Episode 137: Unlocking Organisational Resilience Through a Skills-Based Approach (an interview with Susan Cantrell & Michael Griffiths)
In this episode of the Digital HR Leaders podcast, David is joined by Deloitte’s Vice President of Products and Workforce Strategies, Susan Cantrell, and Workforce Development Practice Lead, Michael Griffiths.
These two pioneers are leading the charge in changing the way organisations think about their workforce. They have conducted vast amounts of research on this subject, advocating for a skills-based approach that prioritises talent over position titles.
Tune is as this conversation will cover topics surrounding:
Why we are seeing a shift towards a skills-based operating model
What this transition means for HR, People Analytics, and People Managers
How a focus on skills can help create an ecosystem for acquiring, developing, retaining, and mobilising talent
The impact this has on employees
The process that companies are undertaking to successfully transition towards a skills-based organisation, and the challenges that they face, and much more…
Enjoy!
Support from this podcast comes from Gloat. You can learn more by visiting: gloat.com
David Green: Today I'm delighted to welcome to the show two people who are at the leading edge of conceptualising the skills-based organisation, Sue Cantrell and Michael Griffiths of Deloitte. Sue is the Vice President of Products and Workforce Strategies and focuses on the innovation of thought leadership and research as well as the commercialisation of new solutions; while Michael is a partner in Deloitte's Workforce Transformation Practice.
Together, they have been working on the concept of a skills-based organisation and today, I get to pick their brains on what this means for HR programmes and professionals, employee experience and mobility and for creating a more agile organisation, as well as the steps we can take to transition towards a skills-based organisation. So, let's head over to the conversation; enjoy.
David Green: For over a century, jobs have been the dominant structure of work and governed the operating models that businesses and HR are guided by. Recently, we have seen this shift towards a skills-based organisation. What would be great, I think, for listeners and most of our listeners are in the HR space and should be at the forefront of potentially this transition, what exactly is a skills-based organisation and why do you think the shift is occurring. Michael, I will come to you on this one.
Michael Griffiths: Yeah, a great set up, David. You are absolutely right, for over a century historically, jobs have defined how work is done, by whom and how it is managed and led. Ultimately, HR's responsibility has to been to support the job architecture as a focus area, so if you think of from hiring to compensation to career progression to performance management, it's all embedded in HR's impact through jobs. Rarely, if people stopped to talk about, "Is this actually the best way of doing things?" and confining work into tasks and jobs and then making decisions about those defined tasks, it's really hindering the organisation's ability to do what they really need to do today, which is agility, growth, innovation, equity. It is not really driving or giving the ability for organisations to do that. Ultimately, HR's role to drive an equitable and positive workforce environment, skills is one of the ways to move in that direction. So, organisations are experimenting moving towards their skills-based org and it really is a new operating model for work.
Why is this happening? One of your questions. There's a few stats that came out from our research. 71% of workers already perform some work outside of their job description, so obviously jobs aren't really defining what people are doing. Only 24% of workers say that they actually perform the same tasks as people in the organisation with the same job description. So, two stats basically saying jobs really aren't defining what people are doing. And m,any people also are not really saying that they're going to perform their work through a job at all. 55% of our respondents said they have already or are likely to shift workforce models. This means permanent, full-time projects, internal marketplace, freelance and gig, they are literally going to change how they do their work. If they haven't, they're going to do it in the near-term future. So, if you're relying on jobs to architect how you're getting talent or delivering work, it's not necessarily going to be future-based.
Then equity, I think is a really important conversation on this topic, David. 80% of business executives say that making decisions based on hiring, pay, promotion, succession; by making them on skills rather than jobs enables them to reduce bias and improve fairness, so there is a recognition that there is an equitable equation here for moving to skills-based.
I recently had the pleasure of being in a session with Ken Frazier recently, the ex-CEO of Merck, who is the champion of the OneTen initiative, which is a US-based initiative for creating one million jobs for Black Americans in ten years, essentially moving from hierarchical hiring on degrees and certifications to more experience and multiple different ways of doing that, but ultimately in African-American culture. He talks about the importance of organisations hiring on skills, going beyond credentials, degrees and certifications, skills at the centre of that strategy. It really is becoming a C-suite initiative.
