Skills-based organization.



  • Hard/technical
  • Soft/human
  • Potential

Internal talent marketplace

  • Match (people's) skills to projects.
  • Work divided into projects, tasks and deliverables.
  • People can apply to these.

Organizations are moving toward a new approach

Graphs that present the move towards skills-based organizations and successes in organizations that already made the swich (partly).

The case for change continues to develop

  • Organizations’ growing sense of responsibility for their workers’ welfare
  • Workers’ demand for more autonomy
  • Talent shortages
  • The need for agility
  • Digital transformation
    Automation is pushing organizations to “unfreeze” their jobs, disaggregate them into their component tasks and subtasks, and then hive off those that can be automated and reassemble the remaining tasks into a newly formed “refrozen” job. But with newer technologies continuously reshaping jobs, many are looking for new structures of organizing work that enable people to continually flex as needed, instead of unfreezing and freezing jobs over and over again.
  • Decreasing relevance of jobs
    A full 71% of workers already perform some work outside of the scope of their job descriptions, and only 24% report they do the same work as others in their organization with the same exact job title and level. Meanwhile, 81% of business executives say work is increasingly performed across functional boundaries.

The skills-based organization in practice

The four principals or skills-based organizations:

  1. Liberating work from the confines of the job by reorganizing work as a portfolio of fluid structures, including and beyond the job.

From: Work organized by jobs in a functional hierarchy
To: A portfolio of ways to organize work, enabling greater agility and more fluid, meaningful packages of work including and beyond the job

  1. Reconceiving workers from being employees in jobs to being a “workforce of one”—individuals who work on- or off-balance-sheet, each with a unique ability to make contributions and a portfolio of skills and capabilities that match the work.

From: A one-to-one relationship between employees and jobs
To: A many-to-many relationship between work and skills, with workers seen as unique individuals with a portfolio of skills who may be on- or off-balance-sheet

"In the past, only select “high potentials” were given the opportunity to tackle business-critical challenges or move around to different projects, giving them the development needed to rise. But a skills-based organization gives everyone the ability to access the types of experiences that previously were reserved only for those with perceived high potential, now democratizing opportunity for all."

  1. Using skills, rather than jobs, to make decisions about work and the workforce —from who performs what work, to performance management to rewards to hiring.

From: Decisions about how to organize work and make decisions about workers based on the job
To: Decisions about how to organize work based on skills, and eventually, on other unique attributes of workers as well

"In an ever-evolving world of work in which the half-life of hard skills is shorter than ever, increasingly more important will be hiring based on adjacent skills, or foundational human capabilities such as learnability. Workers then have the ability to build on the foundation of other capabilities to continually develop the hard skills they need."

"For many organizations that retain the job, employees may have both a base salary based on their job, and a “skills” salary based on the market value of and organizational need for their skills. This would enable people to still be rewarded in line with market demand for their skills, but jobs could still be far more broadly defined, thereby unleashing greater mobility for those skills to be deployed across a variety of types of work."

  1. Building a “skills hub,” an engine of skills data, technology, governance, and more, to power these decisions.
    A skills hub could serve multiple purposes:
    • List skills that are needed within a project.
    • Learning paths that lead to acquiring those skills. The skills hub then evolves into a learning hub, an internal (talent) marketplace of learning and development.

"Traditional work" can still exist. A skills hub could be used for a fraction of an employees time, say one day per week (or 20% of the employees contact):
"Many organizations are experimenting with partial fractionalization in the form of internal talent marketplaces: letting workers carve out a portion of their time from their traditional job to take on projects and tasks anywhere in the organization based on their skills and interests, with opportunities suggested to them through AI-powered matching technology."
"Although there will always be a place for the traditional job, organizations are increasingly looking to create a portfolio of different ways to organize work, using different options for different workforces or businesses."

Taking the first steps toward the skills-based organization

Take one of three difference approaches:

  1. Start with a particular talent practice and transform it to be based more on skills and less on jobs.
    "For example, Cargill started by transforming learning and development to be based more on skills, and less on suggesting learning and development opportunities based on people’s jobs. As it proceeded to also adopt skills-based hiring and a skills-based talent marketplace, it realized it had core skills hub work to do to realize the vision; so it embarked on an initiative to develop an enterprisewide skills framework, using skills as a unit of measurement to better acquire, manage, and develop its people going forward."
  2. Create a centralized “skills hub”
  3. Start with the work, either with an internal talent marketplace that lets some work live as projects and tasks outside of the job, or as broadened jobs.

"Always lead with the why. Explains Cargill’s Julie Dervin, “Start by defining the why, which is your value proposition and your business case to support this multiyear journey. It involves a lot of change at a very systemic level in people processes and the way things are done.”"

For most organizations, the notion of the job won’t go away entirely. Instead of being the only way to organize work and make decisions about workers, it will become just one of many ways, giving leaders the option to use a variety of approaches. By moving to a skills-based approach, leading organizations can pivot from a traditional model aimed at scalable efficiency that grew out of our industrial past to one that is far more suited to a world in which speed, agility, and innovation rule the day, and in which people expect more meaning, choice, growth, and autonomy at work.