How to build a skills-basedorganization

Align skills to goals,
not roles
HR is struggling to activate talent quickly andeffectively. Skills are under-utilized acrossbusinesses and organizations do not have asystematic or usable way to identify, measure, andmobilize them.
Organizing work around people and their skills can maximize
productivity, performance, and agility. This is where the skillsbased organization comes into play.
By building a system to understand and manage skills, HR
can apply a consistent strategy across all talent initiatives, toempower businesses to adapt as priorities, economic conditions
and talent markets shift.

How to build a skills-based organization

Contents
Chapter 1: Why now?

3

Chapter 2: Why Skills?

4

Chapter 3: Break it down

6

Chapter 4: Where to start?

9

Chapter 5: Overcoming obstacles

10

Chapter 6: Evolution or revolution?

12

Chapter 7: Start the journey with SHL

1322

88 C-Suite leaders anticipate the fastest ever rate of change in 2024 C-Suite lead

Chapter 1

Why now?
Business priorities are changing quickly andoften, and the working population is shrinking.
Organizations are on a mission to keep up.

Meaningful progress
Since the financial crisis of 2008, the criticality of people has
been recognized, processes have become more automated andtechnology more sophisticated. Ultimately HR has transformed its
strategic importance to the organization.

But there is more to be done
Progress has slowed because all those new initiatives now feeldisparate and static, and no longer aligned to the evolving businessstrategy. Inefficiencies are accumulating as priorities continue
to change, and talent teams are back to tackling new businesschallenges only as they arise. It seems that businesses arestruggling to keep up.

The rate of change will only increase
Who, how, when, and where work is done isstill evolving.

88%

C-Suite leaders anticipate thefastest ever rate of change in 2024

Top2

Tech and Talent are the top 2 causesof business change

52%

C-Suite leaders say they are not fully
prepared to respond to the rate of change

And great talent has become scarce
Not only is the working population shrinking in many
areas across the world, new skills requirements are
emerging as roles and technology evolve. Organizations
are struggling in their search for great talent.

How to build a skills-based organization

3

Chapter2

Why Skills?
Shifting to a skills-based approach means organizing work aroundpeople and goals, rather than jobs.

Respond to market or strategy
changes quickly

Mobilize critical talent, when you
need it

Reorganizing work around clusters of skills, abilities
and potential, as opposed to role hierarchies, enables
organizations to allocate work in a more fluid andmeaningful way, enabling agility and faster time toproductivity.

Only about 25% of roles are filled with internaltalent worldwide. Many organizations miss out on
the benefits of internal hiring: significantly lower
time-to-hire, lower cost and higher retention. Being
able to view and map skills across the workforce will
enable organizations to activate talent quickly fortargeted results.

Increase talent pipelines by 9.4x
Beat the talent shortage by expanding your talentpool. Measuring skills is a way for organizations tolook beyond traditional proxies such as education andexperience, and instead focus on people’s abilities andcapacity to learn and adapt. Companies that hire forskills increase their talent pipeline by 9.4x.

How to build a skills-based organization

Create a win-win situation throughdevelopment
As business needs change, the skills required
to succeed evolve; and so can people. By
understanding the workforce through the skills
they already possess, organizations can upskill andreskill individuals to maximize productivity, while
improving engagement.
4According to a global survey
skills-based organizations are…

In the past, only selecthigh-potentials were given
the opportunity to tackle
business-critical challenges
or move around to different
projects, giving them thedevelopment needed torise. But a skills-basedorganization gives everyone
the ability to access thetypes of experiences, now
democratizing opportunity
for all.

63%

More likely to achieve key business outcomes,
such as meeting financial targets andresponding to change

107%

More likely to place talent effectively

57%

More likely to anticipate change andrespond effectively and efficiently98%

More likely to retain high performers

98%

More likely to have a reputation as a greatplace to grow and develop

79%

More likely to have a positive workforce
experience

Deloitte, 2022

How to build a skills-based organization

5

Chapter 3

Break it down
The move towards skills is a journey andthat journey will look different for everyorganization. Here are some thoughts to getyou started.

