The Best of Skills Day 2024

In This Article

The Foundations of Skills

Understanding and managing skills has become more critical than ever. The search for effective skills strategies is no longer just a human resources exercise, but a fundamental business imperative that touches every aspect of organizational success. Let’s dive into the intricate world of skills management, with insights from industry leaders who are pioneering innovative approaches to talent development, workforce planning, and organizational transformation.

The new skills for productivity

The landscape of work is evolving at an unprecedented pace, reshaping how we engage with products and redefining the way we design work and manage talent. Every 25 years, technological transitions fundamentally alter our interaction with the world around us, and we're currently in the midst of such a transformation.

Consider the automotive industry as a prime example. The progression from traditional vehicles to Tesla's 70% autonomous driving capabilities, and now to Waymo's fully autonomous Jaguar models, illustrates the rapid advancement of technology. And tech is reshaping work across sectors like agriculture and logistics, where drones are revolutionizing operations. These changes are altering the very nature of jobs and the skills required to perform them.

And as the workforce gap widens due to an aging population and declining birth rates, technology must bridge this divide. This shift is dictating the types of jobs, skills, and work that organizations need to prioritize. All people must perform analytical tasks, desirable tasks, and process tasks as part of their day to day, but by leveraging automation and intelligence for analytical and process tasks, we can allow people to spend more time on desirable tasks.

In this new paradigm, talent agility is paramount. A human-first experience, amplified by AI and automation, is becoming the norm. Soft skills are increasingly critical as the nature of work continues to evolve, and soft skills are becoming more and more necessary for every department and industry.

By embracing these changes and focusing on developing the right skills, businesses can stay ahead. As Mahe Bayireddi, our CEO and co-founder, stated, “Productivity is where profitability comes into the picture.” Phenom is developing products to address this new reality, helping organizations identify the skills needed in this rapidly changing environment. “We’re going to redefine the way we design work and manage talent from now on.”

From skills conversation to translation

The dialogue surrounding skills has become increasingly prevalent, yet its impact may be diminishing due to overuse. As Cliff Jurkiewicz, VP of Global Strategy at Phenom pointed out, "We're becoming desensitized to the phrase – that's because change can be daunting. Having the conversation around skills is very real. It takes thought leadership and commitment, and most companies don't know where to start."

What we need is translation. In this context, translation can be understood as the actualization of innovation. Innovation remains merely an idea without the crucial step of translation – putting thoughts into action. The same principle applies to skills development within organizations. While many discuss skills, few are actively implementing changes in their organizations.

Jurkiewicz emphasized the importance of skills translation, not just for talent management but equally for talent acquisition. He outlined four key areas where skills can transform an organization:

• Identifying organizational strengths

• Recognizing ongoing learning within the organization

• Understanding the organization's needs based on current work

• Anticipating market trends

Jurkiewicz added that with skills, "You can predict not only where you're going to go, but the people you'll need to hire and retain to take you there."

Related reading: The Strategic Guide to Skills-Based Hiring for a Competitive Edge

Deloitte discusses skills in the market and at home

Frances Symes, Senior Manager of Workforce Transformation at Deloitte Consulting LLP, shed light on the importance of becoming a skills-based organization and the driving forces behind this shift. According to Symes, there are three main factors propelling organizations toward a skills-based approach:

1. Massive change in work due to technological advancements, including the rise of GenAI

2. Economic uncertainty, forcing organizations to look inward for talent

3. Evolving workforce preferences, particularly among younger generations seeking rapid growth and opportunities

What are the potential risks of not adopting a skills-based approach?

• Skills gaps prevent organizations from executing on strategies

• Organizations face inefficiency and lack of productivity without skills data

• Companies may lose their best talent if they fail to adapt

To become a skills-based organization, you should understand both the skills supply (what skills your workforce has) and skills demand (what skills you need for success). Symes noted, "This informs a host of talent strategies" and highlights "the desire to create more connectivity across the talent lifecycle in order to better use this data and make holistic decisions around talent."

But this extends beyond technical skills. A recent Deloitte survey of 1000 HR professionals highlighted the importance of human skills:

• 87% believe adaptability, leadership, and communication skills are critical

• 52% think their organization values human skills

• 94% are concerned that future generations will enter the workforce without human skills

• The top three skills workers want their employers to prioritize are teamwork and collaboration, communication, and leadership

These findings show us that you can’t “leave out human skills as part of your strategy. Human skills are as critical as technical skills to drive value from GenAI investments."

Deloitte practices what they preach, and their own skills journey emphasizes modernizing the tech infrastructure, capitalizing on skills intelligence, and shifting to skills-based strategies. By expanding skills use across the talent lifecycle, they’re better positioned to achieve business outcomes and fulfill employee aspirations.

