AI is fundamentally challenging old paradigms of success. To realize its potential, we first need to enable our people to be their best selves in all facets of work.
Chris Ernst
Chief Learning Officer
Workday
For decades, leaders in the learning and development (L&D) field have built our organizations like a series of pre-defined boxes. Each box had a label: “Senior Software Engineer,” “Regional Sales Manager,” “HR Generalist.”
This approach made sense when the world moved slower. It gave us a sense of order and a clear way to define roles. But today, the world is anything but slow.
What I’ve discovered on our journey to becoming a skill-based organization here at Workday isn’t novel, but it is a critical differentiator that sets us apart: The biggest organizational liability isn't hiding in your balance sheet. It's the opportunity cost of untapped workforce intelligence.
This is the core premise of a skills-based approach—a philosophy that recognizes a person's complete range of skills—as the true currency of value.
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More than two-thirds of leaders lack confidence that their teams are equipped for what's ahead, and 51% are concerned about a future talent shortage, according to our State of Skills report.
Let’s think about those data points for a moment. This isn't vague anxiety; it's a consequence of a fundamental disconnect between where we are and where we need to be for the future of work. This is signaling that a shift to a skills-based approach is no longer a philosophical debate, but an urgent business imperative.
51% of business leaders are concerned about a future talent shortage.
The organizations responding to this call are gaining a significant competitive advantage, with leaders expecting benefits like improved productivity, greater innovation, and increased agility.
With 55% of organizations already on this path, the pace setters have gotten ahead. It’s time to ask yourself: Is your business prepared to keep pace or be left behind?
While internal mobility is a powerful outcome of a skills-based approach, the benefits extend far beyond career paths. This model fundamentally changes the way we see and value our people, creating a more equitable and agile organization.
By evaluating people based on their actual capabilities, we democratize opportunity. This is a game-changer for people from non-traditional backgrounds or those who might otherwise be overlooked.
It allows our employees to be recognized for their full range of skills, which may not be reflected in their official title, creating a more equitable path for growth and advancement.
Our research shows this has a powerful human impact: 82% of leaders believe a skills-based approach provides greater access to job opportunities, and 72% believe it leads to higher workforce equity.
By evaluating people based on their actual capabilities, we democratize opportunity.
This model also fosters unprecedented organizational agility. In a skills-based organization, a leader needing a specific skill set for a short-term project doesn’t have to post a new job opening. They can query their talent ecosystem, identify individuals with the precise skills needed—even if they're in different departments—and create a project-based team. At Workday, we call these “gigs.”
Think of it like a sports team where the coach doesn’t just rely on a player’s position, but on their skills to make the winning play. Having dynamic and agile skills to deploy at a moment’s notice means less ramp-up time, and a quicker pace to meeting business objectives.
This fluid, dynamic allocation of talent allows the organization to respond to market changes, new opportunities, and unforeseen challenges with speed and precision. It’s a shift from a fixed, hierarchical model to a flexible network of talent. In essence, democratizing opportunity fuels organizational agility.
Now, let's address the role of AI in this transformation. The rise of this technology, from large language models to advanced automation, has fueled fears of a future dominated by machines.
But I see it differently.
AI isn't the antagonist in this story; it’s the protagonist that makes a skills-based organization possible at scale.
AI-powered technology can analyze vast amounts of data to create a dynamic, real-time map of all the skills within an organization.
Once these insights are combined with skills-first approaches to work, your workforce’s untapped potential isn’t collecting dust on the shelf anymore.
AI isn't the antagonist in this story; it’s the protagonist that makes a skills-based organization possible at scale.
AI and the insights it provides frees us from the administrative burden of skills management and allows us to focus on the truly human side of talent development.
Recent Workday research from our report, Elevating Human Potential: The AI Skills Revolution, found that 83% of respondents believe AI will actually enhance human creativity, and a remarkable 93% of active AI users say it allows them to focus on higher-level responsibilities like strategy and problem-solving.
This isn't about AI replacing humans; it's about AI supporting and generating greater human potential through work intelligence.
In this new landscape, the most valuable skills are those that are uniquely human. Our research also identified four skills least likely to be replaced by AI: ethical decision-making, emotional intelligence and empathy, human networking and relationship-building, and conflict resolution.
These are the skills that build trust, foster collaboration, and drive true innovation. They are the bedrock of a thriving, human-centered workplace.
Yet, we're seeing a critical disconnect: while 82% of individual contributors believe the need for human connection will intensify with AI, only 65% of managers share this view. This is a powerful signal for HR and L&D leaders.
This is a leadership moment, not just an HR initiative. It is our collective responsibility to bridge this gap and actively cultivate the uniquely human skills that will define our future. We must ensure that even as we embrace new technologies, our people remain our greatest asset and our ultimate source of competitive advantage.
The journey to a skills-based organization is not instantaneous, but it is achievable. Here are three key steps for HR and L&D leaders to get started:
The first step is to move beyond disparate and siloed skill lists. You need a single, integrated framework that maps out every skill in your organization, from hard technical skills to critical soft skills.
Josh Tarr, director of skills-based organization here at Workday, discussed this in depth in a recent Reddit discussion, saying “Think of skills as the common language between humans and AI agents. As AI takes on more tasks, it's not just about what humans do, but the underlying skills they bring and need to develop alongside AI."
Think of skills as the common language between humans and AI agents. As AI takes on more tasks, it's not just about what humans do, but the underlying skills they bring and need to develop alongside AI.
Josh Tarr
Director of Skills-Based Organization, Workday
The complexity of managing skills at scale is overwhelming without the right technology. You need the right technological foundation that can identify skills from job descriptions, project work, and employee profiles. This makes skills visible and actionable, providing a dynamic inventory of talent across your entire organization. With this foundation, you can move from a reactive to a predictive model of talent management, anticipating skills gaps before they become critical.
Once you have a skills foundation, you can redesign talent and learning processes. Instead of promoting based on seniority or a static title, you can create new roles and career pathways based on skills. Learning also becomes personalized and proactive. A system can recommend a course on a specific skill needed for a project a person is interested in, making development more relevant and engaging.
The future of work isn’t about roles; it’s about people and their limitless potential.
The real currency in today’s labor economy is skills. A skills-based approach changes our focus from what a person is called to what they can actually do. This philosophy liberates both individuals and the organization, creating a more flexible and dynamic workforce.
For leaders, it’s about building a future where everyone has the opportunity to learn, grow, and contribute their unique talents. It’s a future where we don’t just manage our workforce—we actively help our people be their best selves. There’s no better time than now. Let’s get to work.
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