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Taking the �rst steps toward the skills-based organization

G RWHV
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)
2 2 ( FH U MRE KD H EHH KH Unilever: “We’re beginning to think about each
dominating structure for work—de ning how UROH D 8 LOH HU D D FROOHF LR RI NLOO UD KHU KD
ZRUN L R H E ZKRP KRZ L L PD DJH LPSO D MRE L OH H SODL L K 6L JK KHD RI
D OH D KRZ ZRUNHU DUH SSRU H E H HU 5 IRU 8 LOH HU L UDOLD D 1HZ HDOD
5 SUDF LFH IURP KLUL J R FRPSH D LR R FDUHHU
SURJUH LR R SHUIRUPD FH PD DJHPH , R FFRU L J R D JOREDO HORL H U H RI PRUH KD
HPEH H L H HU KL J FRPSD LH R KD SHRSOH 1,200 professionals, organizations are increasingly
UDUHO RS R T H LR L D DOO H SHULPH L J ZL K ZKD KH KRSH L D EH HU ZD
HFR SOL J RPH ZRUN IURP KH MRE HL KHU E
But con ning work to standardized tasks done in a atomizing it into projects or tasks, or broadening it
I F LR DO MRE D KH PDNL J DOO HFL LR DER R L L IRF H R SUREOHP R EH RO H R FRPH
workers based on their job in the organizational R EH DFKLH H RU DO H R FUHD H SHRSOH FD EH
KLHUDUFK KL HU RPH RI R D PR FUL LFDO freed from being de ned by their jobs to being seen
organizational objectives: organizational agility, D ZKROH L L L DO ZL K NLOO D FDSDELOL LH
JURZ K D L R D LR L HU L L FO LR D that can be uidly deployed to work matching their
equity; and the ability to o�er a positive workforce L HUH D R H RO L J E L H SULRUL LH
H SHULH FH IRU SHRSOH E ED L J SHRSOH HFL LR R NLOO PRUH KD MRE
organizations can still have a scalable, manageable,
In response, organizations are moving toward a and more equitable way of operating. We call this
ZKROH HZ RSHUD L J PR HO IRU ZRUN D KH HZ RSHUD L J PR HO IRU ZRUN D KH ZRUNIRUFH
ZRUNIRUFH KD SODFH NLOO PRUH KD MRE D KH “the skills-based organization.”
FH HU 2 H FRPSD SLR HHUL J KL PR H L

6. 6 1
We broadly de�ne “skills” to encompass “hard” or technical skills (such as coding, data analysis, and
accounting); human capabilities or human skills (such as critical thinking and emotional intelligence);
and potential (including latent qualities, abilities, or adjacent skills that may be developed and lead
to future success). Eventually, we see the word “skills” becoming short-hand for more granularly
de�ning workers as unique, whole individuals—each with an array of skills, interests, passions,
PRWLYDWLR V ZRUN RU FXOWXUDO VW OHV ORFDWLR SUHIHUH FHV D G HHGV D G PRUH
 8 LOH HU IRU H DPSOH D L HU DO DOH HSDU PH DO ZRUN D 8 LOH HU L EHL J L L H
marketplace enables skills to uidly move to L R SURMHF D N D HOL HUDEOH 8O LPD HO
projects and tasks across the organization, either OO HH LORH HSDU PH EUHDNL J RZ L KH
as a permanent employee or as a “U-Worker”: a I UH ZL K D PRUH JUD ODU PH KR RI LHZL J
ZRUNHU ZKR KD D J DUD HH PL LP P UH DL HU HPSOR HH FR ULE LR IRF H R R S D
along with a core set of bene ts, and who contracts NLOO UD KHU KD R HDU ZL K D MRE L OH R
with Unilever for a series of short-term projects. understand what each employee brings. “When you
( SODL 3D ULFN OO LFH SUH L H RI I UH RI FD JH R KD OH HO RI H DLO R FD JH P FK
work at Unilever, “We just see that there’s all this PRUH DUJH H L R U UHFU L PH L R U L HU DO
RSSRU L KD ZH FD ORFN IRU SHRSOH KD PRELOL RI DOH D DSSO L J KH ULJK DOH R
PD EH ZH ZR O KD H EHH FR L HUL J EHFD H KH ULJK D N D SURMHF D KHUHE DO R
as with many organizations, we would have been DFFHOHUD H E L H SHUIRUPD FH
PRUH L R U I F LR DO LOR , FUHD L JO
2 JD L DWLR V D H PRYL J
WR D G D H DSS RDF

2 3/2 2: organizations are thinking workers for a skills-based model over one based on
about the move to skills-based organizations MRE KL ZD USUL L J EHFD H ZH H SHF H
and how (or if) they are operationalizing it, more organizations to resist moving away from a
ZH FR F H ER K T D L D L H D T DOL D L H jobs-based model for organizing work and making
UH HDUFK U H L J ZRUNHU D decisions about workers ( gure 1).
E L H D 5 H HF L H DUR KH ZRUO D
across industries, and interviewing nearly a dozen Despite this overall move, fewer than one in ve
H HF L H FUR DOO KH ZRUNIRUFH SUDF LFH are adopting skills-based approaches to a
ZH D NH DER ZH L FR HUH D SOH KRUD RI signi cant extent: across the organization, and in a
H SHULPH D LR ZL K D D UR J LUHF LR DO clear and repeatable way. These early skills-based
move toward) skills-based organizations, as well as SLR HHU DUH DFKLH L J EH HU E L H UH O KD
D UR J SUHIHUH FH IURP ER K H HF L H D those with jobs-based practices ( gure 2).
FIGURE 1

Executives and workers want a new approach to jobs and work

WHAT DO YOU BELIEVE IS THE BEST WAY TO ORGANIZE WORK TO CREATE VALUE
FOR WORKERS AND THE ORGANIZATION?

