Building a future-ready talent pipeline with a skills-based approach

By Kevin Pennington, Robert Tate, Brandon Yerre; PwC US Principals, Consulting Solutions | Published: October 5, 2023 | Read time: 5 minutes

How to identify and close skill gaps, create a more agile workforce and prepare for the future of work.

In part one of this article series, you took the first steps in moving toward a skills-based talent strategy. You’ve asked the right questions and considered how the right technology can help. Now, it’s time to do the work of cultivating a culture that values skills over credentials alone. To do that, you should build a talent supply chain that often starts within that culture — by developing your own talent and cultivating the new skills you’ll likely need to meet increasingly complex technologies and business challenges.

Jobs of tomorrow demand a skills-based approach

More than half of CEOs believe labor and skills shortages will significantly impact profitability in their industry over the next 10 years. Digital literacy is perhaps the most in-demand skill given the proliferation of emerging technologies. Generative AI, machine learning, cybersecurity threats and devices connected through the Internet of Things (IoT) are creating demand for entirely new roles to build intelligent products and safeguard data. But despite this gold rush of technological advancements, thousands of digital and tech jobs may go unfilled. About 418,500 openings each year, on average, are projected to come from growth and replacement needs.

Technology isn't the only sector at risk from this shortage of training. Digital skills will likely play a critical role for operational workers including finance, HR, marketing and sales. And millions of skilled workers will also be needed to maintain progress within industries like supply chain and logistics, green energy, healthcare, elderly care and education.

Organizations may look to post-secondary education and technical training to help fill gaps but many workers globally are mismatched in their work based on pre-specified education requirements. In the global labor market of 687 million workers, only half are employed in roles that are well-matched to their formal education levels. And in the US, there can also be other obstacles to access, most particularly for women, latino/hispanic and black Americans entering computer science education programs and the tech sector at significantly lower rates than other groups.

A skills-based approach can help address these challenges by focusing on a person’s skills and abilities instead of educational background or previously held job titles. By tweaking your talent acquisition and upskilling approach through a skills-based lens, your organization can get the skills you need for a role while building a rich talent pipeline for the jobs of tomorrow.

Think skills-first when it comes to recruitment and retention

Organizations that use a skills-based approach could be broadcasting it as part of their recruitment strategy to draw in — and retain — life-long learners who are open to evolving roles and skills. But many companies may not recognize the skills their employees already have or what their future employees may need.

Over a third of employees say they have skills that aren’t apparent from their qualifications, job history or job titles; and 27% say that employers focus too much on job histories and not enough on skills. This can lead to missed opportunities in sourcing, promoting and upskilling the right candidates.

A skills-first mindset can help improve recruiting and retention by providing more opportunities for mobility and career advancement, as well as more consistency and reliability in job postings. Organizations can articulate skill needs in job descriptions by leveraging a skills dictionary, or skills taxonomy that serves as a glossary of hard and soft skills for your organization, and can set this strategy in motion.

For example, your existing recruiting template might include a minimum IT experience requirement for a software engineer but what if the role calls for a brand new coding language or emerging skill? The fast pace of technological advancements can make job descriptions feel vague. A skills dictionary can help recruiters and hiring managers understand the skills that prop up a role (e.g., machine learning, robotics, specific programming languages) as well as the soft skills (e.g., creativity, project management, communication) to funnel in more qualified candidates.

When you emphasize a skilled-based approach as part of your retention and engagement practice, you can foster a workforce that's ready to address emerging challenges and opportunities — and many will be. Fifty-three percent of employees say their job requires specialist training (up from 49% in 2022) and many of them want to upskill themselves and be part of an innovative organization. It’s one of the “non-negotiables” of workers in this new hybrid era of work.

A clear skills-map and terminology can help you make sure your upskilling provider has industry and function-relevant training that your employees need for the future of work. And in the process, you can begin to uncover commonalities between the skills needed across business functions, organically drawing connections that employees can use to map out their upskilling or reskilling journeys that can take them to the next level of their careers.

