The Rise of the Skills-Based Organisation

The Rise of the Skills-Based Organisation
Aon Insights Series UK

08 of 11

This insight is part 08 of 11 in this Collection.

May 31, 2024 5 mins

The Rise of the Skills-Based Organisation

Today's employers need to continually learn and adapt to emerging technologies and skills if they are to thrive in the talent landscape.

The head of reward at one of our clients said something at our last meeting that really struck me: “We have always paid for skills — we just didn’t call it that.”

That rang very true and you only have to look back at history to find several examples where organisations have paid over the odds to attract and retain talent. This is going back a bit, but think about Genghis Khan’s Mongol horde. The Horse Archer was able to earn much more money than any other soldier in the horde based on his ability to shoot an arrow backwards while riding a horse.

In today's world maybe the software developer with Artificial Intelligence (AI) skills is the modern equivalent of the Horse Archer. They are able to create more value than a non-AI developer. Just as the Mongolians used new tactics to conquer new territories, today's employers need to continually learn and adapt to emerging technologies and skills if they are to thrive in the current (and future) talent landscape.

While skills may not be new, our ability to use them at a level where we can drive actionable insight beyond the job family certainly are. For example, five years ago organisations realised that they needed to be more data-driven and that they needed data Centres of Excellence (COEs) where all the data expertise was concentrated within a few highly skilled teams.

Now, the skills-based organisation sets out to do something revolutionary versus the COE model. Using the same example of data, a skills-based organisation sets out to build data skills in everyone with an interest, skills adjacency or potentially a role requirement around it. Now it’s not just the COE that’s data-savvy but, thanks to knowledge being shared across the workforce, the entire organisation.

Take the example of AI. So that an organisation can truly drive exponential change and seize the competitive advantage we all believe AI will bring, should it hire a Chief AI Officer with a small team of highly skilled individuals? Or does it require cultivating a basic level of knowledge across a spectrum of the workforce, enabling the rule of many in order to realise this change?

Quote icon

Whatever budget you might set up for the skills journey, put the same amount aside for change management. And some IT resources to help get your system going.

Ranko Kunzemann
HR Center of Expertise Consultant – Dow Chemicals

Another important aspect of the skills-based organisation is creating fungibility across the workforce. We all want to have the ability to redeploy resources at a moment’s notice to areas of high demand. Recent cost pressures driven by high inflation have only added to this need. Skills intelligence across the workforce provides the foundation but a skills-based organisation can only be achieved with structure.

An organisation will need to create a common language around skills so that its technology team and the finance department can cross-compare the type of skills they have and understand if the finance analyst in an obsolete division has the necessary pre-requisite skills to be redeployed into a high demand software developer role. Being agile as an organisation is just as much about structure as it is about methodology. You need structure, processes and rules for an agile organisation to succeed. The same goes for the skills-based organisation of tomorrow.

Let’s go back to our AI problem. At Aon we monitor labour market trends — just one of the data sources that we use to help our clients make better people decisions. And what stands out is that more and more organisations are looking for AI skills, which brings to mind a quote from a Forbes article that states “AI won’t take jobs, but people who use AI will take jobs from those who don’t" – and our analysis is really starting to evidence this. For example, we have seen job ads for software engineer roles that require AI skills quadruple over the last year — and at previously never seen price points. For research scientists, it nearly doubled with a similar pay impact.

That means two things:

  1. AI skills are entering our workforces faster than ever before
  2. AI skills are breaking all sorts of records on the premium that they come with
Quote icon

Are we doing anything to prepare for AI? We need to understand how it will impact workforces, roles and individuals within those roles.

Ranko Kunzemann
HR Center of Expertise Consultant – Dow Chemicals

Those two things together present an interesting challenge to those of us in Human Resources — if we bet the house on something, we better get it right. The rule of many we need to solve for, fungibility is a byproduct of structure and if we get both these right any external shock to our eco-system, either positive or negative, should not faze us anymore.

The skills-based organisation with the right structure in place can be confident that tomorrow (while different from today) is just “another” tomorrow and it can evolve and change whatever the future holds.

Article by
  • John McLaughlin
    Partner, Talent Solutions; Europe, the Middle East and Africa, Aon

Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

Aon Insights Series Asia

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series Pacific

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series UK

Expert Views on Today's Risk Capital and Human Capital Issues

Construction and Infrastructure

The construction industry is under pressure from interconnected risks and notable macroeconomic developments. Learn how your organization can benefit from construction insurance and risk management.

Cyber Labs

Stay in the loop on today's most pressing cyber security matters.

Cyber Resilience

Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.

Employee Wellbeing

Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.

Environmental, Social and Governance Insights

Explore Aon's latest environmental social and governance (ESG) insights.

Q4 2023 Global Insurance Market Insights

Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.

Regional Results

How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.

Human Capital Analytics

Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.

Insights for HR

Explore our hand-picked insights for human resources professionals.

Workforce

Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.

Mergers and Acquisitions

Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.

Navigating Volatility

How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?

Parametric Insurance

Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.

Pay Transparency and Equity

Our Pay Transparency and Equity collection gives you access to the latest insights from Aon's human capital team on topics ranging from pay equity to diversity, equity and inclusion. Contact us to learn how we can help your organization address these issues.

Property Risk Management

Forecasters are predicting an extremely active 2024 Atlantic hurricane season. Take measures to build resilience to mitigate risk for hurricane-prone properties.

Technology

Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.

Top 10 Global Risks

Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.

Trade

Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.

Weather

With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.

Workforce Resilience

Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.

More Like This

View All
View All
Subscribe CTA Banner