Business executives Workers

Fractionalized Broadened
work work
60% 39%
Broadened Fractionalized
work work
21% 38%
Traditional Traditional
work work
19% 23%

Fractionalized work: Workers who flexibly flow to tasks, assignments, and projects based on their skills and interests

Broadened work: Structuring worker roles and responsibilities around broad problems to be solved or outcomes to be achieved

MANY WORKERS FEEL THEIR EMPLOYERS VALUE JOB EXPERIENCE AND DEGREES OVER SKILLS

59% 36%
OF WORKERS OF EXECUTIVES
say their organization say their organization
values job experience and values job experience and
degrees over demonstrated degrees over demonstrated
skills and potential skills and potential

BUT WORKERS WANT SKILLS-BASED PRACTICES AND WILL VOTE WITH THEIR FEET TO GET THEM

73% 66%
OF WORKERS OF WORKERS

say skills-based practices say they would be more likely

would improve their to be attracted to and remain
experience at work at an organization that values
and makes decisions based
on their skills and potential
rather than on jobs and degrees

AND EXECUTIVES SAY THEIR ORGANIZATIONS ARE MOVING TOWARD A SKILLS-BASED APPROACH

89% ~90%
OF EXECUTIVES OF EXECUTIVES
say skills are becoming say they are now actively
important for the way experimenting with skills-based
organizations are defining approaches across a wide range
work, deploying talent, of workforce practices
managing careers, and
valuing employees

Source: Deloitte Skills-Based Organization Survey, May–June 2022.

FIGURE 2

Skills-based organizations see results

Organizations that embed a 63%

skills-based approach* are MORE LIKELY TO
achieve results** than those
that have not adopted
skills-based practices

SKILLS-BASED ORGANIZATIONS ARE...

107% 98% 98%

MORE LIKELY TO MORE LIKELY TO HAVE MORE LIKELY TO
place talent effectively a reputation as a great retain high performers
place to grow and
develop

79% 57% 52%

MORE LIKELY TO HAVE MORE LIKELY TO MORE LIKELY TO
a positive workforce anticipate change and innovate
experience respond effectively
and efficiently

49% 47%
MORE LIKELY TO MORE LIKELY TO
improve processes to provide an inclusive
maximize efficiency environment

* Skills-based organizations ratio reflects the combined weighted ratios of the HR executive survey item “Our organization's
business and HR executives are aligned on the importance of skills in making decisions about work,” and the worker survey
items “My employer treats workers as whole, unique individuals who can each offer unique contributions and a portfolio of
skills to the organization,” “My organization supports me in pursuing opportunities to create value through activities that
are outside of the direct scope of my job,” and “My organization makes it easy to apply my skills where they are most
needed.”
** Results are defined as 11 business and workforce outcomes: meeting or exceeding financial targets; anticipating change
and responding effectively and efficiently; innovating; achieving high levels of customer satisfaction; positively impacting
society and communities served; improving processes to maximize efficiency; being a great place to grow and develop;
placing talent effectively; providing workers with a positive workforce experience; providing an inclusive environment; and
retaining high performers.
Source: Deloitte analysis of Deloitte Skills-Based Organization Survey, May–June 2022.

This indicates that those who’ve adopted skills- D IRU D

based approaches to a signi cant extent are R L R OR
building organizational models that better align to
their organizations’ needs—and workers’ KL KLI L DSSURDFK L D UH O RI H HUDO EURD HU
H SHF D LR R D business shifts:
2 1 7 216 2: 1 :2 . 6 0 1 2
6 16 2 63216 / 7 2 02 872120
7 :2 . 6 : / DOI RI KH ZRUNHU ZH U H H DL KH DUH
KHUH D JURZL J DFN RZOH JPH RI KH PRUH OLNHO R EH D UDF H RD UHPDL D D
importance of human-centricity at work: 79% of organization that grants them more agency and
E L H H HF L H DJUHH KD KH S USR H RI KH FKRLFH L KRZ KH DSSO KHLU NLOO R ZRUN
organization should be to create value for workers Although workers want to realize their full
D K PD EHL J D ZHOO D IRU KDUHKRO HU D potential and be seen as individuals, only 26% of
society at large, and 66% are facing increased ZRUNHU UR JO DJUHH KD KHLU HPSOR HU UHD
SUH UH R KRZ KHLU FRPPL PH R RL J R them as whole individuals who can o�er unique
PR L J IURP UKH RULF R UH O ER D T DU HU FR ULE LR D D LT H SRU IROLR RI NLOO R
of workers (27%) strongly agree that their the organization.
organization is making progress on this front,
while 64% say they would be more attracted to
and remain at an organization that does so,
RI E L H H HF L H
L LFD L J KD SHRSOH ZD R ZRUN ZKHUH KH D HH KHL R D L D LR
KR OG KHOS KHL R NH
feel the organization is contributing to their growth
and realization of their potential, and where they
IHHO HH DO H D UH SHF H , HD RI U L J EHFRPH PR H HPSOR DEOH
H HU R H L R KH DPH NL RI FR ULE RU
through standardizing them in jobs, skills-based L K HOH D NLOO E R O
organizations let people’s uniqueness as humans
KL H KUR JK ZL K ZRUN DLORUH R KHLU UH J K
R O D HH KH D H
L H L H R K L KHOSL
5HIRF L J ZRUN DUR
KH NLOO UHT LUH R R R D
KH SHRSOH RL J L D
SSO L J KH
SHRSOH OHD H NLOO R
HFH DU NLOO UDL L J FD DO R L FUHD H NHHS S L K KH FKD L
R OG RI R N
HPSOR DELOL )RU H DPSOH L H LI L J D MDFH RU
IR D LR DO NLOO RI ZRUNHU ZKR DUH L SODFH E
D RPD LR RU ZKR H UROH DUH R OR JHU HH H
can help organizations redeploy them to work that 7 / 17 6 2 7 6
L HH H Seventy-three percent of business executives
H SHF R FR L H R H SHULH FH DOH KRU DJH
Skills-based organizations can also promote equity: over the next three years, and 70% of those
80% of business executives say making decisions UH SR H D KH DUH JH L J FUHD L H DER
DER KLUL J SD SURPR LR FFH LR D R UFL J IRU NLOO UD KHU KD M FR L HUL J MRE
HSOR PH ED H R SHRSOH NLOO UD KHU KD H SHULH FH )RU H DPSOH JOREDO FRPPHUFLDO UHDO
KHLU MRE KL RU H UH L KH MRE RU H ZRUN estate rm Cushman & Wake eld looked to
ZR O UH FH ELD D LPSUR H IDLU H D HU D KRZ KH NLOO D D MDFH NLOO RI
75% say hiring, promoting, and deploying people KR H ZKR HU H L KH PLOL DU FK D
ED H R NLOO H UH MRE KL RU RU H ZRUN OHD HU KLS SURMHF PD DJHPH H JL HHUL J
can help democratize opportunity and improve UD HJLF SOD L J D PDFKL HU PDL H D FH
DFFH RL could easily be applied in an entirely di�erent
L U D H RI UROH K UHFU L L J IURP D
underutilized talent pool.
7 1 2 /7 formed “refrozen” job. But with newer technologies
, D HUD RI DFFHOHUD L J RI H SUH LF DEOH FR L R O UH KDSL J MRE PD DUH ORRNL J IRU
change, 85% of business executives say that new structures of organizing work that enable
organizations should create more agile ways of people to continually ex as needed, instead of
organizing work to swiftly adapt to market changes. unfreezing and freezing jobs over and over again.
COVID-19 is a case in point: A host of examples,
such as Virgin Atlantic loaning its furloughed ight 61 / 9 1 2 -2 6
D H D R 8. KR SL DO R KHOS ZL K F RPHU 3UREDEO D D UH O RI DOO KH H IDF RU KH FR FHS
FDUH 7 HPR UD H KD ZRUNHU DUH IDU PRUH of a job itself is less relevant than before. A full 71%
FDSDEOH KD ZH KL N RI HSSL J R L H KHLU RI ZRUNHU DOUHD SHUIRUP RPH ZRUN R L H RI
DO MRE RD DO H L HZ ZD the scope of their job descriptions, and only 24%
UHSRU KH R KH DPH ZRUN D R KHU L KHLU

