found that:
- By 2025, 85 million jobs could be replaced by machines, but 97 million new roles may emerge based on the new division of labor between humans and technology.
- 50% of workers will need to reskill by 2025.
- 40% of these workers will require reskilling programs of up to six months to transition to their new role.
- Workers remaining in their roles require significant upskilling, with the share of core skills set to change by as much as 40% by 2025.
Thus, companies that invest in the skills-based talent strategy are many times more successful and productive than those that don’t. LinkedIn’s 2018 Workplace Learning Report showed that 94% of employees indicate they would remain with their employer for a more extended period if the company were to invest in their career development.
The essence of skills-based talent strategy through the examples
Organizations across the globe have begun to recognize the indispensable value of a skills-based talent strategy. This approach enables companies to navigate the waves of digital transformation adeptly and nurtures an environment where employees can evolve in tandem with emerging industry demands.
IBM, Google, AT&T, General Electric (G.E.), Amazon, J.P. Morgan, Infosys, and Unilever are exemplary flag-bearers in employing a skills-based talent strategy. These organizations have embraced the paradigm shift from a qualification-centric hiring and talent development model toward a skill-centric one.
For instance, IBM values skills over degrees, often employing individuals based on their technological prowess and relevant capabilities rather than formal education alone. On the other hand, Google has crafted career certificates to qualify individuals for high-demand roles without necessitating a traditional college journey.
Similarly, Amazon has made a laudable commitment to upskilling 100,000 employees through its “Upskilling 2025” program, ensuring its team is equipped with the skills to navigate future roles and responsibilities. In parallel, General Electric fortifies its talent via its corporate university, Crotonville, and by laying down a digital industrial blueprint to guide its workforce through digital transformation.
Adopting skills-based talent strategies, as exemplified by global leaders like IBM, Google, Amazon, and General Electric, underscores a transformative shift in talent management, focusing on practical skills and continuous learning over traditional credentials. This strategic pivot empowers organizations to thrive amidst the digital upheaval. It cultivates a resilient, adaptable workforce aligned with the ever-evolving demands of the modern business landscape.
Skills-based talent strategy use cases from HRForecast
The real-world application of skills-based talent strategies can be observed across industry leaders, demonstrating significant benefits in employee retention, satisfaction, and continuous organizational growth. Below are some prominent use cases that showcase the efficacy of this forward-thinking approach:
Transparency on global labor market skills to inform strategic workforce planning decisions
In pursuit of its vision to lead in science and technology, Merck Group faced the challenge of aligning its workforce with strategic “must-win” business areas. Collaborating with HRForecast, they embarked on a market intelligence analysis, encompassing competitor benchmarking, insights into the future workforce, and the evolution of job profiles. This comprehensive approach gauged Merck’s competitive standing and forecasted the impact of new technologies on essential roles, skills, and future work modalities.
The project’s success hinged on an intricate blend of data analytics, market understanding, and predictive insights, leading to strategic, actionable recommendations. As a result, Merck Group gained a valuable perspective on current and future labor market trends, enabling the translation of business objectives into innovative work styles, addressing skill gaps, and devising robust workforce plans.
Transparency on skills structure through strategic skill management
In an industry where change is the only constant, Lufthansa Systems Hungary partnered with HRForecast to navigate the evolving skill landscape, future uncertainties, and a competitive labor market inherent in the IT sector. Their collaborative project aimed to elucidate the current skill inventory, anticipate future competencies, identify impending skill gaps, and devise precise strategies to bridge them. The project’s culmination provided Lufthansa Systems with pivotal insights into their workforce’s skill structure, unveiling future-fit and latent skills and trend coverage. Additionally, it offered a clear view of the local labor market’s landscape, competition, and costs, thus forming a solid foundation for informed decision-making in recruitment and talent development strategies.
Big data for better strategic skill management
Facing the future, Continental, a paramount German automotive manufacturer, used big data to critically analyze and realign its existing skill structure with the imperatives of its future business model. The process illuminated risks and potentials within the skill landscape, leading to simulated scenarios of future workforce structures and explicit identification of skill transformation needs. This strategy epitomizes the profound impact of a data-driven, skills-based talent approach in preparing organizations for future challenges.
Future profiles & labor market analytics
Wacker Chemie AG, determined to future-proof their engineering job profiles, sought to assess the longevity of existing roles and unearth industry best practices. The ambition was twofold: foresee the evolution of roles in mid-term (up to 5 years) and long-term (approximately 10 years) scenarios and comprehend competitors’ sourcing strategies alongside global skill availability. This foresight necessitated clarity on future skill relevance, the impact of emerging trends and technologies, competitive skill demands, sourcing discrepancies in the chemical industry, and the geographic distribution of key skills. The subsequent data evaluation provided a detailed industry picture, enabling the identification of insights and future trends specifically relevant to the Telecommunications/IT sectors. These analyses culminated in strategic recommendations, honing Wacker Chemie’s recruiting and development strategies.
Better recruiting and talent development strategy through macroeconomic insights
HanseWerk recognized the need for a dynamic HR strategy to secure talent that would sustain technological advancement. Collaborating with HRForecast, HanseWerk refined its recruiting and talent development strategies, enhancing job profiles to attract superior talent and utilizing competitor benchmarking to understand the labor market and the energy sector’s trajectory. The strategy involved:
- Meticulous competitor analysis.
- Leveraging AI algorithms for future trend detection.
- A thorough evaluation of job demand and skill requirements.
This initiative equipped HanseWerk with crucial labor market insights, an understanding of their job postings’ efficacy, and the development of future-oriented job profiles, thereby fashioning a blueprint for adaptive recruiting and talent development strategies.
The shift towards a skills-based talent strategy ensures organizations remain resilient and competitive in an ever-evolving market. By investing in skills development and recognizing the intrinsic value of continuous learning, companies safeguard their future and contribute to developing a robust, skilled, and future-ready workforce. Focusing on developing a proactive stance towards evolving skill requirements, contending with a hyper-competitive talent market, and adopting non-conventional talent pools will secure an organization’s viability in the future of work.
It’s a journey where balancing service delivery and future work considerations, harmonizing diverse initiatives, and ensuring consistency in implementation are crucial. While navigating the intricacies of establishing a skills-based talent strategy, organizations should stay vigilant to ensure alignment across various initiatives and foster a cohesive, holistic approach.