Workday, a platform that manages people and money using AI, released today “The Global State of Skills”, which revealed a pressing issue for businesses around the world: more than half of business leaders (51%) are concerned about future talent shortages and only 32% of them are confident that their organization has the skills it needs for long-term growth.
The skills needed to succeed in the workplace are changing rapidly as AI transforms industries. Many organisations are unable to see the current capabilities of their employees. Only 54% of leaders have a clear picture of their workforce’s skills.
The growing uncertainty exposes the limitations of talent management strategies that focus on job titles and degrees. Previous companies also play a role. As a result, organisations are moving towards skills-based talent management strategies that place an emphasis on an individual’s abilities over their traditional credentials. This allows for a more agile and data-driven approach when it comes to hiring, developing and deploying talents.
Key Findings
- A skills-based strategy is no longer just a concept for the “future work”. It’s a way to gain a competitive edge. According to 81% of business leaders, adopting this approach will improve productivity, innovation and organisational agility.
- This movement has already begun. Over half of organizations worldwide (55%) have started the transition to a talent-based model based on skills, and an additional 23% plan to begin this year.
- Skills-based strategies are not only beneficial for business, but also help to close gaps in employment opportunities. According to leaders, the benefits include increased job access (82%), greater workforce equity (72%), as well as lower unemployment (61%).
AI boosts the shift to skills-based talent management
AI is a catalyst and enabler for this shift. The rise of AI transforms jobs but also helps organisations create more agile and skills-driven workforces. The research shows that AI plays a key role in the shift by:
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Reducing repetitive and routine tasks (52 percent of leaders agree).
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Improving decision-making with data-driven insight (52% of leaders agree).
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Personalising Learning and Development Programmes (47% of Leaders Agree)
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Predicting future skill needs (45% agree)
Ferring Pharmaceuticals’ Global Head of People Solutions Lynn Van Oossanen said, “We are committed to a continuous learning culture where employees can find new skills, projects and opportunities that match their ambitions.” With AI-powered technologies, we are now able to identify skills gaps in real time, enabling employees and managers to connect with the best talent more effectively .”
AI Is Accelerating, But Human Skills Remain Irreplaceable
Research shows that while technical skills are highly sought after, there is also a need for unique human skills. The most critical skill gaps are in social skills such as communication, teamwork and creativity, and in individual skills, like resilience and creative thinking. Digital fluency including AI and software expertise is listed next.
This aligns with findings from Workday’s “Elevating Human Potential: The AI Skills Revolution” report, which found that relationship-building, empathy, conflict resolution and ethical decision-making are critical for success in an AI-driven economy.
Chris Ernst, Workday’s Chief Learning Officer said, “AI is reshaping workplaces, but the human component has never been more important.” “Organisations who adopt a skills-first mentality will not only unlock the AI’s potential, but also harness human creativity in new and transformational ways .”
Adoption: The Challenges and Path to Success
Business leaders have identified several challenges despite the growing momentum for skills-based strategies:
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Time required to reskill workers (43%)
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Resistant to Change (38%)
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Lacking infrastructure to support talent-based management (28%)
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Inadequate tools for measuring skills (28%)
The research shows that technology alone is not the answer. To overcome these challenges, a change in mindset is needed. This includes clear communication about the benefits (48%), and effective change management (48%).
The Future of Talent is Skills First
Skills-based talent strategy was a goal that many people aimed for. AI and data-driven insights have made them a business necessity. In an age of rapid change, we believe that organisations who embrace this shift not only will outmaneuver their competition but will also future-proof the workforce. The skills movement will accelerate as the relationship between AI talent and human talent grows. This will create a more intelligent, resilient, and inclusive workplace.
The first time this post appeared was on HR News.
