Earlier this year, the U.S. Office of Personnel Management announced a shift to skills-based hiring for Information Technology Management positions. This classification of roles represents IT workers in every federal agency—nearly 100,000 employees. According to the White House, “Skills-based hiring opens up opportunities to workers who have learned skills” outside traditional educational pathways.

As employers and HR leaders evaluate the most effective ways to make this happen in their own workplaces, new research from Deloitte highlights the benefits of applying AI-based solutions in skills-based organizations. The study, which surveyed over 1,000 workers and 225 business and HR executives worldwide, found that skills-based organizations are 79% more likely to provide a positive workforce experience and 63% more likely to achieve results compared to those without a skills-based approach.

A skills-based approach to workforce building

Combining AI and skills-based management helps organizations better align talent with skills, boosting productivity and worker satisfaction, according to Deloitte. AI-enabled organizations drive value and build trust by integrating technology into core business processes and workflows to support and enhance human capabilities.

A skills-based approach to workforce management emphasizes accessing, developing, measuring and rewarding workers based on their skills and competencies, rather than specific job requirements. Deloitte researchers say this leads to greater organizational agility, essential in a rapidly changing market in which 73% of business leaders expect talent shortages over the next three years.

Research suggests that employers will not only need to apply skills-based workforce planning to place individuals in needed roles and projects, but they also must prepare to enhance learning opportunities to build needed skills. An additional study, learning company D2L’s employee survey, reveals that employees largely count on their employer to help them build skills.

Nuances of a skills-based approach

The D2L report found that 41% of employees would turn to their current employer first for job- or industry-specific skill development, far surpassing other options. In comparison, only 17% would consider a community college and a mere 14% would opt for university training.

Chetan Jain, U.S. consulting HR transformation leader for Deloitte, notes that many employers will need to source for skills because they may not find workers with the necessary experience. He calls this a “business issue,” not just a human resource issue.

Skills-based structures are also taking root in human resources. Jain added that, for HR leaders in particular, many employers aren’t looking for direct industry experience.

Instead, they are seeking individuals who possess the needed skills but may have gained them in other industries or departments. Jain says some C-suite leaders are “clamoring” for HR leadership equipped with experience outside their applicable industry or even outside of HR.

HR tech innovation in action

As an interesting side note to the skills-based approach, new research from talent acquisition and management platform SHL recently identified the top 10 skills employers need for successful business transformation, identifying them as “scientifically proven to be the most aligned with having a great employee.” The data came from a subset of SHL’s assessment database of 560,270 respondents. These are:

A new services solution from IBM Consulting integrates with ServiceNow’s Talent Development platform. This solution connects IBM’s HR expertise and skills taxonomy data with ServiceNow’s AI-powered skills intelligence engine. This offering is designed to help organizations identify critical skills, close gaps, and recommend relevant training.

HR and payroll firm Deel announced the acquisition of device supply and management company Hofy, with plans to fully integrate Hofy into Deel and launch Deel IT in all markets this year. The move aims to enhance Deel’s comprehensive global workforce management capabilities, offering a more integrated solution for HR and IT coordination.

EWA provider Clair has partnered with HR and payroll platform Gusto. This collaboration will allow Gusto’s small business clients to offer their employees early access to earned wages through Gusto Wallet, which delivers financial and work productivity tools in addition to on-demand-pay access.

More from Human Resource Executive

Data shows that worker mobility has been waning for years, partly because companies fail to benchmark metrics that produce better outcomes. But there’s a more promising approach to finding internal prospects: leveraging technology—specifically the hot new capabilities unlocked by artificial intelligence, machine learning and large language models.

Digital fluency has become an especially sought-after employee skill, according to CompTIA’s June 2024 Workforce and Learning Trends Report. Given the prevalence of digital transformation, the workforce must evolve accordingly, according to CompTIA. For many employees, the journey toward digital proficiency often begins with basic digital literacy.

At this fall’s HR Technology Conference, the Women in Tech opening keynote features three individuals who are behind the scenes designing, developing and bringing products to market. Learn firsthand about their career journeys, why they are passionate advocates for technology that closes gaps and creates opportunities, and how each of them pays it forward. Register now.