I think the other element of it is around changing workforce expectations: the autonomy, the growth, the focus on human sustainability and stakeholder capitalism. Work agencies are absolutely on the rise and we talk about this in our human capital trends actually but specifically to this topic, I think the agency element is coming alive, but also the ability and maturity of workers to say that they're okay with people utilising their data.
There is an HBR article that came out last year that 90% of workers are willing for organisations to use their workforce data, including skills as one of those key components, if they can demonstrate how they're using it to further their workforce experience. So, the worker is at the point of saying, "Please access it, but utilise it in a way that benefits me". Our study, which I know led to our conversation here, David, we surveyed over 1,000 workers and 225 business and HR leaders, as well as dozens of executive interviews, and we essentially found a plethora of organisations doing experimentals, so pushing on one talent process with skills or dipping their toe with different tech or experiences, but only 5% to 10% of organisations that are really driving manageable or impactful change really enterprise-wide and driving business and ultimately workforce experiences across the organisation. But those organisations that were, we found 63% are more likely to achieve results, and I'll talk about what they mean by results in a second, business and HR results, more than those organisations that are not moving towards skills.
Some of those impacts are really quite transformational. We found that these organisations are 107% more likely to place talent effectively; 98% more likely to retain high performers; 79% more likely to have a positive workforce experience; and I think this last one is critical, 57% more likely to anticipate change and respond effectively and efficiently. So, it is absolutely an imperative for organisations and why we're so passionate about talking about it.
David Green: Sue, I'm going to turn to you now, what does a skills-based organisation actually mean in practice? Can you tell us more about what this operating model looks like?
Sue Cantrell: Yes, we really do think about it as a new operating model, not only for work but for the workforce. When we think about it, it really has four components. The first is to reimagine what we mean by workers, so right now we tend to think of workers as being employees in jobs. And I think the big shift here is to think about workers as individuals, not just jobholders. We almost call it a workforce of one where we're recognising and seeing workers as individuals that could be on or off balance sheet, each with a unique ability to make contributions, with a portfolio of skills and capabilities to make meaningful contributions to a range of work.
I just want to pause here and define what we mean by "skills", because this is the basis of obviously the skills-based organisation. We broadly define skills to encompass not only harder technical skills, think coding, data analysis, accounting, but also human capabilities. Those would be things like critical thinking, emotional intelligence, the ability to team, and then finally potential, and I think this one often gets overlooked and I think it's critical. It would be things like adjacent or near skills. What are those skills that could easily be transferable and with a little bit of development turned into the skill that an organisation needs? It would be latent qualities and abilities that can be learned and developed for future success.
We think about workers based on this broad portfolio of types of skills and when workers are really unbound from being defined by their job, then work is no longer a one-to-one relationship between employees and jobs but rather it is many relationships between work and skills, and that opens up all kinds of new opportunities; that is the first component. The second component is to rethink work from being only organised in jobs, and a functional hierarchy, to being a portfolio of ways to organise work, including and beyond the job. I say that because we don't think the job will ever go away. What's happening here is that we're seeing a divergence, a way of organising work beyond the job, so organisations have a portfolio.
What do I mean by "beyond the job"? There are two ways of doing that, one is what we call fractionalising work. That is breaking work down into projects, tasks that can continuously evolve as business needs change and then workers with skills and capabilities can flow to those projects and tasks. We are seeing that obviously in internal talent marketplaces, that is what we call partial fractionalisation. That is where workers can take a percentage of their time, they're still performing their core job, but then they can flow anywhere in the organisation to projects and tasks.
We are seeing this fully fractionalised approach in a couple of organisations, where over 75,000 employees work in this kind of fully fractionalised model. An internal talent marketplace governs how talent flows to specific projects and work is structured into self-organising, fluid, micro-enterprises with 10 to 15 workers, which are on or off balance sheet each. The other way of organising work beyond a job is to broaden the job. This is organising work around outcomes or problems to be solved. It's really making it broader, opposite of narrowing it in fractionalisation.
