Creating foundations is one of the oldest human activities. These stone, wood, mud and straw structures that stabilize homes and buildings date back as far as the Neolithic Age. They were essential to the progression of humanity, helping people settle, embrace agriculture and build towns and cities.
People today face a similar phenomenon as work shifts from rigid job structures to more task- and project-based models. For this change to succeed in organizations, people today — just like our settler ancestors — need strong foundations. I’ve seen this firsthand, as Degreed works with companies all over the world like Cisco and Unilever to help them create strong foundational skill taxonomies that support successful skill strategies.
Now, talent development professionals and business function leaders around the world are coming together to build these foundations. That’s why you may soon hear more and more about skill taxonomies, skill inventories, skill frameworks and skills-based organizations. They are all components of the same evolution, in which L&D pros say goodbye to the job architecture as we know it and instead break work down into the skill sets required to complete it.
Traditional work doesn’t cut it.
How did we get here? Skills gaps are widening across industries, and traditional talent models like competency models aren’t sufficient to help plug those gaps. Those competency models are too complex and static, and they’re never used the way L&D leaders hoped, because they become quickly outdated. Contrast that with skill taxonomies that focus more on what people can actually do for a particular job. They’re dynamic and constantly updated as new skills emerge and others fade.
Emerging technologies such as automation and artificial intelligence have exacerbated the skills gap. As a result, it’s estimated that companies urgently need to upskill 1.1 billion people for new roles by 2030. If they succeed, they could potentially boost GDP by $6.5 trillion.
Two things, therefore, are critical in every organization: Upskilling for the most in-demand skills for the future and moving people to the right projects and roles based on their skills.
Breaking Work Down
Thinking in terms of individual skill sets enables greater insights into someone’s possible job transition pathways. By understanding what skills people have and what skills they need, workers can know exactly what learning and experiences it takes to get a promotion or move laterally into other roles and departments (permanently or temporarily) based on what a business needs. If an employees’ roles are at risk due to a business pivot or automation, people leaders can proactively redeploy and reskill them for other positions that align with their existing skills. It ensures everyone remains employable, with the right skills to do their work now and in the future.
Introducing the Skills Taxonomy
The first step in breaking down work is creating a skills taxonomy.
Traditionally, a skills taxonomy has looked different from company to company and evolved as the workforce and the world has changed. Numerous data sources including recruiting, HR, and learning data (resumes, roles, job descriptions, learning activities, career goals and performance feedback) have informed this evolution.
To create the most accurate taxonomies, companies have combined learning data with HR and recruitment data. While workers often update their resumes or complete performance reviews only annually, they are learning every day. With insights from learning and HR systems, a more comprehensive overview of someone’s skills emerges.
Creating a Global Skills Taxonomy
The prospect of a shared skills taxonomy is incredibly exciting. It would put everyone in L&D and business on the same page when talking about skills in their respective organizations and across their industries. By understanding what key skills are involved in a role at a macro level, business leaders could make better decisions about recruitment, internal mobility and upskilling and reskilling. Creating a common skills taxonomy also heralds greater collaboration between governments and organizations around the world.
The World Economic Forum (WEF) is actively working on a common skills taxonomy in partnership with leading organizations, including Degreed. This work is helping to reduce the need for every company, content provider and systems provider to create their own unique taxonomy. The goal is to create a common language for skills. Once this common taxonomy is complete, organizations will be able to adopt it wholesale or adapt it to their unique roles and job descriptions. Typically, around 80% of the skills in an organization are common while 20% are unique, so this taxonomy will do most of the heavy lifting for most organizations.
Getting Future-Ready
Most organizations will have to adopt some kind of skills taxonomy in the near future to remain competitive in an ever-changing business landscape. Skills-based approaches are becoming more commonplace, with Unilever, Walmart and other companies embracing parts of this new work model. Jobs are increasingly blurring, with Deloitte finding that 63% of current work falls outside of core job descriptions and 81% is being performed across functional boundaries. The only way to implement skills-based processes in areas like hiring or career development, in a consistent and fair way, is to start with a skills taxonomy. Otherwise, you’re operating with a significant blind spot.
A taxonomy benefits an entire organization. Clear benefits to employees include greater career opportunities and more personalized learning based on their skills. HR teams and people leaders gain a much better idea of someone’s job fit, which removes potential bias from promotion and recruitment decisions. Learning teams can easily map content to skills, targeting areas aligned to the business and individual goals. Operationally, a skills taxonomy fosters more responsiveness and agility, because people can be easily redeployed. And more often than not, a critical skills gap won’t catch the business unawares.
Moreover, having a skills taxonomy that adapts as your business and the market changes enables you to understand how your workforce skills, roles and projects are evolving in response.
Making Skills-Based Work a Reality
As jobs change quickly and the old-fashioned idea of building a competency model and formal job descriptions doesn’t keep up, “companies need systems that can continuously identify the skills that drive success, organize and arrange these skills so people can find them, and systems that help individuals and managers develop themselves for the skills of the future,” according to industry analyst and author Josh Bersin, founder and CEO of the Josh Bersin Company.
As more businesses embrace this approach, L&D leaders need to set common standards and adopt shared terminologies for skills — particularly now, when new skills are emerging faster than ever and one company’s Brand Evangelist is another’s Customer Marketing Manager.
A common skills taxonomy will clarify and elevate L&D, and that’s why it’s crucial that cross-industry collaborations happen now, while many skill-based organizations are still in their infancy.
Want to learn more about skills data and strategy? Visit our Skills topic page to discover additional blogs and resources.