Elevating Organisational Strategy from Jobs to Skills

Elevating Organisational Strategy from Jobs to Skills

Do jobs really define what we do? Increasingly, as work evolves to be more about nimbly responding to rapid changes in our environment than about standardised work designed for scalable efficiency, the answer is no.

Ever since Adam Smith wrote about the division of labour over a century ago, jobs have been the dominating structure for organising work and making decisions about the workforce. Managers give feedback, hire, promote, and organise their teams around people in “jobs.”

Workers think of work as their “job.” And the entire human-resource function has been built on the concept of the functional job with a fixed set of responsibilities, with HR writing job descriptions, setting compensation levels, creating organisational charts, assigning training, and giving performance reviews all for predefined jobs. The structure is so very systemic, that people rarely stop to question it at all.

Confining work to standardised tasks done in a functional job, and then making all decisions about workers based on their job in the organisational hierarchy, hinders some of today’s most critical organisational objectives: organisational agility, growth, and innovation; diversity, inclusion, and equity; and the ability to offer a positive workforce experience for people. In response, organisations are moving toward a whole new operating model for work and the workforce that places skills, more than jobs, at the centre.

The skill-based operating model

If jobs are no longer the fundamental building block that guides us in making decisions about work and the workforce to execute our organisational strategy, then what is?

The answer could be skills—broadly defined as hard skills (such as coding, data analysis, and accounting), human capabilities (such as critical thinking and emotional intelligence), and potential (including latent qualities, abilities, or adjacent skills that may be developed and lead to future success).

The skills-based organisation is a new operating model for work and the workforce that turns talent management on its head, redefining and reimagining every talent practice to be based more on skills than on jobs, and redefining how work is organised so that skills can be fluidly developed to keep pace with work as it evolves―all in a state of perpetual reinvention.

Organisations still value degrees over skills

To gauge the transformational journey toward skills-based organisations, Deloitte asked executives in 10 countries what types of skills-based practices they are adopting, and to what extent. It found that although organisations are still largely valuing degrees and job experience over demonstrated skills and potential in making decisions about work and the workforce (with only 17% of HR and business executives saying their organisation values demonstrated skills and potential over degrees and job experience), more organisations than expected are using skill-based practices now. And there’s significant interest from HR and business executives across the globe in continuing the trend.

89% say skills are becoming more important

Nearly nine in 10 executives (89%) say skills are becoming more important for the way organisations are defining work, deploying talent, managing careers, and valuing employees.

Nearly the same number (about 90%) are using skills-based practices at least to some extent, often experimenting with using skills to make decisions about work and the workforce, or employing them for only some workforces or segments of the business. But only a few—somewhere between 15 and 30%, depending on the practice—are truly adopting skills- based approaches to a significant extent: across the organisation, and in a clear and repeatable way that truly values skills over jobs.

Not an easy journey

Transforming into a skills-based organisation is a fundamental shift from work as we know it—a continuing journey that redefines the very core of what we consider work to be—requiring significant and often difficult changes to how we lead, manage, or contribute to work, and how HR supports the workforce across practices.

Although it certainly is not an easy journey, those that embark on it can be rewarded with greater agility, greater realisation of every worker’s true potential, and the confidence that the organisation has the right talent to meet ever-evolving business needs and outperform the competition.

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