When we did our survey, 79% of HR leaders say they are already evolving roles to be bigger and more integrative. They're oftentimes evolving these roles to embrace adjacent job functions, so an example of partial broadening would be Cleveland Clinic. They have doctors, nurses, they've broadly defined all staff as caregivers and what is really interesting is instead of organising by medical specialisations, groups instead are formed around patients and their illnesses in multidisciplinary collaborative teams. Again, it is around those outcomes they are trying to achieve. And then some organisations, just a few, like Morningstar, are throwing the job away entirely and each worker drafts their own outcomes and problems to be solved, and then authority and pay are based on skills, expertise and value created.
Just an interesting data point, when we asked both workers and leaders about what they felt would be the best way to organise work, only 19% of business leaders and 23% of workers say jobs is the best way to create value for workers in the organisation. Business leaders tended to prefer fractionalised work, workers tended to prefer broader work, but both of them preferred work outside of the traditional job. So, that's the second competent of skills-based organisation.
The third is to use skills, more than jobs, to make decisions about the workforce. This goes throughout the entire talent lifecycle, everything from skills-based hiring, skills-based team composition, can you match workers' skills to teams to create optimal team compositions; skills-based careers using AI to suggest career experiences based on skills, interest potential, skills-based learning. Traditionally, we assigned learning based on people's jobs; can we instead suggest learning based on their skills, their skills gaps, their interests, skills-based pay? I could go on and on.
Then, the fourth component of a skills-based organisation is what we call a skills hub. Really this is the engine or the infrastructure that powers the skills-based organisation. Underneath this would be things like, "Do you have a shared skills-based talent philosophy?" because really it is that red thread that pulls together all of our workforce or talent practices, "Do you have a common language for skills and ways to organise it? Do you have the right skills data and technology enablers?" So, all of these four components come together to make this new operating model for work and the workforce.
David Green: That is really helpful the way you have laid it out there, Sue, and I am guessing that using skills more than jobs to make decisions around talent, from hiring all the way through the examples that you mention, that really talks to the equity piece that Michael highlighted as well, where we can potentially broaden the initial talent pool that we're looking in, in an organisation, so if we base it on skills rather than education, and that supports a lot of initiatives and maybe supports the "S" in ESG that a lot of organisations are striving to achieve as well.
Sue Cantrell: Absolutely. It results in equity, fairness and then better decisions honestly. A lot of them can drive greater agility.
David Green: Michael, turning to you, this change is a significant shift, you've both highlighted that, from the job space model that we have always known. Sue highlighted all the HR programmes that we've been delivering as HR professionals for years and how they will change if we look at it with a skills lens. What does this mean for HR; and also maybe what does it mean for the people analytics function as well?
Michael Griffiths: Yeah, great question and obviously a lot of the listeners are going to be key to thinking about what does this mean for their job, for their function, their capability. Every HR practice is based upon the notion of a job, traditionally. That is obviously a transformational journey. If we're moving beyond it, exactly as Sue's point, it's not taking away, it's beyond it. But beyond does offer opportunity as much as challenge and I do think that's an important conversation here. This is an absolute opportunity for HR to deliver value beyond their traditional models of talent management.
I do think there is huge opportunity, but it is happening so if anyone is sitting there and saying, "I can continue doing what I'm doing, I'm not sure that that's really the best plan", 72% of business and HR executives in our survey agreed the role of HR will move from managing employment to orchestrating work, so this is a big shift. Think about you're not managing people anymore, you're orchestrating work and I do think that shift, as Sue talked about from fractionalising and broadening work, rather than managing talent processes, is a big shift. So, if you don't understand how work operates and how teams flow, how tasks and projects are formed, but more just work through your talent processes, then I think you may be missing something.
