Powering the Skills-Based Organization With Performance Data
The State of Skills Today
Skills are the new currency of work. While organizations still acquire new skills through outside hiring, many find that upskilling and reskilling their workforce is a more efficient route. With talent still scarce, a renewed focus on the bottom line, and constrained hiring, HR leaders need to know exactly the skills they have in-house today and the ones underway for tomorrow.
Our 2024 research on the progress organizations have made in building skills-based businesses shows that many companies have multiple avenues for assessing employee skills, identifying skills gaps, and developing employees. However, the solutions are still falling short. But why? And what can organizations do to fix it?
The research makes a few points clear. First, organizations have a data problem. People teams report sitting on a large amount of skills data, but is the data actionable? What organizations may need is not a plethora of data but cleaner, current, granular, and transparent data on their employees’ skills.
They can also benefit from having up-to-the-minute data that shows them the verifiable skills they have today and the skills that are under development. This is about uncovering hidden skills.
Second, businesses need a mechanism for verifying in-house skills. Skills from a resume and ones that employees enter into a talent marketplace, for example, are not necessarily current or validated.
Lastly, aligning talent capabilities with organizational needs requires the ability to connect the dots from the top strategic goals down to individualized employee development plans. And, it needs to be dynamic, powered by AI.
If companies can thread talent development data with learning and development — in other words, what they need with what they have — they can more efficiently uncover hidden talent and enhance their internal talent pipeline.
The “war for talent” has morphed into the war for skills. Organizations continue to be plagued with skills shortages and mismatches. Betterworks' latest research shows that nearly 8 in 10 companies have changed their job descriptions or lowered their standards to attract enough candidates.
Upskilling and reskilling internal talent remain the best options for shrinking the skills gap and maintaining high standards. A study by the Society for Human Resource Management (SHRM) found that a bad hire can result in a 36% decrease in team productivity.
Yet, internal talent pools can be murky or even hidden from organizations. If you don’t see where your problem lies, you can’t fix it. The issue may come down to having recent and verifiable skills data on employees.
of organizations use performance evaluations for measuring skills and competencies, but a majority do those assessments 1-2x per year
Most performance evaluations are backward-looking and insufficient for capturing timely and accurate data about an employee’s accomplishments. The same is true for skill-building.
Neither managers nor employees will be able to recall all the skills acquired and validate their level of proficiency over a 6-12 month period. Infrequent, incomplete, or unverified data leave you with an opaque view of the skills your workforce has and those that are under development.
believe managers play a key role in supporting employee skills development but 44% say more coaching and mentoring are needed
Managers are the most closely attuned to their teams' performance and aspirations. They can offer guidance to help employees upgrade and develop their skills in alignment with the organization's strategic business objectives.
Yet, one in three employees receives little or inconsistent guidance from their managers. Nearly half of HR leaders and non-HR managers say coaching and mentorship are a missed opportunity to help employees grow and develop their skills.
They also cite identifying and addressing individual employee skills gaps as core weaknesses.
Clearly, more consistent coaching from managers will help. Better tools and training to support managers, personalized employee development plans, and the ability for managers to verify skills will enable organizations to connect the dots between the skills they have and the ones they need.
believe using tech can alleviate the skills shortage and 96% say that personalized skilling plans are important for addressing individual employee skill gaps
One of the biggest wins organizations have in promoting skills development strategies and opportunities is their performance management systems. Half cited these tools — which provide rich data that can be extracted from goals, conversations, feedback, and recognition — as a strategy or opportunity.
To make the most of these solutions, organizations need to ensure they collect this data regularly and frequently. Their tech should leverage AI to extract skills data from these systems, their HRIS, and talent marketplaces to create a dynamic skills inventory.
Once managers have accurate assessments of their teams' skills, they can work with their employees to identify missing skills that will inform individual development plans. HR will also gain a comprehensive view of organizational talent to improve strategic workforce planning.
barrier to skill-building is lack of time even though this is one of the top ways organizations say they encourage skill development
Just under half of managers and HR leaders – 44% — say time constraints are the biggest barrier to employee participation in skilling programs.
Elevate skill development as an organization-wide mandate and priority. Ensure that employees have adequate time to regularly learn new skills based on a personalized employee development plan that is aligned with organizational needs. This will enable you and your employees to optimize their time and efforts to develop skills needed for organizational success.
Building a Solid Foundation
In today’s ever-evolving business landscape, the need for a skills-based approach is no longer just a forward-thinking strategy. It’s a pressing necessity. As organizations grapple with rapid technological advancements, shifting market demands, and a competitive talent landscape, HR leaders are increasingly recognizing that a skills-driven model is crucial for sustainable success.
In response, companies have heavily invested in front-end processes related to recruiting and talent marketplaces. However, the foundation remains unstable without updated, accurate, and verifiable skills data. Ready access to this data serves as the "load-bearing wall" that supports the weight of the entire house—in this case, an organization’s internal skill-building efforts.
If companies can integrate talent development data with learning and development programs effectively, they can uncover hidden skills, enhance their internal talent pipeline, and more efficiently achieve their strategic objectives.
1,121
Survey Respondents in the US
15+ Industries
48% HR manager and above
52% Non-HR manager and above
500+ Employee Companies
Full-employed Workers
Age & Gender Balanced
Discover Betterworks
Founded in 2013, Betterworks is the pioneer in intelligent performance management solutions that help workforces and organizations achieve their highest potential. Betterworks reimagines performance management for all with an enterprise-ready platform that fosters greater manager effectiveness and employee performance, leading to higher satisfaction and retention and better business outcomes.
Our customers’ employees are proven more engaged and satisfied in their roles, which is why industry leaders like Colgate-Palmolive, Intuit, ATB Financial, Freddie Mac, Arcesium, and the University of Phoenix rely on Betterworks to manage and enable excellent performance. Betterworks is backed by Kleiner Perkins, Emergence Capital, and John Doerr.
