Analyst Perspectives

Organizations are constantly striving for agility and efficiency to stay competitive. From a human-capital standpoint, a logical way to achieve this is by moving away from a job title and education-based workforce and transitioning to one that is skills-based. This approach emphasizes the skills and capabilities of individuals rather than their prior job titles or education, enabling organizations to tap into a broader talent pool and adapt to changing business needs. However, creating a skills-based workforce requires overcoming challenges such as defining and measuring skills, changing workforce architecture and gaining the buy-in of human resources and business leaders to an entirely new way of viewing talent. Organizational structures today are largely built around functions with jobs that have titles and tasks to be completed. Individuals are evaluated for these jobs based on education, prior job titles and, sometimes, references, all used as a means of verifying that what is listed on a resume is true. In a skills-based workforce, the value of a resume is voided, as prior job titles and degrees would no longer be the pillars of measurement for a candidate’s qualifications, which I have previously addressed in this analysis as well as offering guidance in this publication on five strategies that should be embraced. Skills, though, cannot be verified by phoning a university or verifying employment tenure and titles.

Blockchain, a decentralized and distributed digital ledger, can be used to create a mobile, verifiable skills passport for workers. A skills passport would serve as a digital record of an individual's skills, certifications and achievements that can be securely stored and shared on the blockchain. This would enable workers to have ownership and control over their skills data and provide employers with a transparent and immutable way to verify the skills of potential candidates. Blockchain's features of transparency, security and decentralization make it ideal for creating a trusted and interoperable skills passport that can be used across different organizations, industries and countries.

However, a significant challenge in creating a skills passport is the lack of global standard definitions of, or measurements for, most skills. To overcome this, an official governing board, like state medical boards that establish and maintain standards for practicing medicine, would be required. This board would need to develop a globally accepted skills taxonomy that encompasses various industries and occupations, comprised of experts from different fields, including industry representatives, educators, policymakers and other relevant stakeholders, to ensure a holistic and inclusive approach to defining and measuring skills. While the World Economic Forum has proposed a framework for such a taxonomy, its creation and application would necessitate extensive collaboration, research and ongoing updates to keep up with the dynamic nature of skills in the rapidly evolving job market.

Even with a globally accepted skills taxonomy in place, organizations would need to be willing to change their workforce architecture from function- and job-based to one that is skills-based. This requires a shift in mindset and organizational culture, as well as significant change in management efforts. Organizations would need to invest in upskilling and reskilling programs to ensure that their workforce has the required skills to meet changing business needs and opportunity marketplaces to embrace their existing talent. Managers and leaders would need to learn how to assess and leverage skills effectively, rather than relying solely on job titles and past experiences. This transformation may be challenging, but it is essential to unlock the full potential of a skills-based workforce, and I assert that by 2028, demonstrable, transferrable skills will overtake prior job titles and education as leading qualifiers in the hiring and promotion processes for one-half of organizations. A standardized skills taxonomy would accelerate that shift.

Despite the obstacles, the move toward a skills-based workforce is inevitable, as working populations decline and advances in technology accelerate automation and redefine the nature of work. The adoption of skills evaluation as the primary indicator of potential success in a role would allow organizations to create more democratized, diverse and agile workplaces, allowing employers to quickly match skills with evolving business needs and workers the opportunity to showcase their skills and capabilities in a variety of roles, projects and functions, resulting in improved engagement and retention. Those that pioneer this shift have the potential to gain significant competitive advantage over those that take a more conservative approach, and I recommend that organizations that have not already done so begin the journey to a skills-first workforce immediately.

Regards,

Quincy Valencia