This aspect of broadening is very important. 77% agree that HR should transform from a siloed function to a boundaryless discipline. We have written about a boundaryless a lot in our Human Capital Trends coming out in January, but I think this aspect of setting up new fundamentals, and skills-based is one of those, for HR to adopt some sort of consistency in this lack of boundaries is a very key component of that. What does that mean? I do think the important thing for HR is that everything that Sue just talked through is in the realm of HR to govern but not necessarily to own. Finance is going to need to change the way it values work so that HR can set compensation levels; procurement will need to access and deploy skills much better when they're looking at hiring and freelancing, and HR is obviously going to have partner with them in that perspective.
But even further up the value chain, strategy and operations will need to think differently about how they structure and organise work when they're putting those strategies together. So, HR can be the champion here, but it needs to coalesce partners across the organisation. 90% of business and HR executives say that moving to a skills-based organisation will require transformations for all functions and leaders, not just HR, so the data is absolutely telling us this story.
David Green: It's good that companies, executives and people are recognising the change at least.
Michael Griffiths: The areas of Sue's fourth point around creating a skills hub is critical here and the key component of that is data. There are multiple layers for skills data, there is actually the data, future-based and current-based skills data. You can't rely on what sits within your organisation, you're absolutely going to have to think about data flow and sources of data to keep you on future skills and where organisations should be going deep on those critical skills. So, you need good data and only 68% of business and HR leaders say they are confident that the hard skills they have documented on their workforce are verified and valid, and that's an important point here.
We're saying, even if you do have data there, is it verified and valid that your people actually have those skills? Deloitte has actually developed its own human capability assessment in partnership with the University of Washington, because we think there's a massive gap just on self-reporting and manager approval, and you need to find different ways of inferencing on those skills, so finding how work can tell you whether people have these skills and other types of things and then AI capabilities to make some logic and connections through your talent processes and work. People analytics need to understand what's out there in the marketplace, what to build, buy and then how does it all map together and drive the opportunity that HR is trying to drive through in the organisation. So, huge challenge but again, as I said at the start for HR, massive opportunity.
David Green: Just a follow up on that, Michael, we talked earlier about HR and people analytics and obviously the need to partner with other business functions. What does it mean for managers and leaders outside HR? You talked earlier about potentially they can be a little bit more agile and react to change quicker and obviously that's a benefit, but what does it mean in their day-to-day of managers and leaders?
Michael Griffiths: It's a great question, and we've written again in our Human Capital Trends report about leading in a boundaryless world, because we think leaders have a massive challenge today. Whatever you do in your organisation, your frontline workers, leaders at all levels, and I will talk about management in a second, are ultimately where the rubber hits the road. If you don't enable them to be successful in your change and shift in operating model, etc, then the workforce is not going to be able to go along with them. Leaders have to enable that broadening of work and focus on the outcome and enable their teams to get to that outcome, and those teams could be multiple across the organisation, outside the organisation, could be technology helping them achieve that outcome, but they have to orchestrate that work rather than managing or leading people necessarily.
That complexity of a leader in this world has absolutely changed and made it much harder. However, some organisations are saying, "Okay, let's just call it a project manager", so people are project managers based upon these evolving teams and focus areas, and not necessarily a manager and a mid-level component. So, I think there is element of that. If managers do go away in these organisations, it then highlights the need for good leadership, because it emphasises that leader across all the levels for people to go to, to feel connected to, and this is where culture comes in. Without managers' components, leaders have to really hold and carry the bag of culture.
David Green: It's going to be fascinating, isn't it, to see how it plays out. For those listening, there was a really good HBR article last year, by Lynda Gratton and Diane Gherson, that looked at the role of the manager as we move into this new world. And actually, I think there was an example of Telstra in Australia, where they have managers of people and managers of work.
Sue, turning to you and obviously we've seen this playing out over the last few months in particular, a lot of organisations particularly in the tech space have been experiencing a skill shortage, that's been going on for some time now. And of course, over the last few weeks or few months, we've seen a lot of layoffs within that industry, vertical in particular. How can a focus on skills help create a better ecosystem frankly for acquiring, developing, retaining and even mobilising talent?
Sue Cantrell: I think the skills-based approach really helps organisations be in a good place in either scenario, with either talent shortages or in the case of layoffs. If you did the foundational skills work ahead, one of the things we're seeing with client work is that they're better able to win the war for talent; and if they have layoffs, they're either able to reduce them or help workers be more employable so that it creates that human sustainability, and they're still doing good for their workers.
