In many countries, labour shortage still looms large and talent is the new trading currency. Chief executive officers (CEOs) and chief human resources officers (CHROs) are grasping with the complexities of a new and tight job market, one where the demand for certain skills fluctuates and workforce resilience and agility is indispensable for business viability. As employers wrestle with finding candidates with the right skills for critical positions at the right price point, they are challenged with developing a sustainable strategy to move forward.
This shift is also raising concerns among economists, and the World Economic Forum (WEF) recently launched the report Putting Skills First: Opportunities for Building Efficient and Equitable Labour Markets. The report, which was published in collaboration with PwC, highlights the benefits of pivoting to a “skills-first” approach. By this approach, employers focus on whether someone has the right skills and competencies for a role, rather than how the skills have been acquired (i.e. candidate’s educational background, job title or previous job experience). As the WEF indicates, a skills-based strategy helps businesses stay responsive to emerging needs and, by widening access to opportunities, it also becomes a powerful instrument to equip workers with skills for the jobs of tomorrow.
Skills at the heart of the paradigm shift
Employees value the opportunity to develop skills on the job. According to PwC’s Global Workforce Hopes and Fears Survey 2024 with more than 56,000 workers in 50 countries, almost half of employees say having opportunities to learn new skills is a key consideration when it comes to their decision to stay with their employer. Workers who say they are likely to switch employers in the next 12 months are nearly twice as likely to strongly consider opportunities to learn new skills in such decisions.
These stats show that now more than ever, leaders must advocate for the importance of continuous learning, encouraging curiosity amongst their teams. This also means having very different conversations with employees – transparent and focused on what is best for the total enterprise, not a silo focused alignment to their specific business unit, instead strategising on what skills employees need to build, matching up employee, potential and needs aligned to wider business strategic priorities.
In response to this new normal, many leading organisations are shifting to what has become known as skills-based organization (SBO). In SBOs, the entire enterprise, led by the C-suite, adopts a skills-first mindset across the talent journey, from hiring and promoting to upskilling and reskilling. Among many benefits, SBOs typically foster career growth, equity and business agility.
The change, however, is deeper than it may seem. It requires adopting a new way of perceiving the workforce, which includes replacing org charts – which rank employees by job titles and performance ratings/potential – with a dynamic skills-based matrix; matching skills to work and career opportunities – as opposed to titles and education levels; organising work around skills and tasks – rather than hierarchy and previous experience; identifying internal and external skills data to inform workforce planning and skills benchmarking; managing skill badges and credentials; and more.
Three steps to making better talent decisions and bringing a skills-first approach to life
Take inventory of your workforce skills. A skills taxonomy helps HR teams gain comprehensive insight into the skills and competencies of the workforce and can serve as the foundation for talent intelligence and career marketplaces. That’s why a growing number of companies are investing in tech-powered talent data engines. According to PwC research, 84% of CHROs are investing in modern workforce architectures to help them take stock of skills and integrate this data into the existing job architecture.
Integrate talent data into your workforce architecture. One technology company that is committed to helping organizations bridge this gap is Oracle. At CloudWorld 2024, Oracle launched an open skills infrastructure within Oracle Dynamic Skills that empowers HR leaders to curate and manage their skills-based strategy and improve talent decision-making. Oracle Dynamic Skills is part of Oracle Fusion Cloud Human Capital Management (HCM), and the new open skills architecture uses sophisticated AI capabilities to collect and report data from Oracle HCM and third-party applications to uncover critical workforce insights and help organizations extract more value from their Oracle HCM investment for their workforce. The increased flexibility of this platform offers CHROs the ability to start the journey towards a skills-based-organization wherever they are, with whatever ecosystem of existing technology. This is a differentiator in the market as not all enterprises are at the same starting point on their journey.
Prepare for the Change. Technology can accelerate the changes required to navigate today’s labour market, but managing these challenges requires a balance of system and data integration, innovation and culture change. To succeed in this significant organisational shift, organisations must not under estimate the change management effort involved to change behaviours, ways of working and fundamental thinking of talent with skills as the new currency of talent. This change touches everyone: across c-suite, people leaders, the HR function and employees.
Accelerate your skills-first journey leveraging Oracle Fusion
We at PwC meet daily with CHROs and CEOs who are seeking tech-powered solutions that not only help address immediate needs but also lay the groundwork for sustained adaptability to future threats to workforce resilience. In this context, Oracle is uniquely positioned to help them because it offers a flexible platform that spans various business areas - including Oracle Financials, Oracle Human Capital Management (HCM), Supply Chain Planning (SCM), and Customer Experience - now so closely linked to skills data. This enables Finance and HR teams to work in tandem to plan, budget and execute on enterprise goals based on a woven fabric of data points, specifically skills.
The partnership on skills between Oracle and PwC can help you leverage the most of your Oracle platform, delivering against a skills-based-organisation strategy fit for purpose with an optimal change approach to drive new ways of working, behaviours to deliver value from day one.
Moreover, PwC closely collaborates with Oracle’s HCM Development team to strategize on approaches to meet industry requirements. We collaborate to maximise the use of the Oracle platform to help create client-specific, scalable solutions. This collaborative relationship allows our clients to take advantage of the latest capabilities within the Oracle platform and prioritize their innovation agenda in line with Oracle’s roadmap.
PwC's team helps organisations worldwide reimagine their talent management strategy leveraging Oracle solutions and PwC industry-specific accelerators. Let us help you unlock the value of cloud technology and AI to gain the insights you need to build a stronger, resilient workforce. Get in touch and learn more about the PwC and Oracle Alliance.
Authors
Contact us
Get in touch and learn more about our services and solutions.
Accelerate transformation with AI
Learn how you can unleash AI with PwC and Oracle.
