Companies use skills as the new currency for workforce transformation

Skills have become the new currency of workforce and talent strategies, as more than half of organisations that responded to the 2021 Mercer Global Talent Trends survey are targeting upskilling and reskilling of critical talent pools to drive workforce transformation.

For most organisations, from COVID-19 to technological advances, the nature of work has experienced seismic disruptions as we have become more interdependent, knowledge-focused, specialised and flexible about where, when and how we work. Traditionally, the base unit of managing a workforce has been a job.

Job descriptions and titles have, until recently, defined how companies viewed work, how they set salaries, and how they made critical decisions around talent and workforce transformation. Today, the base unit of work has fundamentally evolved from jobs to skills.

“It became clear during the pandemic that skills fuel business transformation and organisational resilience. Companies that took inventory of their workforce or talent ecosystem have been able to find talent quickly, move talent to where it’s needed most, and make critical talent decisions to keep the business running during uncertain times. Mercer research shows that 14 percent of organisations that responded to Mercer’s 2021 Global Talent Trends survey have already embarked on skills-based talent practices such as skills-based pay,” said Kate Bravery, Global Advisory Insights and Solutions Leader at Mercer.

A skills-based approach to workforce strategy assesses talent based on their holistic skill set (including adjacent skills across industries), rather than industry experience or qualifications. A well-designed skills-based workforce strategy will enable organisations to proactively identify future skills needs and develop an actionable plan to retain, build, buy and deploy talent, as needed.

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According to Mercer’s 2021 Global Talent Trends survey, there has been an increase in talent practices that have enabled organisations to use their talent pool more flexibly. To better adapt to evolving business needs, 58 percent of UK organisations stated that they had already started to identify new skills and capabilities needed for post pandemic operations, with 21 percent of UK HR leaders implementing skills-based strategies such as pay-for-skills. In addition, 30 percent thought lack of workforce capability and future skills was one of the biggest challenges for their organisation in driving transformation.

The Global Talent Trends survey also highlights the key skills needed for organisations to succeed in future. Due to more remote and virtual working, collaboration skills (60 percent), inclusive empathetic management (58 percent), and adaptability/growth mindset (open to change) (44 percent) were critical for future resiliency.

“How we work is changing at pace and how organisations were set up a year ago is likely to be out of date now,” said Lisa Lyons, UK Workforce Transformation Leader, Mercer. “A more agile way of working is needed to meet this changing business environment. Savvy leaders who want to stay ahead of competition will value skills as their new currency.

“Now is the time to build organisations that can flex to market changes and align talent to where demand is. This requires us to challenge the idea that a job has fixed responsibilities and skills. Instead employers should deconstruct jobs into tasks and required skills and democratise work opportunities for all. Focusing on skills gives companies greater precision for workforce planning, talent management and building the workforce for the future.”

Image:Mercer