So, how does that happen? One, I think probably the most important one, is being able to fluidly move skills to shifting business priorities through going beyond the job is critical. In this case, one of the things you can do is redeploy workers, so if you have a big demand in one area of your business and softening demand in another, you can redeploy them; that can reduce layoffs. Using the ability to identify adjacent or foundational skills, you can move people to new work. We asked in our survey and 54% of leaders say using AI to identify that hidden or adjacent skills would help them retain displaced workers and help them reskill them.
Of course, this also helps with growth. If organisations are able to move workers to new types of work, then everybody learns, there's growth, development, mobility opportunities and we all know that growth and development is one of the big drivers of retention, so that helps also with talent shortages. You can unlock that trapped capacity and better utilise the skills of workers.
The second reason why I think it leaves organisations in good stead in either scenario is you can develop the skills with a skills-based organisation approach. If you develop them, then organisations, even if they have to lay off workers, they're more employable. The issue here is that when we asked I in our survey, 77% of leaders say their organisations should help workers become more employable with relevant skills, but only 5% strongly agree that they're investing enough and helping people learn new skills to keep up with the changing world at work. So, this is a missed opportunity; it not only helps your organisation, but it helps them in cases when demand softens, and they need to be employed elsewhere.
Skills-based hiring is another one. We asked in our survey; 70% of those respondents said they're getting more creative about sourcing for skills rather than job experience in light of talent shortages. So, a couple of interesting examples here. There was a telecommunications company that we interviewed, and they needed machine learning skills. Of course, that's one of the hardest skills to get out on the market, especially for one when you're not in the tech industry. Those workers, they were just too hard to hire, so what did they do? They analysed profiles of thousands and thousands of workers who identified themselves as machine learning experts and then they looked at what were their pathways; what were their adjacent skills that then they built on to develop those machine learning skills; what were their experiences? Then, they developed algorithms to search and hire for those. They didn't have machine learning jobs, they didn't have machine learning degrees, but they were able to increase their talent pool by three times than what the company thought it was because they were able to do that.
Then, the last point I'll make is the ability to share data on skills across organisations can also help. Right now, when you think about it, most data on the skills of workers, especially that employer verified data, not the self-report data on skills, it sits inside of a company. But when workers leave, all of their verified records typically get left behind and this hinders the ability for them to move between permanent roles, projects, gigs, across organisations. If organisations can help them retain that data by using technologies like blockchain or skills passports, then that will help workers be able to move more fluidly and be more employable.
David Green: Sue, just as a quick follow up, what does all this mean when you were just talking about for employees? I know when we have spoken before, you talked about the wellbeing aspect of a skills-based organisation as well.
Sue Cantrell: Yeah. Well, first of all, workers want this. 73% of workers said skills-based practices would improve their experience at work, about 66% said they'd be more likely to be attracted to and remain under an organisation with skills-based approaches. Then, when we asked them around, "How would you like your organisation to make decisions about you, when doing things like hiring or deploying them to work?" I think we asked 11 factors or 11 types of data sources; they want decisions to be made based on their demonstrated skills first, and it was 18% higher than education and degree and 11% higher than their current or prior job experience.
So, clearly workers want this, and I think the question is why. A couple of reasons, one is they can be seen as an individual rather than masked as a job holder. It opens opportunity, we are not constraining their opportunities based on their degrees or direct prior job experience. And I think an interesting point on this is that it helps them realise their potential. I was a little flawed by the fact that only 14% of business leaders strongly agree their organisation is using their workforce's skills and potential to their fullest potential, and only 26% of workers strongly agree.
What happens is, defining workers by their jobs sub-optimises people's potential because it obscures their full range of capabilities, but if we can break out of that and think of workers as a range of skills, capabilities, potential, but also interests, passions, motivations to be able to see them as their full picture, then we can let them continuously learn, try new things and in a way it's almost looking at everybody as a high potential. We used to only have those developmental experiences reserved for what the organisation deemed as high potential but today with technology, we can move them around projects, give them the developmental opportunities and the coaching and mentoring that was only previously reserved for a few.