Bring together the full spectrum of HR data for a richer skills-based culture

Connecting your HR data with the right upskilling platform can automate and unlock insights that can lead to building a skills-based culture that drives performance and growth. Compared to those that haven't adopted a skills-first practice, organizations that have cultivated a skills-first culture are 63% more likely to achieve results across key workforce outcomes, including meeting or exceeding financial targets. And you can get even more ROI on upskilling dollars when employees can apply what they learned in ways that benefit both the functional area and the overall business.

Consider this scenario. After integrating its skills taxonomy into its human capital management (HCM) system, a financial services company can compare its finance professional’s, current skills to its goals for a future digital ecosystem that accelerates insights and analysis through automation.

The company can then prescribe digital upskilling credentials in skills like robotic process automation (RPA) and data wrangling, analysis and visualization. The finance professional learns how to consolidate and validate cash flow with RPA, data analytics, AI algorithms and cloud dashboards, providing immediate value now while staying ready for an evolving role.

The same method can be applied to a host of other roles and functions too — risk management, cybersecurity, supply chain, sales, procurement and more. When individuals find they can learn skills that directly apply to their function and desired career path — and those skills also align with the company’s goals — everyone can win.

Jump-start your skills-based talent pipeline with upskilling

When you know what skills your people have and what skills are needed to meet short- and long-term business goals, you can begin to train and hire to fill gaps before your organization reaches a critical point. But you should have a way to share data across your various HR systems to understand what skills you have and what you need to cultivate.

An end-to-end upskilling solution can be the answer. Meaning, instead of only delivering a learning and development program, you can integrate information from your company’s internal systems with external, industry-specific and market data to gather and analyze skills and jobs data to help produce targeted and responsive upskilling programs.

This data-driven approach can empower you to make strategic and operational decisions with confidence, and provide the ability to answer big questions:

What’s our current workforce profile?
Where are the biggest gaps in skills, and how do we measure up to our industry peers?
Are there trending and emerging skills we need to consider investing in?
How do we build and assign learning pathways that close our workforce skill gap?

Here’s how an organization could use an end-to-end upskilling solution to close skill gaps and build a more future-ready talent pipeline:

1. Build a workforce profile

A company uses the upskilling platform (with the identified skills taxonomy) to conduct a systematic, data-driven approach to understanding the organization's current workforce profile based on current company data.

2. Identify gaps

The company then runs a skills gap analysis from which the solution reads the linked labor data (e.g. roles, tenure, skills, etc.) from its labor workforce management software, external job market information and online professional network data. The company’s leadership team runs this information through various models and scenarios to compare current skills against industry and job market trends to help accurately pinpoint skill gaps.

3. Build learning pathways

Using this data, the company can develop thorough, forward-looking workforce plans while taking into account the needs of individuals, teams, functions and the enterprise. It receives help with this process through the solution’s AI-driven learning pathways and recommendations that provide personalization for function-based roles. Leadership teams can monitor progress and adapt plans as needed.

Once learning and development recommendations are in play, the company can launch its upskilling efforts with an infinite learner initiative, gather feedback on learning content using an employee listening platform and leverage industry benchmarking metrics to level-check efforts, investment and upskilling practices.

Building a culture that values skills helps solve business challenges

A skills-based approach helps drive skill development, retention and immediate applicability to enterprise-wide efficiency and growth. As more people acquire more skills — like RPA and data visualization — your organization can build a talent pipeline that produces high-impact work and citizen-led innovation, helping to keep your organization ready for the future of technology, business and work.

Leverage tech to build a future-ready talent pipeline

ProEdge Accelerate your employees’ learning and help drive scalable impact for your business with ProEdge — an intuitive, AI-powered learning platform that leverages hands-on experience and curated content to prepare your learners for real business challenges.

Listen Platform Set your skills-based approach on a course for success. Listen Platform is a survey and analytics product that helps you understand your employees’ opinions, attitudes and experiences. AI-driven analytics and business linkages, with configurable dashboards and reports, help you quickly uncover areas of opportunity.

Saratoga Inform your skills-based strategy using data amid a rapidly changing world of work. Saratoga is a benchmarking platform covering 40+ years of history and measurement from over 2,000 clients globally to help compare your organization to industry peers for deeper insights into your workforce.

Connect with the team to learn more: