Becoming a Skills Based Organisation
Today’s workforce is looking for more than just a job title or competitive salary—they want flexibility, autonomy, and purpose in their work. Enter the skills-based organisation (SBO): a model that prioritises what employees can do rather than what their job titles say. In an SBO, roles become collections of tasks and skill requirements that can be added, shifted, or reshaped based on the needs of the business.
This new operating model transforms how work is structured and executed, making organisations more agile and responsive to their changing needs. Employees, in turn, feel more engaged because they’re using their strengths, pursuing growth opportunities, and contributing in ways that are meaningful to them. Moving away from static roles, titles, and compensation, an SBO emphasises skill growth and freedom, which in turn drives higher levels of employee satisfaction and long-term engagement.
Getting Started: Define the Problem and Identify the Skills
Implementing a skills-based model isn’t just about filling out a spreadsheet of skills—it starts with a clear understanding of your business needs. Here’s a simplified approach to get started:
1. Define the Problems You Need to Solve
Before jumping into a skills audit, step back and define the specific challenges your business faces. Are you struggling to innovate? Lacking critical skills for digital transformation? Or perhaps there are opportunities you can’t capitalise on due to a lack of expertise?
It’s critical that your primary business objectives remain front and centre in your approach. Honing in on these issues allows you to identifying the skills that are most critical and urgent to your business. It’s in these areas that the transition to SBO should start.
IBM implemented its skills-based strategy by first identifying a critical gaps in fields like cyber-security and digital transformation. This shift is part of their larger strategy to close skill gaps and enhance internal mobility.
Why This Matters:
• Provides a clear roadmap to align skill development with business priorities.
• Helps focus on skills essential for strategic initiatives and long-term success.
• Ensures resources and learning investments are allocated effectively.
2. Identify the Skills Needed to Address These Problems
Once the problem is defined, break it down into the essential skills needed to solve it. This includes both technical skills (e.g., data analysis, software development) and soft skills (e.g., leadership, collaboration) that will support long-term growth and agility.
Schneider Electric has successfully transitioned to a skills-based model to address the critical shortage of energy management and sustainability skills. By focusing on up-skilling and re-skilling its workforce, Schneider has equipped its employees with the capabilities to support new technologies and sustainability initiatives.
Why This Matters:
• Keeps your approach focussed on skills that directly address business needs.
• Reduces the risk of investing in skills that don’t align with strategic goals.
• Supports the creation of targeted learning and development plans.
3. Assess and Map Skills Within Your Organisation
Now that you know what skills are required, it’s time to conduct a skills inventory to see what capabilities your current workforce has and where the gaps are. This can be done through self-assessments, manager feedback, or by using AI-powered tools that map skills automatically.
Unilever used an internal talent marketplace to gather data across it’s workforce. This gave them a clear understanding of available skills, but also enabled their people to start seeing the value of the SBO approach immediately by offering new opportunities through the marketplace.
Why This Matters:
• Provides a clear view of your workforce’s current capabilities and strengths.
• Identifies skill gaps that need to be addressed through hiring, up-skilling, or re-skilling.
• Lays the foundation for dynamic project-based roles and enhanced internal mobility.
4. Establish a Skills Development Framework and Learning Culture
Create a framework for skills development that aligns with your business needs. This involves setting up continuous learning programs, creating personalised learning paths, and encouraging employees to take ownership of their development.
Nestlé launched a global learning academy to support its transition to a skills-based model. The academy provides personalised learning paths that aligned with both employees’ career aspirations and business needs, leading to higher engagement and improved retention during a period of significant industry disruption
Why This Matters:
• Fosters a culture of continuous learning and growth.
• Encourages employees to take charge of their skill development and career progression.
• Aligns learning initiatives with strategic business goals.
5. Redefine Roles to Support Skills-Based Talent Deployment
In a skills-based organisation, it’s not enough to simply identify and develop skills; roles themselves must be reimagined. Traditional job descriptions are often too rigid, lead to a more siloed approach to work, and don’t capture the diverse contributions employees can make.
To start, try grouping roles by skills rather than job titles. For example, a “Data-Driven Specialist” could encompass data analysts, business intelligence developers, and even certain marketing professionals who use data insights.
Novartis redefined its role taxonomy to focus on specific skills, enabling employees to take on responsibilities beyond their traditional job descriptions. This improved cross-functional collaboration and helped them become more agile in responding to market changes.
Why This Matters:
• Breaks down rigid job descriptions that limit employee growth and creativity.
• Enhances cross-functional collaboration and reduces departmental silos.
• Allows for dynamic talent deployment that meets evolving business needs.
Additional Consideration: Performance & People Management in an SBO
Given the more fluid approach to work in an SBO, you may need to rethink how performance and people management are handled. In this model, people management can be decoupled from traditional roles and treated as a skill in itself. Any individual with the requisite skills could take on direct reports, regardless of department, and focus on coaching, development, and performance assessment.
Conclusion
The skills-based organisation model is not just a shift in how talent is managed—it’s a way to build a more dynamic, engaged, and future-ready workforce. By focusing on business needs, aligning skill development with strategic goals, and reshaping roles for greater flexibility, companies can unlock the full potential of their people and create an organisation that thrives in an ever-changing environment.
Ready to start your transformation? Contact us to find out how we can help you implement a skills-based approach that suits your organisation’s needs.