David Green: Michael, I'd like to talk a little bit now about the process of creating a successful skills-based organisation. Obviously, we have highlighted a little bit about technology, it's clearly an important aspect of this but perhaps a more critical enabler of success is effective change management, which I know at Deloitte you'll be experts about. Through you research, what are companies doing to successfully transition towards a skills-based organisation?
Michael Griffiths: The crux of that question is really evolution, not revolution. We have talked about this being a massive shift, it absolutely is. For organisations, we see success is taking bites of the apple rather than trying to do the whole piece at once. When you consider areas of your organisation or parts of your talent process, the clients we work with are looking at areas where skills are changing so fast that their talent practices can't keep up. It could be areas of the business that are doing that, it could be where you're getting feedback that you're losing diverse thinking or skillsets, or you're lacking innovation, creativity, product development, etc, or you're losing top talent and you're hearing from your organisation their lack of transparency to opportunities.
On that particular topic, we've been working with Chris Ernst at Workday, who's the CLO, and he absolutely talked around a lot of the feedback they got from their organisation was that their people didn't feel like they had opportunities to develop, and there wasn't a lack of transparency for people to move to the next level, so they really focus on a talent marketplace for their workmates, and they've got quite staggering stats at how people signed up and moved in that market. That was their key component for this evolution aspect and then they're looking across different areas, are utilising Skills Hub to develop a value across learning and other talent processes. So, I do think it's that evolution aspect of it.
Secondly, I would say really lead with the why. I often talk to our clients who obviously, like you said on this particular podcast, but also who we work with mostly, sit in the HR function or some sort of areas of that side to the business. My biggest point when they start to put steering committee decks together or leading perspectives for executives is, don't say you're becoming a skills-based org. People outside of HR really don't care about that topic or that term, it's around what is actually value; what is it driving to the business? So, are you trying to create better agility to speed to market, better adoption to customer needs, putting the skills where the business needs them, more opportunities for the workforce to grow experiences? Now, a lot of businesses like that, we want to hold critical talent and we want to drive to that, so it's absolutely an aspect of it.
Also, even more tangibly for businesses, it could be we want to reduce variable costs. That could be, if we find the ability to move people into talent needs or business needs more in an agile or a faster way, we might not need to use more external workforce. We can get more out of our core workforce and literally that could be dollars and you can define that. That ability to drive with the why and put it into business terms is absolutely critical as you move forward.
Then as you think about the first steps, what is the lowest hanging fruit? Definitely swim downstream. If there's a key component between skills and learning and development and that's one of the key components from a business perspective that you want to drive towards, absolutely go after that. There's technologies, there's abilities, skills to learning, and as Sue articulated earlier, it's absolutely a way that you can drive some value and you can show that and build it.
The third area that we've seen a lot of organisations work is obviously the talent marketplace, that untapped capacity. We're probably seeing the most lift in those three areas, but then we're seeing workforce planning and other areas that are starting to drive value to, depending on the challenge. I would say those three steps, definitely think about it first of all as an evolution. Think about the why and the business case and then go after your lowest hanging fruit.
David Green: What are some of the biggest challenges that organisations need to overcome because again, I am not going to pre-empt what you say because I don't know what you're going to say, but I imagine a lot of this does involve a lot of breaking down some of the traditional silos that we have in our organisation, I imagine being one of those, but I'd love to hear what the biggest challenge is that companies are having to overcome.
Michael Griffiths: Actually, it's a specific question we asked in our research because we were really interested in it and I'll obviously add some anecdotes from our client work and conversations too. But I was quite fascinated by the intensity of the response in our survey. We asked across I think 12 different dimensions, "What would the top three barriers that you observe in moving to an organisation change?" There's things in there about insufficient skills data, which I could imagine being a challenge; inability to evaluate performance based on skills as a specific challenge, I definitely saw that would come; lack of effective skills-related technology, we absolutely thought that would be a challenge. Those three that I just mentioned were in the bottom four.
