Chris Ernst, chief learning officer at Workday, shares insights gained through the move toward a skills-based talent strategy at Workday.
Chris Ernst
Chief Learning Officer
Workday
The move toward a skills-based talent strategy is strong and growing. What was an emerging “future-of-work” concept just a few years ago is now the talent management vision for many organizations.
By prioritizing skills over traditional factors such as past credentials or background, companies are accessing more talent pools, upskilling their existing talent, and finding new agility in the ever-changing world of work. And now, AI is helping companies accelerate their transformations.
In theory, the concept of a skills-based talent strategy is simple: identify the skills a company has, the skills it needs, and how well they match. Then infuse skills into the talent lifecycle to close gaps and move the business forward.
Yet according to RedThread Research, a whopping 58% of HR leaders surveyed said their organization doesn’t have a skills strategy. What’s more, companies still face barriers and challenges with implementing a skills-based approach, such as legacy mindsets and insufficient skills data, according to Deloitte.
As my colleague Josh Tarr, director of skills-based organization at Workday, says, “Workday customers know the business case for a skills-based organization, but they, too, are hungry for practical information and roadmaps for success. Once they are up and running on Workday, we’re here to guide them on their skills journeys and can share tips and lessons learned based on our own practices.”
I believe that within a few years, the AI-powered skills movement will be the dominant force shaping the world of work. Organizations and leaders that are not learning and acting now will be reactive and at risk of falling behind. Drawing from the insights gained through our own skills journey, we believe these three actions are key to addressing roadblocks and speeding up the process of transitioning into a skills-based organization.
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To realize the extraordinary potential of becoming a skills-based organization, companies cannot view this transformation as solely an HR project. Leaders across the enterprise need to be actively involved. Here’s how to help HR gain the buy-in for a skills-based approach toward talent, which ultimately strengthens the support and partnership required to succeed:
Interview or survey a cross-section of business leaders and pull in your HR business partners to gain a clear understanding of the challenges they have and how skills can play a part in the solution.
Listen to employees to understand their performance, learning, and career needs, and turn those insights into action. Workday Peakon Employe Voice, for example, is a continuous listening platform that captures real-time employee sentiment, facilitates ongoing feedback, and provides personalized, prescriptive recommendations for action.
Establish a senior-level, cross-functional group to create the skills vision for your organization—and then champion and resource that vision.
Initially at Workday, HR led our skills strategy. But when we zoomed out to understand the enterprisewide benefit and set up a cross-functional governance and resourcing model, our efforts took off.
“Once they are up and running on Workday, we’re here to guide them on their skills journeys and can share tips and lessons learned based on our own practices.”
—Josh Tarr, Director of Skills-Based Organization, Workday
In 2022, we established an executive committee representing our Product, Business Technology, Customer Experience, Sales, Engineering, and People & Purpose segments to answer: Does a skills strategy support our company, does it align to our culture, and does it help us compete? We rallied around a shared vision to become a skills-based organization, where skills are core to our strategy, people are at the center of AI advancement, and we accelerate growth for our people and our business.
Lesson learned: Engage the enterprise early on to gain high-level, strategic support, get clear on the problems that skills can help solve, and smooth the path for implementation.
In a skills-based organization, it’s important to define skills, understand the relationships between skills, and map skills to jobs, all of which help deliver a better employee experience. Reliable skills data is the foundation for success.
To ensure skills data is reliable, organizations need data from multiple sources (such as existing job descriptions, internal surveys, and/or industry skills databases) to validate them for your organization and specific roles.
At Workday, we have business-approved critical skills on 80% of our job profiles, representing some 15,000 employees. Even better news? We did it in just over 3 months. This data is now the foundation for implementing our skills-based strategy, from hiring to upskilling to career growth.
The other component of reliable skills data is AI. AI, when used responsibly, can scale skills data quickly and effectively. At Workday, we use Workday Skills Cloud, powered by AI, to understand the skills and capabilities of our entire workforce and help our leaders develop smart people strategies.
Think about it: just as binary (0s and 1s) is to coding, or ingredients to a recipe, you can think of skills as the data language of work. What skills data is doing is taking the world of work—with all its complexity and breadth—and organizing it in a way that AI can understand and interpret. And, in turn, AI analyzes skills, draws understanding from the relationships between skills, and maps skills to tasks workers need to accomplish, such as getting hired, learning something new, or finding their next role.
Here’s an example of how all of it comes together. Say your organization has a professional services consultant role. With the skills data in hand, you can invest in the right training and development that strengthens capabilities critical to success in the role, such as communication, analytical skills, and collaboration, which ultimately fosters clarity on how that employee can best advance their career.
Lesson learned: Prioritize a high-quality data foundation so that business leaders and employees can confidently adopt new practices and take action on skills.
A companywide commitment to transformation combined with trustworthy data will help you envision and create a skills-based future for your organization. But nothing builds confidence in your strategy like getting something done.
You won’t have all the answers and a perfectly built plan without testing, trying, and learning. Start small by identifying skills for key roles or for a single group or function. Partner with a leader who is willing to run a pilot with you to experiment and learn. Pick one area where you can get traction quickly—start there to create proof of concept and build appreciation for a skills approach.
At Workday, we embraced the use of prototypes and pilots to learn quickly, generate support, and identify what to adjust to scale effectively.
For example, an important part of skills-based talent management strategy is creating opportunities for the workforce to move into internal roles and gain more skills. Ultimately, internal mobility encourages employee retention because workers stay engaged by knowing they can continually grow and take on new responsibilities that help the business. That’s why in 2020, we piloted Career Hub, our talent marketplace. We asked a few managers to post short-term gigs for internal talent, and tell us how it went. We got enthusiastic responses and feedback that helped steer our next steps.
At Workday, we embraced the use of prototypes and pilots to learn quickly, generate support, and identify what to adjust to scale effectively.
As of July 2024, 64% of Workmates are leveraging the benefits of Career Hub, a resource that leverages AI to recommend internal moves, gigs, mentors, learning, and more. More than 4,200 Workmates participate in Workday gigs, and gig participants are 42% more likely to move into new or different roles internally. Additionally, according to Workday Peakon Employee Voice sentiment, gig participants showed greater employee retention in the 12 months following a gig—meaning improved sentiment about career growth at Workday—compared to those who didn't participate in a gig.
Another example is a recent pilot of skills-based hiring in our sales organization. We identified the seven critical job skills necessary to perform effectively as an account executive (AE). By focusing on these skills in recruiting and interviewing job candidates, everyone involved could quickly and consistently identify the best talent for the role. As a result, we hired over 400+ account execs in 9 months, cutting time to fill by 32% and earning an 11% increase of offer acceptance.
Lesson learned: Move quickly from big-picture ideas to opportunities for small wins and tangible results. You’ll gain insight and support needed to propel you further and faster.
The movement toward a skills-based talent strategy is poised to become a pivotal driver of transformation in the future of work. It is imperative that organizations and leaders proactively embrace this shift. By fostering a shared vision for skills across all functional areas, investing in robust skills data and responsible AI, and embracing a mindset that encourages thinking big while starting small, organizations can effectively navigate this transition. Embracing these strategies will not only enhance workforce agility and innovation but also position your organization at the forefront of the evolving business landscape.
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