RI E L H D G 5 organization with the same exact job title and

level. Meanwhile, 81% of business executives
executives say exibly D ZRUN L L FUHD L JO SHUIRUPH DFUR

PR L NLOO R R N L
I F LR DO ER DULH

F L LFDO R D L D L PD ZRUNHU R H H SOD R SHUIRUPL J

work through a “job” at all anymore. Over half of
I H GL S LR workers (55%) say they already have, or are likely
R ZL FK HPSOR PH PR HO KUR JKR KHLU
7 /7 16 2 0 7 21 careers— uidly moving from permanent full-time
Sixty-one percent of business executives say new MRE KUR JK SURMHF R L HU DO DOH
technologies such as automation and arti cial PDUNH SODFH IUHHOD FL J D JLJ ZRUN
L HOOLJH FH , KD UHT LUH HZ NLOO ZLOO EH D IRU H DPSOH
primary driver of their organization adopting a
skills-based approach. Automation is pushing ,I MRE DUH R OR JHU D HI O FR U F R PHH
organizations to “unfreeze” their jobs, disaggregate organizational goals and worker needs, many
KHP L R KHLU FRPSR H D N D ED N D organizations are realizing it’s time to change
then hive o� those that can be automated and KHLU DSSURDFK
UHD HPEOH KH UHPDL L J D N L R D HZO
7 H VNLOOV EDVHG
R JD L DWLR L S DFWLFH
. //6 6 2 1 7 216 23 7 FR ULE LR D D SRU IROLR RI NLOO D
based on four principles ( gure 3): FDSDELOL LH KD PD FK KH ZRUN

Using skills, rather than jobs, to make

Liberating work from the con�nes of the decisions about work and the workforce
by reorganizing work as a portfolio of uid IURP ZKR SHUIRUP ZKD ZRUN R SHUIRUPD FH
U F UH L FO L JD EH R KH MRE PD DJHPH R UHZDU R KLUL J

Reconceiving workers from being Building a “skills hub,” D H JL H RI NLOO

employees in jobs to being a “workforce of D D HFK RORJ JR HU D FH D PRUH R SRZHU
—individuals who work on- or o�-balance- KH H HFL LR
KHH HDFK ZL K D LT H DELOL R PDNH

FIGURE 3

The skills-based organization: A new model for work and the workforce

WHAT
HOW THE WORK WHO
IS ORGANIZED? WHO DOES
A portfolio of fluid structures THE WORK?
in which skills flow to the work, including
and beyond the job: Individuals with a unique portfolio
of skills and other attributes, rather
Tasks Outcomes
Jobs than standardized job holders
Projects Problems to
be solved Hard skills
Human capabilities
Fractionalized Traditional Broadened
work work work Adjacent skills
Potential
SKILLS HUB
Skills talent philosophy
Skills governance
Skills data and tech
Skills framework and
Work and skills common language Workforce
architecture planning

Performance HOW ARE Learning and

management development
DECISIONS MADE?
Skills, rather than jobs, inform
Careers workforce decisions from Rewards
hire to retire

Leadership and Talent

succession planning acquisition

HOW
Source: Deloitte analysis.

Deloitte Insights | [Link]/insights

Let’s explore each to understand how skills-based Some are taking this concept across organizational
organizations operate in practice. ER DULH HPSRUDULO ORD L J RU ERUURZL J
workers from other noncompeting organizations
for projects, tasks, or roles in the form of cross-
L UD RU D RU U FRPSD DOH H FKD JH )RU H DPSOH KH 86
from the con�nes of the job HSDU PH RI HIH HD SUL D H HF RU HIH H
organizations jointly created the Public-Private
DOH ( FKD JH R KDUH DOH DFUR
organizations through temporary projects
URP :RUN L D D D LJ PH
QF QD DF