Set yourself up for successWith some structured thinking and strong foundations you canimplement meaningful change.

How to build a skills-based organization

61. Start with your ‘why’ and picture success

2. Rally the troops

Ask yourself: why are you looking to shift towards skills?
What do you and your business ultimately want toachieve with this? There are so many reasons to take ona skills-approach, but having clarity on your purpose will
help you focus. Then consider what success would look
like. What KPIs would you keep track of and how would
they benefit the business?

Building a skills-based organization is not something that canbe done alone. You will need share your goals and strategy
with other stakeholders within the organization, and bringthem along with you on the journey. As this cascades downfrom senior leadership, people at all levels in the organizationneed to understand the benefits of this approach, as well as
their role during the transition and beyond.

Examples: I want to…
•

Better align the workforce to our business strategy•

Future-proof by building an adaptable and agile workforce
that can pivot quickly to meet evolving market demands andovercome uncertainties or disruption•

Foster a culture of innovation, creativity and fresh, diverse
perspectives•

Better equip employees with specific skill-based development
and career pathing•

Leverage the workforce’s productivity and effectiveness, ensuring
projects are completed with optimal combinations of expertiseand resources•

Remove traditional hiring hurdles like qualification requirements,
tap into a larger and potentially different talenta pool, and ensure
fairnesss

How to build a skills-based organization

73. Line up your tools

4. Celebrate the wins

In order to build a skills-approach in any form, you will need toaccurately identify, measure, and map skills. Then, understandand manage them in a systematic and usable way – for bothyour organization and your employees.

All progress is progress and it is all too easy to forget about thesmalls wins and steps forward. As you go through this journey, it’s
important to take stock of your successes and use this as fuel forthe next steps.

By implementing skills assessment methodologies, you canobjectively evaluate employee capabilities, enabling quick andinformed decisions regarding talent management. With reliable
data, mapped to a robust skills framework, you can apply analigned and consistent strategy to all initiatives across the talent
lifecycle.
The first step in any skills journey is to find a common language
to describe and map skills. SHL’s Skills Taxonomy is powered byan evidence-backed framework, and will help you build a strong
foundation for your strategy.
Next, you’ll need tools to measure skills. One of SHL’s key
skills offerings is the Global Skills Assessment, which has thecapability to measure 96 business skills in just 15 minutes. Read
more about this in chapter 7.

How to build a skills-based organization

8

“I want to better align the workforce toour business strategy.”

Capabilities neededThis is a common ‘why’ for organizations transitioning to a skillsbased approach. Translating your business and talent strategy toskills requirements can seem daunting at first. But equipped withthis information, you are in a much better position to support thebusiness through strategic hiring, mobility and reskilling initiatives.
Below is an example of how a fictional business, Global Holdings,
might map their skills requirements to their business strategy:
Business strategy
The Global Holdings business strategy focuses on leveraging
technology and data analytics to provide personalized financial
solutions, improve customer experience, and drive operational
efficiency. They aim to expand their market presence throughtargeted marketing strategies and partnerships while maintaining
a strong focus on risk management and regulatory compliance.

Talent strategy
The Global Holdings talent strategy is centered aroundattracting, developing, and retaining a diverse workforce withthe skills and expertise needed to support their businessobjectives. They prioritize investing in employee development,
fostering a culture of innovation and collaboration,and ensuring alignment between individual goals andorganizational goals.
How to build a skills-based organization•

Data Analysis and Actuarial Science•

Technology and Digital Innovation•

Risk Management and Compliance•

Customer Relationship Management (CRM)•

Financial Planning and Investment Advisory•

Continuous Learning and AdaptabilitySkills requirements•

Analyzes information•

Critically evaluates•

Makes rational judgements•Offers practical solutions•

Builds, designs, or creates new tools or systems•

Offers practical solutions•

Learns quickly•

Gathers information•

Generates new ideas•

Understands spoken information•

Speaks clearly•Writes with clarity•

Communicates using technology•

Builds rapport•

Builds and maintains networks
9Chapter 4

Where to start?
Start small, do it well, and build momentum.

