ARTICLE | September 22, 2023

The future is skills, not jobs

With automation and shifting attitudes toward work, companies are looking past job titles toward a new skill-based talent paradigm

By Howard Rabinowitz, Workflow contributor

When is a nurse not a nurse? When he’s a team of four workers performing the non-specialized duties of one nurse—paperwork, restocking crash carts—in short, gig-work shifts.

Facing a severe nursing shortage at the height of the pandemic, Providence Health needed a new solution. So Chief People Officer Greg Till deconstructed the job of “nurse” into its component parts, then enlisted staff—administrators, receptionists—who had the time, and skills, to handle lower-level aspects of the job. Four staffers, not trained “nurses,” worked part-time to fill the need for one full-time nurse.

“It’s not trivial,” says John Boudreau, a research scientist at the University of Southern California who studied Till’s approach to talent. “If you define the nursing shortage as how many individuals will get this nursing degree in the future and be ‘fully qualified,’ there's no resolution to that equation. There will not be enough, period.”

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Amid talent crunches, economic headwinds, the evolving expectations of younger workers, and automation, many companies are undergoing a mindset shift from a reliance on static jobs and organizational hierarchies to a skills-based approach to hiring.

“With the constraints that companies are facing today, we need to consider a new operating model for talent,” says Kelley Steven-Waiss, ServiceNow chief transformation officer and founder of Hitch Works, a skills intelligence platform that identifies and matches employee skill sets to project-based and full-time work within an organization. “We know the job titles of people, but we don’t know their skills. If we could have better visibility into our skill supply chain, we could more proactively and efficiently manage our skills supply and demand. We could tap existing capacity inside the organization and redeploy talent instead of laying people off or trying to hire from the outside.”

A skills orientation makes good business sense when talent shortages are dire, with 77% of employers struggling to fill job roles, a 17-year high, according to Manpower Group. Gen Z workers, who will comprise 27% of the workforce by 2025, are drawn to companies where they can acquire new skills to advance their careers, according to a PwC report. Keeping workers on board is just better for the bottom line, since recruiting and training new hires costs $4,683 per position on average, according to the Society of Human Resource Management.

With the constraints that companies are facing today, we need to consider a new operating model for talent

“The organizations that are making this mindset shift are the ones that are going to be able to adapt,” says Gary Bolles, co-founder of eParachute and chair for the future of work, Singularity University. “The ones that keep on falling back into these old mindsets from the 1950s and 1960s are going to find themselves increasingly farther behind. Knee-jerk layoff and hiring responses to near-term challenges ultimately are going to put you at a dramatic competitive disadvantage.”

In Bolles’ estimation, a skills-based talent strategy gives companies greater agility to respond to shifting business demands and economic turbulence. It’s better for employees, too, in the face of coming automation: according to the World Economic Forum’s 2023 Future of Jobs Report, 40% of business tasks will be automated by 2027.

“If we know more about an employee, we can point them to more engaging work,” says Steven-Waiss. For the company, the benefit is higher levels of productivity and efficiency. It’s a huge win when you can redeploy the talent sitting right under your nose, and you don’t have to spend the money to go hire someone outside the organization for the skills you need.”

At data storage firm Pure Storage, CHRO Alessandra Yockelson is working to shift the company’s talent strategy to one that is skills-based. “Your people will stay if they are having an impact, if they are being challenged on the job, and if they are acquiring new skills,” she says. “People need to feel they are growing. It’s a universal need.”

To that end, the company has started asking workers to identify the skills they have, ones they want to develop, and their career aspirations. In the process, Pure Storage is beginning to align those skills and ambitions with the company’s needs, she says.

“We are on a journey,” Yockelson explains. “After my attention moved to skills, I realized how much potential was wasted with more traditional ways of managing human capital. With skills, the potential is exponentially bigger.”

Your people will stay if they are having an impact, if they are being challenged on the job, and if they are acquiring new skills

Artificial intelligence is the secret sauce not only for enabling companies to surface workers’ skills and career aspirations, but also for matching them to projects, upskilling pathways, lateral mobility opportunities and mentorship within the organization, says Steven-Waiss.

“We have so much siloed talent data in companies,” she notes. “A skills hub built with AI can eliminate the data silos and duplication to ensure the data is both current and relevant and employees can have better access to learning and growth opportunities. When we enable a new operating model with a skills-powered talent marketplace, it’s a game changer.”

Major companies like Cisco, Google, IBM, GE, Procter & Gamble, Schneider Electronics and Bank of America have been leveraging AI-fueled internal talent marketplaces (ITMs) for years to empower workers to move laterally within the organization and chart an upward career path. A skills hub builds on the ITM foundation to surface skills and aspirations and matches employees with part-time projects, open positions, and mentorship opportunities.

Yockelson also sees the potential for AI to predict the skills needed tomorrow. “I want to use it to look ahead and break down the strategic skills we have in our workforce,” she says. “We can start investing ahead of time in training our people in the skills we will need three years from now.”

USC’s Boudreau cautions that the mindset shift from job roles to skills-oriented work will take time. “I don't think we're ready yet to reformulate the whole system of work in a company around this concept yet, especially a large established company,” he says.

Indeed, at more than half of U.S. companies, managers hoard the talent of their teams, while employees at 1 in 3 companies feel the need to keep their internal applications for other positions secret from their managers, according to a survey by Korn Ferry.

At 1 in 3 companies, employees feel the need to keep their internal applications a secret

The solution, Steven-Waiss suggests, is to establish the value proposition for both managers and their teams when adapting to a skills-based organization. For workers, skills growth, networking and financial incentives are strong motivators. For leaders, the payoff is the ability to tap talent anywhere in the organization: “You get what you give.”

And what if you still don’t have the relevant skills necessary in-house? In Germany in 2022, more than 36 major companies, from auto suppliers Continental and Bosch to industrial firms BASF and Siemens, agreed to coordinate layoffs at one firm and vacancies at another, training workers to move directly from job to job.

It seems futuristic, Steven-Waiss admits, but “in a world where there’s only so much talent outside of your company, gaining visibility to skills will allow for greater agility and even sharing talent across organizational boundaries.”