Leading Companies Use Skills as the New Currency for Workforce Transformation

Rhea-AI Summary

Mercer has launched its Skills-Edge Suite, a comprehensive service aimed at facilitating the shift from traditional job-based to skills-based workforce management. The 2021 Mercer Global Talent Trends survey indicates that over half of organizations are focusing on upskilling and reskilling to enhance workforce transformation. Despite the growing focus on skill-based practices, many organizations still lack clarity on existing skill gaps within their teams. This strategic change is expected to improve talent mobility and agility in response to evolving business needs.

Positive

• Launch of Skills-Edge Suite enhances companies' ability to adopt skills-based workforce strategies.
• Over half of organizations are prioritizing upskilling and reskilling, indicating a market trend towards talent transformation.
• 44% of respondents in the survey have made it easier to loan or share talent internally.

Negative

• Two in five HR professionals do not know what skills exist in their organizations, indicating a lack of internal transparency.
• Organizations struggle to fully understand their skill gaps, which may hinder effective workforce planning.

Skills have become the new currency of workforce and talent strategies, as more than half of organizations that responded to the 2021 Mercer Global Talent Trends survey are targeting upskilling and reskilling of critical talent pools to drive workforce transformation.² In response, Mercer has launched its Skills-Edge Suite, an integrated service offering of consulting, technology and data that helps companies advance skills-based talent and pay practices.

For most organizations, from COVID-19 to technological advances, the nature of work has experienced seismic disruptions as we have become more interdependent, knowledge-focused, specialized and flexible about where, when and how we work. Traditionally, the base unit of managing a workforce has been a job. Job descriptions and titles have, until recently, defined how companies viewed work, how they set salaries, and how they made critical decisions around talent and workforce transformation. Today, the base unit of work has fundamentally evolved from jobs to skills.

“It became clear during the pandemic that skills fuel business transformation and organizational resilience. Companies that took inventory of their workforce or talent ecosystem have been able to find talent quickly, move talent to where it’s needed most, and make critical talent decisions to keep the business running during uncertain times. Mercer research shows that 14% of organizations that responded to Mercer’s 2021 Global Talent Trends survey have already embarked on skills-based talent practices such as skills-based pay,” said Kate Bravery, Global Advisory Insights and Solutions Leader at Mercer.

Mercer Skills-Edge Suite will help organizations adapt to the new shape of work through a skills-based workforce strategy. The offering helps to create skills frameworks and roadmaps to help companies transition from job-based practices to skills-based talent and pay practices.

A skills-based approach to workforce strategy assesses talent based on their holistic skill set (including adjacent skills across industries), rather than industry experience or qualifications. A well-designed skills-based workforce strategy will enable organizations to proactively identify future skills needs and develop an actionable plan to retain, build, buy and deploy talent, as needed.

According to Mercer’s 2021 Global Talent Trends survey, there has been an increase in talent practices that have enabled organizations to use their talent pool more flexibly. To better adapt to evolving business needs, 44% of survey respondents stated they have already made it easier to loan and/or share talent internally, with 26% to do so in the future.

The Global Talent Trends survey also revealed, however, that organizations are still struggling to understand the skill gaps in their current workforce. Two in five HR professionals responding to the survey admitted that they do not know what skills they have in their own organizations.³

“Transformation demands deconstructing jobs into tasks and skills, and updating talent models so that skills are the basis for defining work and compensation, deploying talent, managing careers and valuing employees. Companies that do this well will be better positioned to meet today’s business goals, remain agile in a changing world, and be more likely to retain and attract the best talent over time,” said Ravin Jesuthasan, Global Leader for Transformation Services, Mercer.

“By making skills the currency of work, organizations can connect talent to work in a more modern, agile way, and better meet the needs of the changing business landscape. Employers can focus on what skills they need — by either acquiring or developing them through workforce planning and supporting activities — and employees can focus on skill development and career alignment,” added Jesuthasan.

About Mercer Skills-Edge Suite

The Mercer Skills-Edge Suite creates skills frameworks and skills roadmaps to help companies to transition from job-based practices to skills-based talent and pay practices; and the support to operationalize and integrate companies’ skills philosophy into their HR systems through deployment and optimization services. Some of the { "@context": "https://schema.org", "@type": "FAQPage", "name": "Leading Companies Use Skills as the New Currency for Workforce Transformation FAQs", "mainEntity": [ { "@type": "Question", "name": "What is the Mercer Skills-Edge Suite?", "acceptedAnswer": { "@type": "Answer", "text": "The Mercer Skills-Edge Suite is a service that helps organizations transition from job-based to skills-based talent and pay practices." } }, { "@type": "Question", "name": "How does the Skills-Edge Suite impact workforce management?", "acceptedAnswer": { "@type": "Answer", "text": "It enables companies to assess talent holistically based on skills, promoting flexibility and improving talent deployment." } }, { "@type": "Question", "name": "What percentage of organizations are focusing on upskilling according to the 2021 Mercer Global Talent Trends survey?", "acceptedAnswer": { "@type": "Answer", "text": "Over 50% of organizations are targeting upskilling and reskilling critical talent pools." } }, { "@type": "Question", "name": "What challenges do organizations face regarding skill gaps?", "acceptedAnswer": { "@type": "Answer", "text": "Two in five HR professionals reported not knowing the skills present within their own organizations." } }, { "@type": "Question", "name": "How does the Skills-Edge Suite help with talent mobility?", "acceptedAnswer": { "@type": "Answer", "text": "It creates skills frameworks that allow for improved internal talent sharing and movement based on skill needs." } } ] }

FAQ

What is the Mercer Skills-Edge Suite?

The Mercer Skills-Edge Suite is a service that helps organizations transition from job-based to skills-based talent and pay practices.

How does the Skills-Edge Suite impact workforce management?

It enables companies to assess talent holistically based on skills, promoting flexibility and improving talent deployment.

What percentage of organizations are focusing on upskilling according to the 2021 Mercer Global Talent Trends survey?

Over 50% of organizations are targeting upskilling and reskilling critical talent pools.

What challenges do organizations face regarding skill gaps?

Two in five HR professionals reported not knowing the skills present within their own organizations.

How does the Skills-Edge Suite help with talent mobility?

It creates skills frameworks that allow for improved internal talent sharing and movement based on skill needs.