enabling greater agility and more �uid, RI 5 H HF L H

P DQ QJ SDF DJ
DQ Q
QF QJ
D KH D H SOD L R
FR LGH L HGH L L KH
One approach to organize work without jobs is to D R N L R D L HG R
fractionalize the work: breaking it down into more
PHD L JI O FK N RI ZRUN L KH IRUP RI SURMHF
that skills can be exibly
RU D N KD FR L R O H RO H D E L H HH SR HG DF R R N R H KH
FKD JH OH L J ZRUNHU ZL K D UHOH D
skills and capabilities ow to the work. This
SRU IROLR RI
H K HH HD
DSSURDFK L JDL L J JUR D L D RFD H E
OHD L J KL NHU FK D 5D L H KD D D D R H RI KH D KRU OD R L D SUH LR
RK R UHD L KHLU UHFH ERRN W W DU LFOH W , organizations can also go
Many organizations are experimenting with the other direction and broaden work, organizing
partial fractionalization in the form of W it around exibly applying skills to achieve
W W W : letting workers carve out a R FRPH RU RO H SUREOHP 2 U UH HDUFK UH HDO
SRU LR RI KHLU LPH IURP KHLU UD L LR DO MRE R that organizations that do this are nearly twice as
DNH R SURMHF D D N D ZKHUH L KH likely to place talent e�ectively and retain high
organization based on their skills and interests, SHUIRUPHU D ZHOO D KD H D UHS D LR D D JUHD
ZL K RSSRU L LH JJH H R KHP KUR JK SODFH R JURZ D H HORS
AI-powered matching technology. At Haier, the
entire organization of more than 75,000 employees Cleveland Clinic, for example, moved from being
works in a fully fractionalized work model, with an organized by medical specialties and speci c job
L HU DO DOH PDUNH KD JR HU KRZ DOH L titles such as “doctor” or “nurse” to broadly
deployed on speci c projects, structured into self- de ning all sta� as “caregivers” responsible for
organizing, uid microenterprises, each with 10 to UHD L J R M SK LFDO DLOPH E DO R SD LH
HPSOR HH 9
spirit and emotions. Instead of organizing
departments based on the medical specializations,
JUR S ZHUH L HD IRUPH DUR KH SD LH OR RU IRU RI R
D KHLU LOO H H FUHD L J P O L L FLSOL DU
collaborative teams―which also sparked
L R D LR L HZ UHD PH 2 U UH HDUFK
suggests that organizations are moving to broaden P
the job, providing more exibility regarding what
is done within it ( gure 4). Twenty-four percent of
PDQ PDQ D Q S Q
surveyed workers report that their organizations
work and skills, with workers seen as T
DUH DOUHD EHJL L J R R KL PD
be on- or o -balance-sheet
O KR JK KHUH ZLOO DOZD EH D SODFH IRU KH
traditional job, organizations are increasingly
looking to create a portfolio of di�erent ways to When workers are unbound from being de ned by
organize work, using di�erent options for di�erent their organizations as their “job,” work is no longer
ZRUNIRUFH RU E L H H a one-to-one relationship between employees and

FIGURE 4

Organizations are moving to broaden the job

IN THE PAST THREE YEARS, 82%

OF HR EXECUTIVES
say they have
multiskilled workers
who can do tasks
from different jobs

79%
OF HR EXECUTIVES
say they have evolved
roles to be bigger and
more integrative, often
embracing adjacent job
functions
43%
OF HR EXECUTIVES
say they have
reduced the
number of job
levels and layers

34%
OF HR EXECUTIVES
say they have reduced
the number of job types

Source: Deloitte Skills-Based Organization Survey, May–June 2022.

Deloitte Insights | [Link]/insights
jobs but rather a many-to-many relationship skills-based organization gives everyone the ability
EH ZHH ZRUN D NLOO ZL K ZRUNHU HH D D R DFFH KH SH RI H SHULH FH KD SUH LR O
“workforce of one,” RU LT H L L L DO ZL K D ZHUH UH HU H R O IRU KR H ZL K SHUFHL H KLJK
SRU IROLR RI NLOO D KH DELOL R PDNH potential, now democratizing opportunity for all.
PHD L JI O FR ULE LR R D UD JH RI ZRUN
Organizations that view workers this way are more
likely to have better nancial results, anticipate LOO R D L LR
and respond e�ectively to change, and retain high D R RU D RU IRU
SHUIRUPHU DPR J R KHU UH O ( H KR JK
72% of surveyed workers say it would improve their
experience at work, only 12% say they are able to
customize and personalize their work P F Q D JDQ
UH SR LELOL LH ED H R KHLU LT H NLOO DQ PD F Q D
FDSDELOL LH D L HUH KUR JK SURMHF D
L HU DO JLJ RU FKRR L J KHLU RZ D N RD
F Q D JDQ D
signi cant extent. Q , and eventually, on other unique
D D
LPSRU D D SHF RI LHZL J ZRUNHU R D MRE
holders but as unique individuals is recognizing
KD H HU L L L DO KD KH FDSDFL R FR L DOO ,I MRE DUH L FUHD L JO OH UHOH D D KH R O
OHDU D JURZ D HFL H KRZ KH HSOR KHLU organizing construct for work, and skills become
skills to work. By breaking out of the con nes of KH HZ HUO L J L RI ZRUN KL UHT LUH
KH MRE ZRUNHU FD PRUH HD LO U HZ KL J R R KL J OH KD D HD FKD JH L KRZ PD DJHU
FR L R O OHDU E LO R KHLU D MDFH NLOO R D 5 RSHUD H R SSRU KH ZRUNIRUFH
ROL LI HZ R H D OH HUDJH KHLU IR D LR DO
FDSDELOL LH FK D HPR LR DO L HOOLJH FH RU R D H HU DOH PD DJHPH SUDF LFH L ED H
problem-solving in whole new ways. This is R KH MRE 5 ZUL H MRE H FULS LR H
learning as it is done best: in the ow of work, compensation, creates organizational charts,
H SHULH LDO D DSSOLH R UHDO SUREOHP D KD and assigns training—all around prede ned jobs.
0D DJHU KLUH JL H IHH EDFN SURPR H D
organize their teams around jobs. And workers
O RI E L H SURJUH KUR JKR KHLU FDUHHU E PR L J R KH

H HF L H R O D HH next higher-ranking job. Talent management, in

this view, is standardized and process-driven,
KD KHL R D L D LR L siloed and centralized, and based on a supply