The top one was legacy mindsets and practices. It's people's ability to change, and it was 46% chosen out of the top, so a fascinating aspect. The second one was difficulty keeping up with the changing skills needed by the business, so that speed, ability to match where the business is going. So, yes, that infrastructure around change and getting close to the business and then moving people away from it, and I think that movement is both business but predominantly HR.
I think this element of change management, as you have said before, is absolutely critical which is why we're seeing organisations create a skills capability in their organisation that either sits within learning development, which happens predominantly, or in a COE to start breaking down barriers and create change and have a business leader and exec be the key sponsor of it, because you need someone to really push and govern as you move forward.
David Green: Sue, if we look to the future a little bit, and you're particularly good at doing this, what would be the potential challenges of tomorrow if we continue to go down this path towards the skills-based organisation?
Sue Cantrell: David, I think one of them, and it's a big warning point, is never lose focus of the human. The skills-based organisation is all about making it more human centric but there's a danger that some organisations can have, if they go about it in a particular way. One is over-indexing on skills, so we think it's very, very important of the human capabilities, the hard skills, the potential but in reality, they're just one part of the equation of what makes us human, right? The other important aspects should never be lost; motivations, interests, location preferences. I think actually, the way Michael and I think about it is, skills is the first stage in an evolutionary journey towards being able to collect data and make decisions, based on a whole range of data points of what makes a person human.
Another challenge is making sure that we use all these new sources of data and AI, which a skills-based organisation is heavily dependent on, responsibly. That means things like, "Is your organisation clearly telling workers how their data is collected and used; are you giving benefits back to the workers not just for the organisation; and do they understand them in terms of new opportunities for growth and development, fairer and more meritocratic hiring, pay, or promotion decisions, more customised work experiences and the like?"
Some people have pushed back and said, "One of the dangers is that if you use AI to match skills to work, in particular tasks and projects, is that mechanistic; is it inhuman; where is the choice in the worker?" You always want to keep the human front and centre and you don't want to parcel out work just on AI algorithms, you always need to keep the human in the loop.
The other interesting challenge, I think, is when workers are more quantified, if you will, in terms of who's most highly skilled, then they can become more easily discovered and better rewarded. This may give rise to almost a hyper-meritocracy with most of the rewards and opportunities going to the most highly skilled. I think the caveat to that is, make sure you don't just focus on the skills that workers have today. This is why we think that potential is so important. Almost adjacent and near skills and potential is almost I think equally if not more important than the skills workers have. You want to keep that in mind because it should be about development as well, not just rewarding people for the skills they have already.
David Green: Is there anything else that's on the horizon for this shift that you'd like to highlight as well, maybe what you think might be coming in the next two to three years around this?
Sue Cantrell: Yeah. So, I talked about beyond skills saying people as full individuals. I think organisations are struggling to find a common language of skills within their organisation. I think the next shift will be across organisations and there has been some consortia trying to work through this and that will help with a more frictionless labour market. I think we're going to see the merging of internal and external talent marketplaces coming soon, where you'll have almost a single pane of glass looking at skills from whatever source they are.
Then, I think we're going to continue to see organisations become far more fluid, eventually, gradually creeping out beyond the job more and more. Right now, talent marketplaces are voluntary, they're a portion of people's time, they're often seen through a developmental lens more than a business lens of enabling greater agility. I think it raises the question of, what happens if the work workers want to do no longer aligns with the work that organisations need them to do? That is going to have to be unwrapped and unpacked. And I think we're eventually going to see organisations continue to push the envelope on jobs beyond just the short-time voluntary piece in talent marketplaces.
David Green: It'd be great to sit down with the two of you in three years' time and see where we've got to on this and what the hot topics are at the time. Michael, I'm going to come to you on this one, so this is the question we're asking everyone on this series and obviously we've been talking about it throughout the episode so far; how can a company get started to successfully shift from a focus on jobs to instead a focus on skills? You've talked about some of the things that people can do, such as making sure they start with the why, what they're trying to achieve and look at that lowest hanging fruit, and taking small chunks of the apple at a time, rather than thinking of it as an enterprise thing right from the off. But are there any examples of companies that you've worked with, or you've seen, that are doing this well?