Related reading: Moving into the Fast Lane: Becoming an AI-fueled, Skills-based Organization

How to unify your skills data

In today's talent landscape, organizations often struggle with fragmented skills data spread across various systems, making it difficult to create a single source of truth for workforce capabilities and needs. The challenge is further complicated by rapidly evolving skill requirements and inconsistent terminology across different departments and regions.

Our approach to unifying skills data is comprehensive and dynamic, leveraging over 12 years of data across multiple industries and focusing on creating interconnected networks rather than isolated data points. Sunny Yang-Hicks, Senior Director of Product Management at Phenom, explained, "We see data not as separate pieces but as a network of connected entities across talent acquisition and management."

Our skills ontology is designed to be adaptive, continuously learning to stay relevant and fresh. "Global and enterprise-level ontologies are designed to be flexible and allow customers to lay their own ontology on top of Phenom's. This can support the diverse needs of our customers,” shared Yang-Hicks. This ultimately enables Phenom to deliver value through various HR applications like workforce planning and career pathing.

Building and maintaining the skills ontology involves several key steps:

• Standardization and normalization of skills data

• Metadata enrichment of all skills

• Mapping skills to roles and industries

• Enhancing current skills with market data

Yang-Hicks also highlighted the importance of keeping the ontology current: "Because skills data is constantly evolving, we enhance our skills data with market data and human-in-the-loop feedback to ensure our ontology stays up to date." This commitment to ongoing refinement ensures our skills ontology remains a powerful tool for organizations seeking to unify and leverage their skills data effectively.

The impact of unified skills data for talent management

Skills are the foundation of workforce planning and employee growth, enabling the agility and adaptability needed to navigate today’s rapidly evolving workplace. As Lindsay Mareau explains, “Skills are fundamental for talent agility.” They are transferable across roles, offering the flexibility organizations need to respond to changing demands while empowering employees to grow and thrive. Developing a fluid and dynamic skills strategy has become more important than ever, ensuring businesses remain competitive and employees feel supported.

A skills ontology offers a powerful framework for connecting skills to roles and understanding organizational needs. It uses market data to identify emerging and declining roles, helping companies build effective talent models with minimal effort. While implementing this approach can be challenging, Mareau highlights that “unifying talent data creates a common language of understanding to hire efficiently and facilitate growth.” This alignment allows organizations to transition seamlessly from insights to impactful action.

What to do with your skills data

We’ve talked about all the data that you need. But what do you do with it?

In the product demo below, John Deal, Senior Director of Product Marketing at Phenom, shows how our ontologies and AI connects skills across candidates, recruiters, managers, HRIT, and employees in order to really make use of your skills data.

Remember: Skills don’t stop when you’re hired. Deal reminds us that “The skills come with you! This is what unified data does for you. It makes you powerful when you engage on both the talent acquisition and management sides.”

Related resource: Merck KGaA Germany's Best Practices for Successful Workforce Planning and Skills Management

Skills for Hiring & Productivity

A transition from traditional hiring methods to skills-forward approaches can make a lasting impact on the way your teams hire and retain top talent. With skills at the core of both hiring and productivity strategies, the possibilities are endless. But where do you start? By aligning the right talent with the right skills, organizations can not only streamline their hiring processes but also boost employee performance and drive business success.

Understanding the power of skills data for hiring

John Harrington, Senior Director of Product Marketing at Phenom, discussed the limitations of traditional hiring practices, which often rely on subjective evaluations and fail to capture the full potential of candidates. "At no point in the traditional process is there a deliberate, systematic effort to extract and leverage skills data," Harrington explained. This oversight frequently leads to misaligned talent and business needs, leaving hiring teams without the tools to make impactful, long-term decisions.

A skills-forward approach transforms this process by using AI-powered tools to extract and apply skills data systematically. This ensures hiring teams can create comprehensive job profiles, offering a holistic view of candidates and enabling faster, smarter, and more precise decisions. "Skills data allows AI to automatically evaluate resumes and match profiles against pre-defined role requirements," Harrington noted. This goes beyond basic keyword matching, incorporating context, experience, and inferred potential.

Beyond hiring, skills data enhances onboarding and development. Rich insights ensure managers aren’t starting from scratch, enabling the creation of personalized development paths that align with individual strengths and aspirations. This data-driven approach improves internal mobility and upskilling opportunities, empowering organizations to build stronger, more agile teams that align with their long-term goals.

Now, let’s take a look at AI-driven technology in action to see exactly how it supports and improves talent acquisition and talent management processes.

The impact of intelligence on talent acquisition

While organizations may be grappling with how to effectively implement AI in their recruitment processes, some have already made strides in seamlessly integrating this technology into everyday hiring workflows.