L KH R NIR FH NLOO FKDL RULH H LHZ RI KH ZRUO

KH ZRUNIRUFH L D L HUFKD JHDEOH UH R UFH R EH
KD D PH KD

D G FDSDELOL LH R KHL SSOLH D PD DJH D FR UD KHU KD D LT H

I OOH SR H LDO
D H R EH F O L D H

The skills-based organization turns talent

In the past, only select “high potentials” were given management on its head, rede ning and
the opportunity to tackle business-critical UHLPDJL L J H HU DOH SUDF LFH R EH ED H
challenges or move around to di�erent projects, PRUH R NLOO D OH R MRE
JL L J KHP KH H HORSPH HH H R UL H D
6. //6 6 1 ED H R D MDFH NLOO RU IR D LR DO K PD
Take hiring, for example. When a work need arises, capabilities such as learnability. Workers then
KLUL J PD DJHU SLFDOO HID O R RSH L J D MRE KD H KH DELOL R E LO R KH IR D LR RI R KHU
UHT L L LR D KH H DOJRUL KP R FUHH FDSDELOL LH R FR L DOO H HORS KH KDU NLOO
FD L D H ED H R SULRU MRE H SHULH FH D KH HH
degrees. But with a skills-based approach, they
would rst determine how best to structure the 6. //6 6 :2 . 2 3/ 11 1
ZRUN KUR JK D UD L LR DO MRE RU R KH NLOO The move to a skills-based approach for this
HH H R SHUIRUP KH ZRUN D ZKR L EH HOHFRPP LFD LR FRPSD KD KH D H
SR L LR H R HOL HU KH ZRUN IRU H DPSOH bonus of providing the organization with a host of
D HPSOR HH RU D H HU DO ZRUNHU FK D D NLOO D D R L IRUP ZRUNIRUFH SOD L J , HD
IUHHOD FHU ZL K ZRUNHU KH EHL J HOHF H RI SOD L J IRU KHD FR L MRE L FD RZ SOD
ED H R KHLU NLOO L J , R HU D IRU NLOO HU D L J R R O ZKD NLOO KH
KH FDSDELOL LH ZRUNHU KD H KD DUH FRUUHOD H ZRUNIRUFH SR H H R D E ZKD NLOO KH
to their success—using “a rmative” lters that organization could easily have if, with a bit of
“screen in” based on skills and demonstrated L H PH L E LO R KH IR D LR DO D
FDSDELOL LH H H LI KH H ZRUNHU KD H H HU KD D MDFH NLOO RI L H L L J ZRUNHU R
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Organizations are starting to experiment here: 1 0 1 0 17
IBM uses AI-based system CogniPay to make pay With a skills-based approach, managers’ and
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 7 1 6. 67 7 6 The good news? Sixty-three percent of business
and HR executives already say their organization’s
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67 21 7 1 Yet organizations still feel they have quite a bit
7 12/2 1 / 6 RI ZRUN R R R DNH I OO D D DJH RI FK
1HZ H HORSPH L HFK RORJ PDNH KH technologies ( gure 5). Some organizations don’t
skills-based organization possible for the rst time. H H N RZ ZKD NLOO KHLU ZRUNIRUFH SR H H
Technologies span the gamut from AI-powered LI R UH JRL J R EH PDNL J HFL LR DER
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R MRE

FIGURE 5

How organizations use technology to power a skills-based organization

HR executives reporting how effectively they use technology in the service of skills

Identification of the skills that the business strategy demands

63%

Skills-related technology embedded in core HR information systems

63%

Documentation of the full range of each employee's skills and capabilities

57%

Documentation of the skills and capabilities of an organization's off-balance-sheet workers

54%

Stand-alone AI-driven skills technologies

49%

Skills analytics
45%

A single source of skills data across the entire workforce

33%

Source: Deloitte Skills-Based Organization Survey, May–June 2022.

FIGURE 6

How organizations understand and verify the skills of their workforce

48% 68%
OF BUSINESS AND OF BUSINESS AND
HR EXECUTIVES HR EXECUTIVES
are confident that the are confident that the hard
human capabilities they skills they have documented
have documented on their on their workforce are verified
workforce are verified and valid
and valid

39% 29%
OF WORKERS OF WORKERS
strongly agree they have strongly agree they
a full understanding of have a full understanding
their skills and capabilities of the skills and capabilities
of their coworkers

HOW ORGANIZATIONS DOCUMENT AND VALIDATE THEIR WORKERS’ SKILLS AND CAPABILITIES

Credentials (e.g., degrees, certificates, industry certifications, licenses, apprenticeships)

58%

Peer or manager feedback, assessments, or endorsements of skills

55%

Digital assessment tools (e.g., psychometric assessments, simulations, challenges, technical skill tests)
46%

Training courses completed

45%

Workers self-reporting their skills and/or proficiency levels

42%

AI inferring skills by analyzing workers' daily behaviors and performance in the flow of work
26%

Auto-populating skills from web portals such as LinkedIn

24%

AI inferring skills from the worker's current job

22%

Source: Deloitte Skills-Based Organization Survey, May–June 2022.

2EVWDFOHV F DOOH JHV D G
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2 7 7 12/2 R H DEOH KH manage talent, work, and be a worker. When asked
transformation to a skills-based organization R DPH KH RS KUHH EDUULHU R UD IRUPL J L R
L KHUH RU T LFNO FD FKL J S , L a skills-based organization, business and HR
organizations that are lagging behind, hindered by H HF L H FL H HFK RORJ OD IDU KH ELJJH
H UH FKH PL H DER ZKD L PHD R barrier? Legacy mindsets and practices ( gure 7).

FIGURE 7

Obstacles to skills-based models cited by business and HR executives

“What are the top three barriers you observe in transforming into a skills-based organization?”

Legacy mindsets and practices

46%

Difficulty keeping up with changing skills needed by the business

32%

Compensation practices restricting us from rewarding people for the skills they possess or develop
32%

Inability to move skills to business priorities

29%

Complexity and difficulty of managing skills-based practices

28%

Lack of common definition or taxonomy of skills

26%

Insufficient skills data

20%

Inability to evaluate performance based on skills

20%

Recruiters or hiring managers not knowing how to source or evaluate skills

18%

Lack of effective skills-related technology

18%

Source: Deloitte Skills-Based Organization Survey, May–June 2022.

