Deloitte’s 2023 Global Human Capital Trends survey was released in January 2023. It surveyed 10,000 businesses and HR leaders in 105 countries, across every industry, and identified a number of global workplace trends for 2023 and beyond. One of their findings is that a more fluid approach to employees’ skills should become the focal point for organisations seeking to be as agile and competitive as possible.
Other research by the Chartered Institute of Personnel and Development (CIPD) in the UK in 2018, ‘Over-skilled and underused: Investigating the untapped potential of UK skill’, found that a significant proportion of employees feel over-skilled for their current roles, suggesting that there is untapped potential in most workforces which could be exploited and developed to allow businesses to achieve greater productivity (and competitive advantage), as well as fulfilment for, and retention of, staff.
Deloitte’s research reveals that only 19% of Business Executives and 23% of workers say that work is best structured through the confines of their job title or description. As a result, a growing number of organisations are starting to focus more on their employees’ skills, rather than their employees formal job descriptions, job titles or formal qualifications.
There are four main reasons for this:
A skills-based approach can lead to:
- Better performance. Employees who are doing work for which they are a better fit in terms of their technical and soft skills and capabilities, achieve greater productivity, innovation and efficiency.
- Greater organisational agility. Organisations can be more agile if they allow employees to be deployed, or redeployed, based on their skills rather than their job title or function. 81% of Executives reported that work is increasingly performed across functional boundaries.
- Easier recruitment. Broadening the recruitment and selection criteria for jobs makes it easier to recruit as there are no longer such strict limits on who has the right qualifications and experience for a role.
- Increased Diversity and Inclusion. 75% of Executives say that recruiting, deploying and promoting employees based on skills (rather than job tenure, history or network) can help to improve access to opportunities throughout organisations.
Although 93% of respondents said that moving away from a narrow focus on jobs is important or very important to their organisation’s success, only 20% said their organisation was ready to do so. So, what do these organisations need to do to achieve this goal? The report offers the following suggestions:
- Organisations need to think about their strategic objectives and goals
- Identify what work and skills are required to achieve those goals
- Define work based on the skills required to achieve the goals, rather than listing tasks and responsibilities to be done within job roles
- Using new AI software, collect and analyse data about employees' actual and potential skills (with their permission) but also their interests, values and career goals, as these will lead to greater motivation and retention
- Make decisions about deploying employees (and their compensation) based on skills throughout the talent life cycle.
The above measures are likely to require greater input from Human Resource Management specialists and Business Psychologists to perform the tasks of job design and job analysis, to ensure that the skills for which organisations are recruiting for are linked to their strategic needs, both today and for the foreseeable future, if they are to be a source of competitive advantage in the market.
It seems likely from the CIPD’s 2018 report that there is also a source of untapped potential in many employees. The research reports a mismatch between many employees’ skills and their current job, with as many as 37% of employees reporting that they are over-skilled for their current role and by implication capable of more challenging ones. The research also found that over-skilled workers are less satisfied and nearly twice as likely to want to leave their jobs than those in well-matched roles. Over-skilled workers are also more likely to say their job offers poor prospects for career advancement, training and skills development.
By tapping into the both the unrealised potential of their existing and future workforce in this way, businesses which adopt a more skills-based approach to roles should be able to achieve what Deloitte refers to in the report as a state of ‘Drive’ - where they are leading their market through radical transformation and innovation.