Blog: Skills, like it or not

Why the time for skills-based transformation is now

Imagine this: your organization keeps missing out on top talent simply because you're screening for diplomas instead of capabilities. Or your employees disengage because they aren't given enough opportunities to develop new skills. This isn’t just a ‘what if’—it’s today’s reality. The good news? The solution is within reach: skills-based work.

Now is the time to gain buy-in for the shift to skills-based work

We’ve been hearing about the benefits of skills-based work for years. At the same time, implementation barriers and a lack of success stories held many organizations back. That hesitation was understandable. But those barriers? They’re gone.

New technology, especially AI, has solved the challenges around skills inventories, skills mapping, and maintaining up-to-date profiles. At Unleash Paris—the global HR tech conference—it became clear: all vendors are focusing on transforming HR towards skills-based, AI-supported processes. The long-awaited skills revolution is finally here. The pioneers have paved the way. Now it’s time for the rest to move from job-based to skills-based work.

Why now?

The labor market is facing an unprecedented challenge. As the economy recovers from recent shocks, organizations are dealing with talent shortages, rapidly evolving skill requirements, and increasing pressure on employee wellbeing and engagement. This dynamic forces HR teams to fundamentally rethink their processes. What worked in the past no longer guarantees future success. Leadership teams expect HR to improve performance. This is the moment to gain buy-in for the skills-based transition.

‘50% of job skills are expected to change by 2027.’

1. Higher quality of new hires

By focusing on capabilities rather than only experience, organizations can better predict how candidates will perform. The result: stronger matches between talent and role. Some studies show a 92.5% reduction in mis-hires in companies that adopt skills-based hiring.

2. A broader and more diverse talent pool

Focusing on skills opens up access to a wider talent pool. These candidates may not have the highest IQ scores, but they often bring critical skills. This approach recognizes that intelligence matters—but it’s not the only or best predictor of success.

3. Improved retention and longer tenure

According to BCG, candidates hired for their skills stay with a company on average 9% longer than those hired via traditional methods. Skills-based hiring leads to stronger alignment between people and roles, resulting in greater satisfaction and loyalty.

4. Increased agility and innovation

Skills-based teams, rather than fixed roles, make it easier to innovate and adapt quickly to change. This is vital in a world where 50% of job skills are expected to change by 2027.

5. More effective talent development

Skills-based HR makes it easier to invest in employee development with precision. It provides visibility into skill gaps and makes it possible to bridge them. This strengthens engagement and supports a culture of continuous learning—critical in a world where skills age rapidly.

6. Promoting internal mobility and talent sharing

A skills-based approach encourages employees to apply their skills across teams and projects. This not only increases organizational flexibility but also gives employees more opportunities to grow and take on new challenges.

7. Objective and more inclusive hiring processes

Skills-based hiring reduces unconscious bias by focusing on measurable abilities rather than subjective criteria. This leads to fairer, more inclusive processes—especially relevant now that 46% of job seekers use AI tools like ChatGPT to generate CVs and cover letters, undermining traditional methods.

‘Skills are the future of work’

Build a skills-based organisation

Skills-based work is not a trend; it's a necessary response to the future of work. The question is no longer whether to adopt a skills-based model, but when. Research institute TNO also emphasizes that the future labor market will revolve around skills—not degrees—placing skills development and matching at the center.

That’s why ImpactWork has developed a practical exploration workshop to help organizations navigate the skills transformation. You’ll gain insight into what this shift means for your organization and what it takes to move forward. The workshop is part of our 10-step method that guides companies in the transition to skills-based work.

Get ready for a future where people thrive, innovation leads, and every decision contributes to a better world of work. Take your first step today.

23 SEPT
Seminar: How to build a skills powered organisation

Location:

Social Impact Factory

Entree:

25 euro

Time:

19:30 - 22:00

go to the event

The four biggest HR challenges explained briefly.

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Of our profit is going to projects that support sustainable work causes. Example: Helping novices to find work.

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