Skills-based organizations are thriving. CHROs who build the right skills intelligence infrastructure are unlocking talent, mobility, and lasting competitive advantage.
Julie Jares
Director, Newsroom, Thought Leadership
Workday
Gardener. Carpenter. Smith. So many of the trades our ancestors mastered became surnames, leaving us a legacy of job titles as an identity.
Today, what someone can do matters far more than what their title says they do. The organizations willing to see their workforce through the skills lens are discovering a much bigger talent pool than they realized.
According to the Workday Global State of Skills report, 51% of business leaders are concerned about a looming talent shortage, and only 32% believe their organization currently has the skills needed for future success.
Closing the gap between knowing skills matter and actually being able to see, develop, and recruit for the right ones is where the real competitive advantage is waiting. The pressing question for CHROs now is whether their organizations have the intelligence infrastructure to do exactly that.
Guide
Here's the challenge most organizations are sitting with right now: they believe in skills-based thinking, but they're operating without the data to act on it.
Only 54% of leaders say they have a clear view of the skills that exist within their organization today. Think about what that means in practice:
Only 54% of leaders say they have a clear view of the skills that exist within their organization today.
This is the visibility gap, and it is a linchpin to solving virtually every other workforce challenge. Internal mobility, talent development, workforce planning—all of it depends on having an accurate picture of what your people can actually do. Without that foundation, even the best intentions stall out.
Skills intelligence changes this. When leaders have a real-time, dynamic picture of what their workforce can do, workforce decisions stop being reactive and start being strategic.
Knowing the gap exists is one thing. Closing it is another. For CHROs ready to move from intent to action, these three strategies are proving out the concept and offering a practical path forward.
Start with skill identification
Before anything else, organizations need an accurate picture of what their workforce can do. This means moving beyond job titles and resumes to build a real-time, AI-powered inventory of skills across the organization. These can be inferred from job descriptions, project work, employee profiles, and labor market data, then validated with business leaders.
Best Buy Canada used this approach to drive a 30% increase in skills listings on employee profiles, a 14% year-over-year increase in internal fills, and a 16% decrease in staff turnover.
Hire for what people can do
With a skills foundation in place, hiring changes fundamentally. Rather than filtering candidates by credentials or previous titles, skills-based hiring evaluates what candidates can actually demonstrate. This expands the talent pool significantly, while also making it more equitable. The Global State of Skills report showed that 82% percent of leaders say skills-based approaches provide greater access to opportunity.
Our experience at Workday bears this out: After standardizing hiring around critical skills and behavior-based interview rubrics, we saw a 32% decrease in time-to-hire and an 11% increase in offer acceptance.
82% of leaders say skills-based approaches provide greater access to opportunity.
Develop from within
External hiring will always have its place, but the data makes a compelling case for internal mobility. Employees who move internally are 80% more likely to be rated as top performers in their first calibration in a new role. Organizations that build upskilling and reskilling programs around identified skill gaps create a talent ecosystem that compounds over time. The key is connecting employees to opportunities that match their strengths and career goals.
This is skills intelligence in action: not only knowing what your workforce can do today, but also actively developing what it will need to do tomorrow.
Skills intelligence at scale wasn't really feasible before AI. The sheer volume of data involved, from job descriptions and employee profiles to project histories and labor market signals, made it impossible to manage manually. AI changes that equation entirely.
With the right foundation in place, AI can build and maintain a dynamic, real-time map of skills across the entire organization, surfacing gaps before they become critical and connecting employees to internal opportunities they might never have found on their own.
And the workforce is ready for it. Workday research found that 83% of executives believe AI can help mitigate skills shortages, and 93% of active AI users say it allows them to focus on higher-level responsibilities like strategy and problem-solving.
83% of executives believe AI can help mitigate skills shortages.
That last point matters. The goal of skills intelligence isn't to automate talent decisions; it's to free leaders up to make better ones. As AI takes on the analytical heavy lifting, the uniquely human skills that have always driven great organizations—judgment, empathy, relationship-building, ethical decision-making—become even more indispensable.
Building skills intelligence is one of the most consequential things a CHRO can do right now. Workday research shows that 55% of organizations are already on the journey to becoming skills-based, with another 23% planning to follow within the next 12 months. The window for early-mover advantage is open.
With the right infrastructure in place, CHROs can design a living, intelligent system that connects people to opportunity, aligns capability to strategy, and helps the organization grow into whatever comes next.
Guide
In the past decade HR has undergone a major evoluton from a supportive role to a strategic one. However, as this report finds, HR teams are more conservative on AI than finance and IT. That makes the potential competitive advantage even greater—learn more below.