The time for skills-based management is now

This article is written by Roi Benitez, a digital anthropologist and founder of Skills4Future.

• The problem: While describing job profiles worked very well in the past, defining occupations is outdated and unsuccessful in the digital world.
• Why it matters: In this talent crisis, it is necessary to look at profiles in their full potential and not reduce them to mere watertight roles, allowing us to accelerate internal mobility in a focused and efficient manner.
• The solution: Skills-based management is an innovative and adaptive approach that allows skill-mapping, measuring and developing talent based on skills, that toolbox that we fill throughout our professional, personal and academic careers, appropriate for the contemporary logic that invites us to look at jobs as dynamic, liquid and pixelated entities.

Leaders around the world are facing the pain of talent shortages coupled with the lack of efficient management of reskilling and upskilling programmes, and governments are no strangers to this challenge. Finding, hiring and training talent is costing departments a lot of effort and money, and the people who stay in organisations are seeing their careers promoted in a diffuse and confusing way. The Covid-19 pandemic, the Great Resignation, rising inflation around the world and generative AI have been important condiments to the dish of uncertainty we serve ourselves daily.

Employers estimate that 44% of workers' skills will be altered in the next five years. Six in 10 workers will need training by 2027.

So how do we manage talent differently? Different experiences addressed during the pandemic have shown that management by skills shows a path of super-adaptation in zero time. However, we still continue to manage occupational classifications, such as the International Standard Classification of Occupations, a tool for organising jobs into a series of groups defined according to the tasks involved in each job. This classification comes from none other than the International Labor Organisation (ILO). In this occupational crisis, it is necessary to operate differently, to adapt human capital to the new reality. While describing job profiles worked very well in the past, the definition of occupations is obsolete and unsuccessful in the digital world. But if occupations disappear, what do we do?

I am a backpack of skills

Skills-based management is an innovative and adaptive approach that allows skill-mapping, measuring and developing talent based on skills, that toolbox that we fill throughout our professional, personal and academic careers, appropriate for the contemporary logic that invites us to look at jobs as dynamic, liquid and pixelated entities. This approach allows us to look at the profiles in all their potential and not reduce them to mere watertight roles, imagine the amount of valuable talent that we miss out on by looking at them with the wrong glasses.

On the other hand, it allows us to accelerate internal mobility in a focused and efficient manner. In this logic, the concept of occupation is diluted, and this substantial change radically changes the labour market. Areas are not transformed in isolation, sectors are transformed as a whole. This approach is systemic, it implies looking at entire productive sectors.

One thing I am sure of is that governments that move quickly towards the "skills-based" model will be more competitive and will emerge stronger thanks to a more resilient and adaptable team of collaborators. Adaptation is being able to move quickly in the face of unexpected events, i.e. being agile. Skills are the currency of people. In my experience working in the government of Argentina as Director of Capacity Development for Innovation, I discovered a strong approach to occupational profiles, in my stage as an expert consultant working with companies, I began to visualise that this approach was a beneficial way out. I believe that we are at the right time to make a difference.

A few weeks ago, the World Economic Forum (WEF) published its annual report on the future of work with alarming numbers.** Of the 673 million jobs reflected in the dataset of this report, respondents expect structural job growth of 69 million jobs and a decline of 83 million jobs.** This corresponds to a net decrease of 14 million jobs worldwide or 2% of current employment. Employers estimate that 44% of workers' skills will be altered in the next five years. Six in 10 workers will need training by 2027, but only half of workers have access to adequate training opportunities today.

Managing this complexity with recipes from the past is no longer the solution to these global challenges. We are falling short. Ministries of Education, Labour, Social Development, even cross areas such as Cabinet Offices, need to embrace this new way of looking at people's development and develop public policies for today's labour demands. The numbers are alarming, we need to act, and we need to act fast.

Skills can and do become obsolete. Organisations need people capable of continually learning and adapting to overcome that obsolescence.

The Skills-Based approach or "portable skills" for me is not new. A few years ago, I was blessed to work and learn from Diego Richards from Upskills consulting firm, a Chilean sociologist who changed the question and designed a thesis that today is the heart of an intelligent job retraining algorithm in an unprecedented public-private project. Here I had the possibility to contribute to the design of the information architecture. Changing the question requires a courageous look. Relink is a clear example of how public-private partnerships are necessary. The current challenges are solved by creating consortiums with multidisciplinary teams.

Have you noticed that, on LinkedIn, you can now associate skills with jobs? It's already happening. Jhos Bressin has stated this logic that, post 2019 the workforce is "pixelated" and that careers should be seen as a continuum, in that continuum is this portable skills bag.

The occupational profile is the tip of the iceberg, but deep down we are much more than that. The occupational view reduces us.

The approach I propose requires certain tensions or challenges to be taken into account:

• Data-driven / Product mindset HR: The people and learning areas must adopt a data-driven approach and a product view. I understand that this approach is a radical approach, seek partnerships with businesses to address this complex challenge. Surely there are data and product areas in your organisation, start small until you can either scale the partnership or create your own work cell. I am more in favour of building cross-organisational product squads to address this challenge. I have seen several cases where technology and product have created their own HR area. The pain is there: I think we have the opportunity to pick up the gauntlet and start working with them, and not for them.

• Clean and up-to-date data: Keep skills bases clean and connect the organisation's multiple systems to ensure an update every time employees develop and expand their skillset. Big data is the key.

• Clear and consistent taxonomies: A taxonomy is a clear and common language that allows your systems to dialogue. Each organisation can develop its own taxonomy, or you can take inspiration from the curated taxonomies, ESCO (Europe) and O*/net (US), two international taxonomies. Big data is what creates the taxonomy. Academics such as Carlos Ospino have dedicated themselves to studying and shedding light on these issues.

• Purposeful learning: By understanding the skills of your employees and the skills they need (skills gaps) you can focus on developing specific initiatives for hiring, learning portfolio development as opposed to the learning path (I will talk about this in another article) and internal mobility. A map of skills and adjacencies will allow you to understand necessary actions and costs.

• Encourage you to do things differently: This transition is hard, it's putting on new glasses for the world to come. It requires commitment, it requires discomfort, it requires proper partnerships and time.

But this is the first step. Creating a skills-based organisational model will allow us to better engage talent and make smart investments in learning and development by focusing on the right gaps and making informed, evidence-based decisions.

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