Deloitte Insights | [Link]/insights
 KL L R D HD FKDOOH JH R R HUFRPH D With a consistent framework for varied types of
skills-based organizations mature, they will work arrangements put in place, organizations can
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di erent types of work di cult to control, scale, or manage consistently
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fairness and equity
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organizing construct for work, and there is far
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from person to person. Many organizations may organizations will be in danger if they focus solely
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workers in traditional narrowly de ned jobs, OHDU L J D H HORSPH D JOREDO IRR FRPSD
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when one worker receives an altogether di�erent
H SHULH FH KD D R KHU We see the shift to a skills-based organization as
the rst step of an evolutionary journey to making
, IRF L J R KHLU ZRUNHU H SHULH FH HFL LR ED H R L L L DO UD KHU KD MRE
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the same, di�erences may be ignored. But when ZL K D DUUD RI NLOO L HUH SD LR
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practices—then di�erences are recognized, would nd valuable in matching workers to work).
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viewed as the humans they truly are. With this Digital agency Forum One is one organization
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FIGURE 8

Workers and executives want a variety of data on, and beyond, skills to make
decisions on work and workforce
DEMONSTRATED SKILLS AND CAPABILITIES INTERESTS AND PASSIONS

79% 59%
OF WORKERS OF WORKERS
are completely open to having are completely open to having
this data collected on them; 14% this data collected on them; 27%
say it depends say it depends

60% 35%
OF WORKERS OF WORKERS
want this as a criteria to match want this as a criteria to match
them to work them to work

50% 24%
OF EXECUTIVES OF EXECUTIVES
say this data would be very say this data would be very
valuable, and 34% say it would valuable, and 53% say it would
be somewhat valuable be somewhat valuable

TEAMING AND COLLABORATION STYLE LOCATION, SCHEDULE, AND FLEXIBILITY

AND PREFERENCES PREFERENCES

70% 70%
OF WORKERS OF WORKERS
are completely open to having are completely open to having
this data collected on them; 22% this data collected on them; 20%
say it depends say it depends

38% 40%
OF WORKERS OF WORKERS
want this as a criteria to match want this as a criteria to match
them to work them to work

50% 53%
OF EXECUTIVES OF EXECUTIVES
say this data would be very say this data would be very
valuable, and 45% say it would valuable, and 42% say it would
be somewhat valuable be somewhat valuable

Source: Deloitte Skills-Based Organization Survey, May–June 2022.

Deloitte Insights | [Link]/insights
 R L O RI DD L J , R SD L HO PL H ZRUNHU D D D
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negatively, with 53% percent of workers and 44%
When sophisticated technologies such as AI collect RI E L H D 5 H HF L H LHZL J KH H D D
PRUH D PRUH D D R ZRUNHU R R O R NLOO positive development, compared with only 20% of
but also other dimensions, do workers nd it workers and 28% of executives viewing them
intrusive? Not necessarily: Our research suggests D HJD L H
that workers embrace organizations using new
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ZD R R R R O LI KHLU HPSOR HU FOHDUO HOO
For example, 79% of workers are completely open KHP KRZ KHLU D D L FROOHF H D H D KH
to their organizations collecting data on their bene ts that will ensue: new opportunities for
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as 70% are open to data collected on their W W PHUL RFUD LF KLUL J SD RU SURPR LR HFL LR
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FIGURE 9

Workers are willing to share their data if they get benefits in exchange
“What would make you more open to letting your employer collect your data?” *

My employer would clearly tell me how my data is collected, used, and the benefits that will be achieved
50%

My data would open new opportunities for my growth and development, but it wouldn’t influence hiring,
deployment, performance assessment, pay, or promotions
44%

My employer would use only data that is objective and verified to inform hiring, pay, or promotion
decisions, with the intent of making them fairer and more meritocratic
43%

New work opportunities such as roles, assignments, teams, or projects would be suggested to me based
on my data
41%

I would have control about what data is shared and with whom
41%

I could validate and correct my data as needed

39%

I could have more customized work experiences based on my data

31%

* Asked of workers who said "it depends" when asked if they would be open to having their employer capture
data on them.
Source: Deloitte Skills-Based Organization Survey, May–June 2022.
Deloitte Insights | [Link]/insights
 D L LOO D D RU D O What could help is combining a common language
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boundary of the organization
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better rewarded. Sixty-one percent of workers and EH H HORSH
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1 28 3 1 working with organizations enabled the organization to start on transforming

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one of three di�erent approaches. ultimate goal of creating more personalized
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practice and transform it R EH ED H PRUH R HPD E KRU SSO SR ZKLFK R IRF L
NLOO D OH R MRE D KH FR L H R HL KHU e�orts. Ultimately, the organization hopes to
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that they have to create a skills “hub” before OLIH F FOH L KH I UH IURP DOH R UFL J R
realizing the transformation. FRPSH D LR

For example, Cargill started by transforming KH KLU DUFKH SDO MR U H L R start

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As it proceeded to also adopt skills-based hiring
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had core skills hub work to do to realize the vision; broadening the job: doing away with highly
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“skills hub” before expanding out to skills-based the organization to e�ectively build a skills-based
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developing a skills-based talent philosophy. skills, nd a future role, and create a development
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One life sciences organization focused on designing FRPSD RZ KD D FDUHHU D H PH PD FKL J
a skills-based organizational philosophy and value and development system—which the organization
proposition, and then developed a skill-mapping EHOLH H KD L FUHD H HPSOR HH H JDJHPH D
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and pro ciency levels to learning objects. This

Whatever the archetypal journey chosen, the applying their skills to di�erent areas
following practices can help organizations: within Cargill