Within the Phenom platform, AI is operating at all times behind the scenes. Although this isn’t a flashy process, it allows AI co-pilots to handle more complicated processes for recruiters and managers. Phenom X+ — the intelligence behind each AI co-pilot — streamlines the entire process for recruiters, from the intake meeting through to the final round of interviews, while leveraging skills to identify best-fit candidates faster.

For every open role, the system creates a checklist for you to complete, starting with the intake meeting with a hiring manager and continuing through the rest of the process. For the intake meeting, AI co-pilots also generate a guide to help ensure that the call is efficient, effective, and full of critical information needed to create a comprehensive and accurate job description.

AI co-pilots pull in current and past employee responsibilities, marketing information, and more to inform specific questions aimed at building a skills profile for this job.

Throughout the talent acquisition lifecycle, AI co-pilots support your teams at every step while:

• Providing them with an always-on assistant

• Summarizing interviews and intake meetings so no details are missed

• Suggesting personalized messages for candidate outreach

• Surfacing best-fit candidates through Fit Score

• Assessing and matching skills with role requirements

AI-driven tools within a holistic talent platform enhance hiring from start to finish. For teams looking to improve hiring even further, keep reading to see how skills and AI power impactful automation.

How automation elevates knowledge & frontline hiring

AI agents and automation are transforming hiring processes for both knowledge and frontline workers, significantly reducing time-to-hire and simplifying recruiter workflows. By leveraging automation, recruiters can flag candidates who meet critical skill requirements and set up notifications for hiring managers immediately upon candidate entry.

Key benefits of automating hiring tasks and processes include:

• Skills-based screening: Automating screening questions and assessments to evaluate must-have skills and proficiency levels.

• Efficient evaluations: Automatically routing candidate responses to recruiters for quicker evaluation.

• Streamlined interview prep: Building automated workflows for assessments and interview processes to ensure the right candidates are prioritized.

These capabilities reduce manual tasks and allow recruiters to focus on engaging top candidates. For frontline roles, where hiring speed and efficiency are critical, these tools can be game-changing, helping organizations fill roles faster and with greater confidence.

Maximizing the value of skills with AI

Alex Pahl, Global Head of SAP HCM and SAP HR Cloud Solutions at PwC, emphasized that aligning AI implementation with overarching company strategies is essential for success. “You need to transform your company and your people to the strategy,” Pahl stated, highlighting the importance of mapping global goals like innovation, internationalization, and cost reduction to HR and IT strategies.

PwC’s journey illustrates this principle: by shifting from a localized approach to a European-wide strategy, they optimized recruitment and sourcing operations. Centralizing their data pool enabled PwC to hire based on skills aligned with their organizational setup, reducing costs and enhancing efficiencies.

Pahl also underscored the importance of integrating AI with legal and compliance considerations early in the process. “After nine months of using AI machine learning, we’re able to reduce our sourcing nearly to zero because AI pumps all the data in a lake of information into a detailed list of skills that we need to support our global strategy,” Pahl explained.

This approach not only streamlined hiring but also drove cost and time savings, demonstrating that AI must be mapped to strategy, change management, legal, and technology requirements to achieve measurable results.

Skills for Employee Growth and Workforce Planning

Personalization is a critical component of a successful skills strategy. Mareau stresses the importance of this step, saying, “Action needs to be understood by employees so they get the benefits of upskilling opportunities.” Organizations can help employees enrich their profiles and share aspirations by offering tailored experiences such as:

• Mentorships

• Career paths

• Gig projects

This personalized approach fosters stronger engagement, enables managers to have more meaningful performance conversations, and prepares employees for future opportunities.

Scaling skills strategies requires leveraging technology to ensure accessibility and support. Lindsay underscores the role of technology, stating, “HR needs to help the workforce tackle these changes by making the strategy effective and the investment worthwhile.” AI agents, automation, and “always-on” resources, such as career coaches, provide consistent communication and deliver timely opportunities.

By embedding these tools into daily workflows, organizations create a human-centered, future-ready workforce that thrives on adaptability and continuous growth. Let’s dive into how the right tools help integrate skills into the daily life of an employee.

AI-powered skills management transforms HR operations

Mark Feneis, Senior Director & Manager of Solutions Consulting at Phenom, demonstrated how AI and automation are revolutionizing the way organizations manage and develop talent. At the core of this transformation is a robust industry-centric ontology that standardizes skills data across the organization, enhanced with company-specific context for deeper understanding of skill deployment.

"Skills are the fuel that power AI agents to help develop your team," Feneis explained, showcasing how HR leaders can get unprecedented visibility into their organization's skills landscape.

AI agents serve as powerful allies in this ecosystem, performing a range of crucial functions:

• Creating personalized learning plans with actionable steps for employee development

• Supporting strategic workforce planning initiatives, from growth strategies to risk mitigation

• Developing specific goals and KPIs, complete with execution recommendations

• Identifying internal candidates for upskilling opportunities or surfacing relevant external talent in the CRM

The platform streamlines workflow management by consolidating essential tasks and activities into an intuitive interface. Through automated meeting scheduling and team growth guidance, leaders can reclaim valuable time as key insights and potential risks are automatically summarized for quick review.

