Why Everyone is Switching to Skill-Based Workforce Planning

“As organizations move from their initial pandemic response to more sustainable operations, they’re trying 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.” 

— Mark Whittle, VP, Advisory, "Gartner's Top 3 Priorities for HR Leaders in 2021." Gartner. Octoer 23, 2021.

Since the pandemic, resilience has been one of today’s most desirable business qualities. 

With that goal in mind, organizations worldwide actively seek ways to ensure business continuity. One surefire way is to become as agile as possible, specifically in talent management. 

Traditionally, workforce planning focused on the demand for talent and the supply of jobs, assuming that the roles would not change and that the skills needed, the job titles, accountabilities, business processes, and performance measures would remain the same. But the disruption brought about by digital transformation and the pandemic gave us a glimpse into the future of work. What we saw dispelled the notion that tomorrow’s jobs will look like today’s jobs. 

Talent Challenges 

For starters, there’s the mapping of skill supply. Because of the increased transferability of skills, you cannot infer someone’s skill set based on their role. Also, digital , and knowledge-based skills are cross-functional. They can straddle different functions as digitalization permeates every industry, sector, and process. 

Then there’s mapping anticipated skill demand. Demand is subject to changing internal and external forces. Internal forces link to your business strategy. Do you plan to automate? Do you plan to move systems from on-premises to the cloud? Expand into new business areas? Upgrade technology and change processes? These and other considerations will have a direct impact on skill demand. 

Externally, we can see how the innovative shifts brought about by AI and machine learning, robotic process automation (RPA), agile methodology, cloud computing, data science and analytics, and digitalization have created new roles while making others defunct. This is only going to continue apace. The half-life of digital skills is four years and falling, so companies need to rethink their talent strategy. 

Upskilling and reskilling take on a new urgency, as has skills-based workforce planning. The 2020 Future of Jobs Report said that 85 million jobs could disappear by 2025 as the tasks shift from humans to machines. Meanwhile, 97 million new jobs may appear, so 50% of us will need to reskill at some point.   

What is skill-based workforce planning?  

As the future of work plays out and organizations struggle to be agile and dynamic, we can solve some of the talent challenges that arise with a strategic, skill-based approach to workforce planning. That involves considering your workforce and employees as collections of skills instead of an overall role or function. If we stop looking at people as being X and instead think of them as being able to do tasks X, Y, and Z, it creates a rich environment for a more granular and accurate analysis of organizational and individual capabilities. 

Using skill data instead of a function-based approach allows:  

1. Insight into the ways the workforce changes over time, and  
2. Better agility in responding to change or disruption. 

The benefits of understanding workforce changes   

Job titles don’t capture the ongoing changes in job requirements. 

According to Gartner talent data, the skills required for a job increase every year, and a third of the skills in a 2017 job posting were unnecessary by the end of 2021. So job titles remain the same despite fundamental changes in the skills required and how the work is done. Gartner’s research also reported that without this knowledge, many candidates are learning outdated skills that no longer apply to the positions they are applying for. Also, the skills gap will persist without transparency about the needed skills. 

Leaders and managers can align their strategy with the talent they have on hand because they have better visibility of the roles and skills. They can make informed decisions on what they will need for future planning. With the ability to identify how skills are changing comes the power to predict the new direction and course-correct, which is the very definition of agility. 

Besides the benefit to the organization, there is the benefit to the employee who, with a clear understanding of their skill set, is empowered to see it as a currency that enhances their value proposition. They can identify their skill gaps, determine the direction of their career path development, and access relevant learning opportunities to achieve their goals.  

Benefits of an agile response  

With the insight into the skill bank of the organization, and an understanding of how skills requirements will change, comes the increased ability to pinpoint and fill skill gaps. This is possible because the higher clarity level allows you to identify skill adjacencies and overlaps easily. 

Instead of an external search to fill vacant roles, skill-based recruitment will focus on the combination of skills required and ask if they already exist in the organization. If so, can you redeploy the person to save on recruitment costs? Can you train staff who has the potential to step into the role? Creating a skills taxonomy and a talent marketplace that enables talent mobility makes it possible—for example, a Software Engineer into a Systems Engineer position.

 Having the above visibility on overlapping skills makes for a smooth redeployment, even when upskilling is necessary to fill in the gaps. 

In recruiting, a degree requirement often disqualifies talented people from your talent pool who may be in a similar job. Skills are a better predictor of success (and job performance) than education, as technology has changed the landscape. People are becoming qualified in several ways, such as on the job, through apprenticeships, online courses, etc. 

Similarly, a skill-based approach can eliminate implicit bias (for education/school, gender, and culture) and help broaden the pool of qualified candidates. 

Succession planning and career pathing also get a boost when you can use skills and competencies to grow talent and guide their mobility into new roles. 

Skills-based L&D can tailor learning better to suit teams and meet specific needs. And targeted training is possible based on specific skill gaps and employee skill levels. 

 An overhaul of your talent management system, from role-based to skill-based workforce planning will produce an agile business that allocates talent with precision and insight.

Learn more about skill-based workforce planning 

How To Prepare Your Job Structure For The Talent Marketplace

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