Think evolution, not revolution

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thought of as a long-lasting evolution, not a of paying contractors or o�-
revolution. Few organizations will be willing to balance-sheet talent
DED R MRE D KLHUDUFKLH H LUHO
KHUH PLJK EH FHU DL SR L R U Better utilize the workforce by unlocking
organization where doing so, either fully or DSSH FDSDFL
partially, will yield signi cant bene ts. Consider
Find your pain point or lowest-hanging
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fruit. When starting with a skills-based
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the biggest, based on your organization’s
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speci c needs and pain points. Many
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organizations, for example, are now
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emphasizing the value of skills, not just degrees
Most organizations start small and build out
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reorganizing work beyond the job.
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Always lead with the why. Explains Cargill’s D H HORSPH RU DOH DFT L L LR RU KD
Julie Dervin, “Start by de ning the why, which FD H PD UH HFK RORJLH HD LO D DLODEOH D
L R U DO H SURSR L LR D R UE L H SJUD H R H L L J 5 L IRUPD LR HP
FD H R SSRU KL P O L HDU MR U H , FK D DOH PDUNH SODFH
L RO H D OR RI FKD JH D D HU HPLF OH HO
L SHRSOH SURFH H D KH ZD KL J DUH For most organizations, the notion of the job won’t
done.” For Cargill, this “why” included the JR DZD H LUHO , HD RI EHL J KH ZD R
ability to: organize work and make decisions about workers,
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Create greater speed and agility, including OHD HU KH RS LR R H D DULH RI DSSURDFKH
SHH R PDUNH By moving to a skills-based approach, leading
organizations can pivot from a traditional model
H HU UH SR RF RPHU ZL K KH ULJK aimed at scalable e ciency that grew out of our
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HH KHP ZRUO L ZKLFK SHH DJLOL D L R D LR U OH
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3UR L H PRUH RSSRU L LH IRU ZRUNHU R FKRLFH JURZ K D D R RP D ZRUN
JURZ KUR JK LT H FDUHHU H SHULH FH E
 G RH

Therese Raft, “8 LOHYHU LV WXU L J WKH ZRUN ZHHN WRZDUGV VNLOOV EXLOGL J,” Financial Review SULO

Susan Cantrell, “Beyond the job,” S D J - QD 6XPPHU HSUL WHG L HORLWWH VLJKWV
2FWREHU

Gloat, “How Unilever upskilled for the future,” accessed June 25, 2022; Leena Nair et al., “Use purpose to
transform your workplace,” Harvard Business Review, March-April 2022; Avivah Wittenberg-Cox, “Flexibility for
all: Unilever’s vision for the future of work,” 0D

Aman Kidwai, “Inside Unilever’s program that allows employees to try out new jobs and gig working
RSSRUWX LWLHV DW WKH FRPSD ,” Business Insider, May 5, 2021.

5. 7KH VXUYH V ZHUH FR GXFWHG L WKH VSUL J D G VXPPHU RI DFURVV D UD JH RI L GXVWULHV D G L

FRX WULHV XVWUDOLD UD LO D DGD HUPD GLD -DSD 6L JDSRUH 6RXWK IULFD WKH 8 LWHG .L JGRP D G
WKH 8 LWHG 6WDWHV

Indeed, “:D W WR KLUH EHWWHU DPLG WKH UHDW HDOL DWLR RFXV R VNLOOV,” The workplace report, Wall Street
- QD -XO

Ravin Jesuthasan, Tracey Malcolm, and Susan Cantrell, “How rapidly changing market conditions are rede�ning
jobs,” Harvard Business Review, April 22, 2020; James Asquith, “Grounded ight attendants are being redeployed
WR KRVSLWDOV L FRUR DYLUXV EDWWOH,” 0DUFK

DYL -HVXWKDVD D G -RK : RXGUHDX Work Without Jobs: How to Reboot Your Organization’s Work Operating
P (Cambridge, MA: MIT Press, 2022).

Cantrell, “Beyond the job.”

O ce of the Under Secretary of Defense for Acquisition and Sustainment (A&S), “3XEOLF 3ULYDWH 7DOH W
FKD JH,” accessed July 28, 2022.

Cantrell, “Beyond the job.”

LOOLD 7HWW The Silo E ect: The Peril of Expertise and the Promise of Breaking Down Barriers (New York: Simon &
Schuster, 2015); Toby Cosgrove, The Cleveland Clinic Way: Lessons in Excellence from One of the World’s Leading
Health Care Organizations (New York: McGraw Hill, 2014)

6XVD 0 D WUHOO D G DYLG 6PLWK Workforce of One: Revolutionizing Talent Management through Customization
(Boston, MA: Harvard Business Press, 2010).

HORLWWH D DO VLV RI WKH 6NLOOV DVHG 2UJD L DWLR 6XUYH UHVXOWV

15. RPSD L WHUYLHZ ZLWK HORLWWH DXWKRU 1RYHPEHU

ELG

Nair et al., “8VH SXUSRVH WR WUD VIRUP RXU ZRUNSODFH.”

Jorge Mazal, “Flat and uid: How companies without hierarchy manage themselves,” Medium
HEUXDU

Nicole Lewis, “ 0 WUD VIRUPV LWV DSSURDFK WR KXPD UHVRXUFHV ZLWK ,” SHRM, May 21, 2019.

Google, “ RRJOHU HYLHZV D G HYHORSPH W,” accessed July 28, 2022.

 IBM, “ XLOGL J D ZL L J WHDP XVL J ,” March 16, 2018.

:RUN SHUIRUPHG DW D XWFK FRPPX LFDWLR V FRPSD E HORLWWH

Deloitte, “7KH skills-based organization,” Capital H Podcast with guests John Boudreau and Julie Dervin and
hosts Michael Gri ths and David Mallon, December 2021.

Forum One, “How we’re furthering our DEI e orts through a skills matrix,” October 29, 2020.

25. Christina Curnow et al., “Measuring skills at work: Lessons from the �eld,” American Institutes for Research
(AIR), June 2021.

Christopher Mims, “Google’s ‘20% time,’ which brought you Gmail and AdSense, is now as good as dead,”
D XJXVW

Deloitte, “The skills-based organization,” Capital H Podcast with guests John Boudreau and Julie Dervin.

:RUN SHUIRUPHG DW D JOREDO OLIH VFLH FHV RUJD L DWLR E HORLWWH

Deloitte, “ URP L WHUHVWL J WR LUUHVLVWLEOH DLVL J WKH EDU R WKH HPSOR HH H SHULH FH,” Capital H Podcast with
guests Craig Mundy, Ina Gantcheva, and Je Mike and host Bradd Craver, February 2019; Josh Bersin, “7KH
future of work: Lessons in job architecture and career management,” [Link], February 9, 2020.

