Skillapalooza® - A strategic shift to skills-based organisations in 2024

In business as in martial arts, skills are not an end, but a means to an end. Developing talent with the right skills, at the right time and place to deliver business goals is a challenge every organisation faces, including small to mid-size businesses (SMBs).

The global skills crisis resultant of the intersection of geopolitical uncertainties, technological advancements and the increasing demand for new skills is escalating. The challenge of hiring or developing talent with the skills needed by businesses is regularly cited as one of the top priorities of CEOs in all industries and sectors (McKinsey & Company, April 2023).  

Despite tempting assumptions that the skills crisis was a by-product of the pandemic's great resignation, the challenge persists, especially in technology skills. According to Fiverr’s latest UK Future Workforce Index, 83% of SME UK businesses are willing to pay higher wages to those with AI skills. In 2023 Politico reported that the European economies risk falling behind unless workers retrain in response to technological changes and the Institution of Engineering and Technology (The IET) stated that the skills gap in the engineering workforce threatened the UK’s ability to reach its net zero goals.

 

Why are skills so important?

Skills touch everything, from talent acquisition to performance management, from competence assessment to learning recommendations, job architecture to talent sourcing, certification to digital credentials and so on. Every step, stage and function in the talent lifecycle is connected to skills and skilling, so much so that skills may be considered the common thread or currency of employment, enabling career vitality and career mobility.

Skills are also the only sustainable competitive advantage that any business can maintain in the long run. Every other resource that a business needs will eventually be extracted, designed, manufactured, developed, reproduced, packaged, delivered and maintained cheaper and faster by a competitor.

In business there are no leisure learners as all learning is done with a purpose in mind, either one that supports a business need or enables career progression (ideally both) through skills development.

 

What is a skills taxonomy?

A taxonomy is simply a classification system, often but not always hierarchical. Most skills taxonomies are alphabetical lists of skills nodes (single skills), sometimes with the addition of synonyms for the skill (software development and software programming), associated acronyms (AGILE), and occasionally brief descriptions. A skills taxonomy may be linked to a job architecture taxonomy of job roles grouped into job families. The defining characteristic of a skills taxonomy is that it is one-dimensional.

 

What is a skills ontology?

If a skills taxonomy is a list, an ontology is a dynamic mesh, in which the relationship between skills is defined and maintained. An ontology shows the relationship between skills, for example, public speaking is a skill related to, but different from lecturing, which in turn is related to lesson planning. Ontologies also contextualise skills to job roles, job families and industries. Programming skills are found in job roles in the engineering job family in the software industry (and other industries). The defining characteristic of a skills ontology is that it is multi-dimensional.

 

What is a skills architecture?

A skills architecture is an overarching design for how skills data and functionality are connected and operate to deliver a consistent and coherent skilling experience to the user. A well-designed skills architecture such as used throughout the Cornerstone TXP should adopt three principles:

• Be Open: That is provide a means for interoperability with other systems that use skills data, typically through a suite of public, documented APIs (Application Programming Interfaces).
• Be Agnostic: That allows any number and variety of skills taxonomies or ontologies to be used and unified into a single model.
• Be Flexible: That is, allow any element of the chosen skills taxonomies or ontologies to be modified (add, change, delete, renamed), hidden or revealed from view to the user.

 

Become a skills-based organisation

Skills play a central role in contemporary business and leading businesses are adapting to become ‘skills-based organisations’ (SBOs) meaning they’re redefining talent identification, hiring and promotion based on crucial skills, rather than traditional qualifications, needed now and for the future.  The evolution towards SBOs reflects a strategic response, underlining skills as a key driver in talent management. From talent acquisition to performance management, skills are the linchpin constituting a sustainable competitive advantage for mid-sized organisations.

 

Paul D Jagger 

Principal Solutions Consultant at Cornerstone