Skills-based hiring

Skills-based mobility

Reskilling

Revise recruitment andselection processes

Better yet, look within.

Grow alongside businessstrategy

Employees
who are currently in
C-Suite leaders anticipate the fastest ever rate of change in 2024 C-Suite
lead
Prioritize skills measurement
your workforce have institutional
over formal qualifications andknowledge and know yourrole-specific experience. Thisbusiness already. They are likely
may allow you to tap into theto hit the ground running.
hidden workforce, or consider
talent pools outside of yourFostering a culture of internal
usual industry.
mobility has many additional
benefits too, including increased
Use skills-based assessments
employee engagement, higherand behavioral interviews,
retention, and reduced hiring
and ask skills-based questions
costs.
throughout the hiring process
to fairly measure individuals
against skills requirements.
How to build a skills-based organization

As business or talent strategies
change, your organization’s
capabilities and skills
requirements will change too.
Being able to see the talent you
already have already puts you
a step ahead. You are then able
to quickly pivot and understandyour workforce against
these changes, and target
development investments.

10Chapter 5

Overcoming obstacles
Challenging legacy thinking and robust change
management capabilities will take you far inyour skills journey.

View this as a change management
initiative
The journey ahead may seem daunting, but it is important torecognize that this transition is akin to other change management
initiatives that HR and Talent teams have successfully undertakenin the past.

Top barriers to building a skills-basedorganization
Deloitte, 2022

1.		Legacy mindsets and practices
2. 		Compensation practices restricting us from rewarding 					people for the skills they possess or develop
3. 		Complexity and difficulty of managing skills-based			practices
4. 		Keeping up with the pace of change
5. 		Inability to move skills to business priorities
6. 		Lack of common definition or taxonomy of skills
7. 		Inability to evaluate performance based on skills
8. 		Insufficient skills data
9. 		Lack of effective skills-related technology
10. Recruiters or hiring managers not knowing how to			source or evaluate skills

20%
20%
How to build a skills-based organization

Operational Barriers

60%

Agility Barriers
Technology Barriers

11Assess your organizational structure
and culture
You need to understand the existing skill sets within yourworkforce and identify any gaps that need attention. By
conducting this evaluation, you can gain insights into areas
where skills-based practices can be effectively implemented anddetermine where to focus your efforts.

Start with areas needing the most change

Ensure employees understand how skills data will be used toempower their careers and productivity, thereby fostering trustand engagement.

Lead by example
Garner leadership consensus and support. Active involvement
and commitment from senior management is essential for drivingcultural change and ensuring long-term success. Leadership buyin fosters alignment and creates momentum for the transition
toward a skills-based organization.

Next, prioritize the redefinition of roles and responsibilities basedon skills rather than experience and titles. Start by focusing on
the roles that require the most significant changes and evolution.

Measure workforce readiness
Invest in robust skills assessment tools and platforms to facilitate
this transition. This data-driven approach not only identifies
individual strengths and weaknesses, but also provides acomprehensive view of workforce readiness relative to yourstrategic goals.