Deloitte, “The skills-based organization,” Capital H Podcast with guests John Boudreau and Julie Dervin.

Lucas Mearian, “No degree? No problem. Tech �rms move away from college requirement for new hires,”
PS 0D

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Michael Gri ths | mgri ths@[Link]

Michael Gri ths is a senior partner in Deloitte’s Workforce Transformation practice; speci�cally leading
Deloitte’s Workforce Development market o erings. With a global team, these o erings drive the
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report. Gri ths is well published in the �eld of learning and talent, and is the leading market voice on
EHFRPL J D VNLOOV EDVHG RUJD L DWLR

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VRFLHWDO FKD JHV DUH LPSDFWL J WKH ZRUN ZRUNIRUFH D G ZRUNSODFH

- OLH LLSDNND M LLSDNND GHORLWWH FRP

Julie Hiipakka is a leader in our workforce transformation o ering focused on skills-based

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skills-based talent practices, she led the Learning & Leadership research practice for Deloitte
Consulting’s Human Capital Research and Sensing o ering. She advises clients on learning, workforce
architecture, enabling worker and leader performance in the ow of work. A change agent, thought
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including as a learning leader in a professional services �rm.
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Our insights can help you take advantage of change. If you’re looking for fresh ideas to address your
challenges, we should talk.

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Michael Gri ths
Learning & Leadership US practice leader
3UL FLSDO HORLWWH R VXOWL J //3
+1 203 423 4769 | mgri ths@[Link]

Michael Gri ths leads Deloitte Consulting LLP’s Learning Consulting practice in North America.

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86 :RUNIRUFH 7UD VIRUPDWLR OHDGHU
3UL FLSDO HORLWWH R VXOWL J //3
+1 212 313 1706 | robijones@[Link]

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D G VHUYHV R WKH 2 V 0DUNHWSODFH /HDGHUVKLS WHDP L HORLWWH R VXOWL J

DF LFH OHDGH KLS

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OREDO SUDFWLFH OHDGHU XPD DSLWDO SDUW HU HORLWWH R VXOWL J //3
+1 678 852 5672 | amazor@[Link]

UW 0D RU LV HORLWWH V OREDO XPD DSLWDO SUDFWLFH OHDGHU OHDGL J WKH OREDO XPD DSLWDO
Executive team, and a member of the Global Consulting O erings and Assets Leadership team. Mazor
is accountable for guiding the �rm’s continued innovation and capability growth to drive unique and
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FDSLWDO FR VXOWD F

Steve Hat�eld
3UL FLSDO L R VXOWL J HORLWWH R VXOWL J XPD DSLWDO L D FLDO 6HUYLFHV HORLWWH R VXOWL J //3
+1 917 439 8845 | sthat�eld@[Link]

Steve Hat�eld is the Global Future of Work leader for Deloitte Consulting, and is a principal in the
Workforce Transformation o ering. He has more than 20 years of experience advising global
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3 LOLSSH % JH
3DUW HU L R VXOWL J :RUNIRUFH 7UD VIRUPDWLR HORLWWH R VHLO
phburger@[Link]

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SDUW HU ZLWK D GHPR VWUDWHG KLVWRU RI ZRUNL J L FRPSOH H YLUR PH WV ZLWK VWUR J
H WUHSUH HXUVKLS H LV DOVR VNLOOHG L FR VXOWL J L FH WLYHV GLJLWDOL DWLR ZRUN WUD VIRUPDWLR
D G RUJD L DWLR DO WUD VIRUPDWLR
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Partner in Consulting | Human Capital, Technology, Media and Telecom | Deloitte Consulting & Advisory
+32 496 556 793 | fvantornout@[Link]

Frederiek Van Tornout joined Deloitte in 2014, after his company Vision was acquired by Deloitte
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within Deloitte. At Deloitte Belgium, this resulted in a role as Workforce Transformation o ering leader.
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H DEOHG OHDU L J

1LF 6FREOH :LOOLDPV

3DUW HU L R VXOWL J XPD DSLWDO HORLWWH 7RKPDWVX R VXOWL J
+80 4836 0107 | nscoble-williams@[Link]

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D G RUFKHVWUDWH WKH FROOHFWLYH DFWLR UHTXLUHG WR FKDOOH JH WKH VWDWXV TXR D G GULYH WUD VIRUPDWLR DO
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6 LYD L 0DLW D
3DUW HU L R VXOWL J XPD DSLWDO /LIH 6FLH FHV D G HDOWK DUH HORLWWH 0 6 /LPLWHG
+44 77 4745 6796 | shmaitra@[Link]

Shivani Maitra is a partner in Deloitte Consulting’s London o ce, where she leads the private sector
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FRPH D G DVVRFLDWH SDUW HU L R VXOWL J XPD DSLWDO RYHU PH W D G 3XEOLF 6HUYLFHV
+1 613 219 5390 | stharrington@[Link]

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OHDGHU IRU :RUNIRUFH 6WUDWHJ D G XWXUH RI :RUN GYLVRU ZLWK HDUV RI H SHULH FH OHDGL J
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Work space, which dates back to his �rst publication in 2011, is driven by a focus on “new ways of
working,” adapting culture to the “new normal,” and future skills analytics.

D 1R V DG
3DUW HU L R VXOWL J XPD DSLWDO HUJ HVRXUFHV D G GXVWULDOV
+43 664 805 372 525 | anowshad@[Link]

Anna Nowshad leads projects in the �eld of workforce transformation, talent strategies, career
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international environments. Nowshad also leads the Austrian Organization Transformation & Talent team.
5DPR D 5R J D
Partner or principal (PRT) in Consulting | Human Capital (Service) | Consumer
+86 21 2316 6088 | ramonayan@[Link]

Ramona Rong Yan has more than 20 years’ experience in organizational e ectiveness and human
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across the �nancial, real estate, manufacturing, consumer, retailing, education, and pension industries
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HDWLYH Jim Slatton, Molly Woodworth, Natalie Pfa , and Swagata Samanta
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