It has been a turbulent year so far as companies have continued to navigate a challenging macroeconomic environment. As a result, we are also experiencing increased business challenges. One of the biggest is widening skills gaps. In fact, a whopping 87% of executives say they either currently face or expect to face major skills gaps within the next few years. What’s more, when it comes to closing those gaps, many organizations lack the resources needed to address this growing issue.
Additionally, as the traditional, job-based organizational structure is becoming increasingly obsolete in today’s rapidly changing business environment, new research from Deloitte reveals that 98% of executives are moving toward a skills-based organizational model to remain agile and competitive. Further, 89% of business leaders believe this shift will be essential for how organizations define work, deploy talent and manage careers to foster increased innovation and productivity.
The good news? Employees are on board with this newfound approach to work. In fact, Udemy found that 67% of workers reignited their passion for learning during the pandemic, and it could not have come at a more critical time, as it’s projected that the skills needed for any given job are increasing by an average of 10% per year. As a result, 69% of human resources (HR) leaders say they have been experiencing heightened pressure from employees to provide more development opportunities to help them prepare for future roles within the company.
A key part of this evolution is the agile shift to skills-based work versus competency-based work. So, with that in mind, here are three organizational processes to help your business start integrating a more skills-based approach:
1. Skills-based Hiring
Embedding a skills-based hiring process will allow for a bigger, more diverse pool of candidates as traditional job descriptions no longer accurately reflect the work that employees are doing today. Additionally, the historical practice of competency-based hiring — which came with degree requirements — caused many highly qualified candidates to be overlooked. Moving forward, it’s essential that organizations widen specifications around their job requirements to be inclusive of both degree-based and skills-based applicants.
In fact, McKinsey recently reported that skills-based hiring has had a significant impact on employee performance and retention. On average, skills-based hiring was five times more predictive of overall job performance than degree or experience-based applicants. Additionally, as these employees tend to demonstrate longer company tenure, it enables organizations to save the tens of thousands of dollars that is typically required to backfill positions.
2. Skills-based Development
Providing employees with ongoing upskilling and reskilling opportunities is imperative to help drive long-term business results and keep pace with innovation. Mandating a few company-wide trainings each year simply won’t cut it anymore and employees recognize this. In fact, 54% of adults in the workforce acknowledge the growing importance of ongoing skills development and they’re ready to roll up their sleeves and get started. Thus, learning in the flow of work should become the rallying cry for every organization as they seek to make learning and continuous skill development a way of life.
At Udemy, we firmly believe that learning is not a one-off training experience, but rather represents a part of every employee’s full-time job. Our company value of “#AlwaysLearning” ensures that our culture continues to evolve with this strategy and establishes a clear set of behaviors that are expected from employees in which they’re virtually always upskilling themselves. Additionally, research has shown that employees who spend time at work learning are 47% less likely to be stressed, 39% more likely to feel productive and successful, 23% more ready to take on additional responsibilities and 21% more likely to feel confident and happy.
3. Skills-based Mobility
Skills-based learning not only enhances an employee’s agility, but it also enables them to adapt to new roles, technologies or projects — which is important now more than ever. According to Deloitte, 81% of executives say work is increasingly performed across functional boundaries, making internal mobility even more important. The good news: 77% of the global workforce is ready to learn new skills or completely retrain inside and outside of their daily work if it will help move their career or company forward.
For example, Udemy recently worked with consulting firm Booz Allen Hamilton, to upskill their workforce and help close skills gaps within their data science division as the combination of hiring shortages and increased client requests left them with key gaps to fill.
Employees furthered their progress through hands-on projects, mentor circles led by leaders of various functions and provided support to practice their skills. As a result, they saw a 93.5% increase in proficiency, 93% increase in employee retention, 65% increase in productivity and 3% increase in billable hours. This is just one example of how cross-functional opportunities can enable employees to gain new skills beyond the work and function for which they were hired in a way that benefits both the individual and their organization.
Ultimately, companies who leverage a skills-based approach to learning will benefit employees by helping them expand and increase their skill set. It will also help build organizational capabilities and skills to prepare for and be ready for that future that is always right around the corner.
