Navigating the Transition to a Skills-Based Organisation  

By Aoife Donovan Lee, Head of Research, and Innovation at Harvest 

December 2023 

It is estimated that by 2030, 85 million jobs will go unfulfilled due to a lack of available skills (Korn Ferry, 2023). In addition to acting immediately to educate, train, and upskill their current workforces, organisations must prioritise talent strategy. Organisations moving toward a skills-based workforce approach will be best prepared for the future. 

By focusing on developing employee’s skills, organisations can enhance performance, increase productivity, adapt to market changes, and attract and retain top talent (Bersin, 2022). This article will discuss the relevance of becoming a skills-based organisation and the steps to develop into this type of a business.  

A New Approach 

Many organisations have begun to see the value in moving toward a different operating model for work. This model places skills, more than jobs, at its core (Deloitte, 2022). A skills-based organisational model prioritises recognising and nurturing the talents and competencies of its workers. More emphasis is placed on an individual’s abilities, skills, and talents than on conventional job titles, credentials, or hierarchies (LinkedIn, 2023).  

By making this shift, organisations can unlock numerous benefits, including: enhanced employee performance, increased productivity and effectiveness, adaptability to change, and improved talent acquisition and retention (Bersin, 2022). These advantages are discussed below.  

When employees have the necessary skills to perform their roles effectively, their performance improves, leading to better job satisfaction and overall organisational success (LinkedIn, 2023). Employees with well-developed skills can perform their tasks more efficiently, resulting in increased productivity (International Labour Organisation, 2017). Skills-based organisations are better equipped to adapt to changes in the market, as employees have the flexibility and expertise to navigate new challenges and seize opportunities (McKinsey, 2022). Organisations that prioritise skills development are attractive to top talent, leading to improved recruitment outcomes and increased employee retention rates (McKinsey, 2022). 

Challenges in Developing a Skills-Based Organisation 

While developing a skills-based organisation offers many advantages, it is essential to be aware of the potential challenges that may arise. These challenges include: resistance to change, lack of resources for training and development, and difficulty in aligning individual and organisational goals.  

Naturally, some employees may resist the changes required to becoming a skills-based organisation. Effective change management strategies are crucial to overcome this resistance (Forbes, 2020). Investing in training and development programmes require a significant allocation of resources. Organisations need to secure the necessary budget and infrastructure to support skill development initiatives (McKinsey, 2019). Aligning individual employees’ skill development goals with the overall goals of the organisation can be a complex process. Communication and collaboration between employees and management are key to overcoming this challenge (LinkedIn, 2023). 

Steps to Develop into a Skills-Based Organisation  

Deloitte has identified three different approaches that organisations typically take when embarking on the journey toward a skills-based workforce:  

1. Often, the organisation will begin with a certain talent practice and modify it so that it is more skill-based and less job-based, and then they will either similarly alter a different procedure or ascertain that they must first establish a skills hub before observing the change.  
2. Others will begin with the work, using either expanded job positions or an internal talent marketplace that allows certain work to exist as projects and tasks outside of the job. 
3. The third type of strategy is where the organisation begins by creating a centralised “skills hub” before expanding out to skills-based talent practices (Deloitte, 2022). This article will now explore a Harvest-led case study using this third approach within an Irish agricultural organisation. 

Case Study  

This agricultural organisation sought expertise from Harvest to define job families within the business, develop a skills-based taxonomy, and to develop a common language for all. The expected outputs were streamlined role profiles so that they were fit for purpose for the future organisation, to enhance all stages of the employee lifecycle and to assist with talent development and career planning processes and practices. 

It takes a significant investment of time and expertise (internally and with an external partner) to engage in the development of role-mapping and career path development. Harvest recommended that a number of preparation points were built into the normal HR and L&D practices that would proactively contribute to the bigger project at the appropriate time.  

Harvest suggested mapping this project out over 4 stages and using two pilot divisions to trial this process:  

1. Long-term Preparation
2. Planning  
3. Development  
4. Delivery  

During stages one and two, Harvest and the organisation agreed on competencies, terminology, and the groups for the pilot divisions, also known as ‘job families.’ Interviews were conducted with the heads of each job family. The job families were finalised for the division, including the list of jobs within each family. Focus groups were scheduled for each of the job families for the next stage.  

In stage three, a single source of truth was developed to define: job families, role profiles within the job families, competencies for each job family, skills for each job role, development requirements for each role profile and the link to other role profiles to establish career pathways. At key output was the required data to develop career paths that would fit into a Human Resource Information System (HRIS). This included a set of skills for each role, which culminated in a bank of skills (some common) for the job family and across job families. The outputs could also be used for development planning and succession planning. During this stage, a robust and common set of practices was defined that would ensure that future development of role profiles (and potential new job families) could be scaled and replicated.  

Harvest’s recommendation to the organisation was to input gathered data into the organisation’s existing HRIS or a more advanced AI tool. AI algorithms can analyse vast amount of data to identify and map out the skills present within the organisation for career-pathing, succession planning, personalised learning and development paths, and improved recruitment processes. 

Conclusion  

The journey towards a skills-based organisation underscores a pivotal shift in the modern workplace; it represents a fundamental rethinking of how we value and utilise human talent. Organisations embracing this change, such as this case study example, are poised to thrive in an ever-evolving business landscape, marked by rapid technological advancements and shifting market demands.  

If you are interested in hearing more about the Harvest skills-based taxonomy and how we could partner with your company, please contact us on hello@harvest.ie