Foster transparency
Establishing a culture of transparency and communication iscrucial. While organizations often emphasize technologicalaspects such as skills marketplaces and AI, it is the operational
and agility-related obstacles that represent 80% of the barriers.
How to build a skills-based organization

12

What would make you more open to letting
your employer collect your skills data?
Deloitte, 2022

1. My employer would clearly tell me how my data is collected,
used, and the beneﬁts that will be achieved
2. My data would open new opportunities for my growth anddevelopment, but it wouldn’t inﬂuence hiring, deployment,performance assessmAent, pay or promotions
3. My employer would only use data that is objective andveriﬁed to inform hiring, pay, or promotion decisions, with
the intent of making them fairer and more meritocratic
4. New work opportunities such as roles, assignments, teams,
or projects would be suggested to me based on my data
5. I would have control about what data is shared and withwhom
6. I could validate and correct my data as needed
7. I could have more customized work experiences based on
my data

How to build a skills-based organization

43%

57%

Transparency, Fairness & Agency
Career & Personal Growth13

Chapter 6

Evolution or revolution?
From simply creating consistency in jobs tore-architecting work to drive productivity, yourorganization’s commitment to a skills-based
approach will sit on a continuum. Where on thecontinuum would you place your goals?

More than one road to successDiscover the stories of businesses that reaped the benefits of building
a skills-based organization by taking two very different approaches.

How to build a skills-based organization

14

Chapter 7

Start the journey with SHL
SHL helps organizations deploy a highly usable andsystematic skills-based approach, resulting in confident
mobility, reskilling, and hiring decisions.

Unlock agility with confident decisions
SHL is home to a comprehensive range of skills-related capabilities andofferings that support every stage of the talent lifecycle, from hiringand mobility decisions to identifying strengths and gaps in skills forindividuals and teams.
Central to all these capabilities is a rigorous scientific foundation. We
firmly believe that validated, fair, and reliable insights into skills are
essential for making informed talent decisions, fostering agility, andtransitioning to a skills-based organization.

How to build a skills-based organization

15

Science-backed assessments
SHL’s solutions contain an array of assessments andtools that make embedding a skills-first strategy
across the employee lifecycle simpler than ever.

SHL Global Skills AssessmentSoft skills are increasingly vital in today’sworkplace. This assessment evaluates the 96 soft
skills outlined in the SHL skills taxonomy in just 15
minutes. It provides a comprehensive overview ofan individual’s soft skills and abilities, supporting
various hiring or mobility decisions.

How to build a skills-based organization

Working within our solutions means that you
can turn skills data into actionable insights for
all hiring, mobility, and development decisions.

200+ functional and technicalskills assessments

With the largest library of over 200 functionaland technical skills assessments, SHL enables
organizations to assess hard skills fairly andaccurately within their talent pools.

16

Coding skills assessments

These assessments evaluate coding
proficiency across numerous languages
and various software development skills.
They help organizations ensure they
have the cutting-edge technology talentneeded to thrive in rapidly evolving techenvironments.

How to build a skills-based organization

Job-focused skills assessments

Building on the aforementioned capabilities, SHL has developed
and validated job-specific hiring solutions tailored to measure
the skills required for key roles. These assessments are designed
for various roles, including customer service and contact center
positions, manufacturing and industrial roles, graduate andapprentice programs, as well as numerous professional andmanagerial positions.

17

Packaged into solutions

Graduate Hiring

Volume Hiring

Professional Hiring

Competency Fit Insights

Early career hiring is
your foundation for asustainable future -proof
workforce. Build a talentmarketplace to feed thepipeline of roles you must
fill in the coming years.

It takes a lot to truly
captivate the attention ofgreat candidates. Keep themengaged with a standout
experience and use
assessements to efficiently
gather talent intelligence

Engage and secure
professional talent to build
a strong pipeline and drive
future success.

Measure the competencies
of individuals, teams, andyour entire organization

Learn More

Learn More

Learn More

Learn MoreFind the skills you need, when you need them
SHL’s assessment tools empower organizations to accurately evaluate both soft and hard skills,
facilitating informed talent decisions using proven and fair scientific tools and enabling successfultransitions to a skills-based organizational model.

Speak to our experts

How to build a skills-based organization

18

SHL brings powerful and transparent AI technology, data science, and objectivity to help
companies attract, develop, and grow the workforce they need to succeed in the digital era.
We empower talent strategies to unlock the full potential of your greatest asset—people.

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