Feneis also emphasized that these sophisticated capabilities don't require extensive manual data entry. AI agents can generate tailored growth plans that address each employee's unique needs, creating personalized strategies that drive engagement and career development.

This automation-first approach ensures that organizations can maximize the value of their skills data while minimizing the administrative burden on HR teams and managers.

Embracing intelligence for employees

With clear benefits to HR leaders and hiring teams, you might be wondering how skills data benefits your most valuable resource: your employees.

AI-powered agents can work alongside employees in your organization, acting as personalized career coaches to offer tailored recommendations and connect HR, people managers, and leadership to employees’ daily tasks.

Watch the video below to see how upskilling your workforce can help meet both today’s and tomorrow’s business needs.

Skills Governance: From Theory to Practice

As organizations grapple with the complexities of a rapidly evolving workforce, skills governance has emerged as a critical focus area. By exploring real-world applications and technological solutions, we can demystify skills governance and provide actionable strategies for organizations seeking to build a strong skills foundation.

How a skills-based organization has done it over 30 years

EPAM Systems, a global digital engineering company, stands out as one of the world's most mature skills-based organizations, with a journey that began 30 years ago. Sandra Loughlin, PhD, Chief Learning Scientist at EPAM Systems, shared that EPAM's skills-based approach originated from a fundamental business need: matching people to work as a professional services company. Loughlin explained, "Today we use skills across the entire talent lifecycle to hire, for learning, for workforce management, for performance management and rewards, and we use it to do workforce planning."

EPAM's governance model revolves around the concept of a skills ratio: Skills the business needs vs. skills the business has, with the delta between these representing the skills gap.

This ratio is dynamic, necessitating a robust governance process, which is “the process of finding your ratio and creating a static snapshot to govern your practices," she explains.

4 tenets of EPAM's skills governance include:

• Business Ownership: Skills governance should be owned by the business. "We believe that the people who understand what skills are required for any role are the ones who are closest to that role."

• People Analytics: This is critical to keep data flowing for decision making. "The importance of people analytics cannot be overstated."

• Velocity of Change: Regular reassessment of skills relevance that changes often. This is where teams come together to look at the skills that were important and decide if they still are, if more are needed, or if any should be disregarded.

• People Organization: Aligning HR processes, systems, and tools with the evolving skills taxonomy. They ask: What are the new skills we need people to learn so that we can curate the right learning content?

Loughlin also addressed FAQs about implementing skills governance, highlighting why it’s so important:

1. How many skills should an organization have? "EPAM has around 130 skills on average for each role." However, she advises starting small: "Not that many at first. You want to have enough that you can collect good data and use that information to make business decisions."

2. How often should we update skills? The short answer: At least annually, but as often as needed.

3. Who should in involved in governance? The business, people analytics, and HR.

4. How should we handle changes to our skills? Continuous monitoring through the people analytics team.

Loughlin encourages organizations to start building their skills foundation now, using data to understand and prioritize critical skills for success.

Simplifying skills governance with the right tech

Jesus Latorre-Socas, Director of Product Management at Phenom, emphasized the importance of governance in skills management and how technology can simplify this often-dreaded process. "It's not just here to help make you more productive, it's here to help you simplify processes and govern your skills.”

Making governance a habit is the best way to ensure organizations stay up to speed with their skills landscape. Technology, particularly AI, can assist in several key areas:

• Explanation: AI helps identify the sources of skills across jobs, employees, and other data points, making the process more transparent and understandable.

• Contextualization: AI brings together various data points, including engagements and behaviors, to provide meaningful context to skills ontologies.

• Automation: This enables organizations to stay relevant in the market by coordinating skills at scale.

• Nudging: AI facilitates the validation process by providing necessary information upfront and nudging relevant team members to validate skills.

"Tech is here to help you and expedite your organization into that ‘skills nirvana.’ It helps tie skills to business objectives, outcomes, and learning opportunities," Latorre-Socas said, underscoring the transformative potential of technology in simplifying skills governance.

Related resource: State of Skills: 2024 Market Data Report

Understanding and managing skills within an organization is essential for fostering productivity, facilitating employee growth, and ensuring effective workforce planning. By exploring the foundations of skills, their role in hiring and productivity, and the practicalities of skills governance, organizations can create a robust framework that aligns talent with business objectives. This not only enhances operational efficiency but enables organizations to adapt and succeed in an ever-evolving landscape.

To continue your own skills journey, request a complimentary skills snapshot here. Our team of experts will analyze and explore the roles, skills, and progressions currently at your organization, and what you can do with them to move from data to action.