Michael Griffiths: A great question and I'll just go through some examples because I think we've talked a lot around steps. Let me just throw out some examples there. We've worked with Cargill over the past few years to become a skills-based parallel pathing, their transformation for L&D to become skills-based, in partnership with their digital first learning strategy; then moving into skills-based hiring, building up a talent marketplace. And as they did that, as I said, they really worked on those hub elements, the taxonomy, the ontology for data, the business strategy and vision. The CLO, who owned a lot of this transformation, basically walked around with a two-page deck and created a video for the value of the exercise as she moved through these different talent process.
A second example, a financial services organisation, working on job architecture, their particular business leader who was in charge of this really on the side of the desk said, "I know this is going to be a transformational journey for us, but let's put skills into this job architecture work and start mapping skills to jobs as we build out our job architecture and to create change". It was a change management journey to do that project that way.
A life sciences organisation, they're focused on really becoming a skills-based organisation and starting with the philosophy and the value proposition first. They created a skills-based mapping playbook, essentially mapping the skills ontology and proficiency levels to learning objectives, so again moving to learning, but they did start with the business case value proposition, etc, philosophy first. Then at the same time, they looked at hot skills, or those skills in demand or short supply, and built some talent processes around those hot skills. They are looking across the talent process but again that is how they started.
I think Unilever is the example where they talk about focusing on work, really democratising work into a way they can think about as demand. So, as you think about moving towards the idea of a marketplace, which is the key component of Unilever's journey with a particular technology provider, they ultimately were looking at internal and external workers in that marketplace. They talked about the "U-Worker" which is a worker that is has a guaranteed minimum retainer along with core sets of benefits, and that is a key component here, they get benefits as well. I think this has been written about extensively.
When we look at that case, they are looking at demand element of work and then supply element of skills and mapping that together. As you identify that work and then map the skills to it, there's absolutely a compelling business case and multiple elements of talent processes and business impacts that you can then put towards C-suite, and then get more funding for additional areas.
So those are just a few. We've got multiple different ways, as you can see. There's aspects of different talent processes but ultimately you do need to get to the core of the apple as you take bites, building that skills hub, and create that taxonomy, that digital strategy and the change management and business execution as you do it.
David Green: Michael and Sue it's been a fascinating conversation. I reckon we could have made it a two-hour episode, but I think we've probably made it long enough for those listening. Thank you so much for being guests on the show and thank you also for the work that you're putting out into the field to educate us about the skills-based organisation; it's really good.
Can you let listeners know how they can find you on social media; find out more about your work at Deloitte? Michael, I will come to you first, you might want to highlight the Human Capital Trends, which I think is being published around the time that we're publishing this episode, which is 17 January. Just interesting when the Deloitte Human Capital Trends is being published as well, so I will come to you first, Michael and then, Sue, I will come to you to round things off.
Michael Griffiths: Yeah, I'll let Sue talk more broadly but absolutely, thank you for highlighting that, David. The Human Capital Trends Report by Deloitte is coming out mid-January. It's a compilation of what we've talked about over the last few years. It's our 12th year that we're putting it out, we're very proud of this study, over 10,000 respondents globally, so please look out for that. But, Sue, over to you.
Sue Cantrell: I encourage listeners to find some of our research. We've published a lot, we've published shorter infographics, a primary article and then for those who are data geeks like myself and probably Michael, we've published our full research findings in kind of a highly visual format. It's over 100 pages, we have 50 case studies. So where can you find this? The website, www.deloitte.com/sbo houses the gamut of everything we've published. And for our primary article www.deloite.com/skillsbasedorganisation, is our primary article.
Then, of course, we encourage you to LinkedIn, Michael Griffiths and Sue Cantrell. Reach out with questions, your interests, we're always happy to engage.
David Green: Thanks so much for being on the show. I look forward to hopefully meeting you in person at some point this year when I'm either in the US or either of you are in Europe.
Michael Griffiths: Thanks so much.