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The 4 Business Challenges Employee Skill Development Can Solve

April 23, 2021 Learning and Development
Heather Gilmartin Adams
By Heather Gilmartin Adams, Stacia Sherman Garr

If you’re in enterprise learning and development, talent management or strategic workforce planning, you’ve probably been hearing about skills — a lot. But it's not just those corporate functions where skills have become a hot topic. The events of 2020 lit a fire under organizations as a whole to become more agile, responsive and flexible — and employee skills are a primary way to do just that.  

Last fall, we did some research into skills at RedThread Research and asked the question: Why are skills so hot right now?  

Here are some of the answers we received: 

  • There’s massive pressure to get the right people with the right skills in the right roles — fast. 
  • Skills are replacing jobs as the core connection between talent and work. 
  • Skills are a currency to develop people the right way. 
  • Skills are critical for strategic workforce planning.

These responses revealed a key insight: Skills aren’t all that useful by themselves.  

In each bullet point above, skills are coupled with something else. Skills are in service of some other business goal — workforce planning, talent management or development. In other words, knowing what skills your workforce has and what skills they need is merely an interesting intellectual exercise if not coupled with a business challenge that knowledge can help address. 

Our research identified four business challenges (Figure 1) that skills are particularly well suited to help solve: 

  • Employee development: how and what kinds of resources are used to build the skills of the workforce.
  • Career mobility: how employees move around and out of an organization, based on both their preferences and the needs of the business.
  • Diversity, equity, inclusion and belonging (DEIB): how well an organization provides transparent opportunities to all of its employees.
  • Performance management: how organizations determine an employee’s progress and pay. 

How Skills Support Business Objectives
Figure 1: How Skills Can Support 4 Business ObjectivesPHOTO: RedThread Research, 2021

Let’s look at skills in the service of each of these challenges in more detail.  

Employee Development 

Enterprise learning can no longer succeed using the “shotgun” approaches of yesterday — strategies that provide all employees with the same training regardless of whether they need it. Instead, learning and development efforts must be tied to both business strategy and individual employee needs. For example, a 2019 McKinsey study found that the future of enterprise learning depends on the ability to identify and develop the specific employee skills that will support execution of the company’s business strategy.  

This reality means that L&D must know in very targeted ways what employees can do and what they need to be able to do, and then fill in the gaps.  

Skills can help by: 

  • Enabling personalized delivery and curation of the development opportunities an employee needs, when they need them.
  • Empowering employees to locate development opportunities that match organizational needs as well as their individual interests and goals.
  • Allowing learning functions to identify organizational or team-based skills gaps, thus helping leaders understand where to focus development efforts. 

The bottom line: Employee development is becoming more personalized, on demand and in the flow, and information about employee skills is enabling these trends. 

Career Mobility

We recently completed research on career mobility and found it’s no longer about helping employees move up the corporate ladder. Instead, it’s about helping employees find career opportunities that benefit both the employee and the business.  

Matching employees with the right opportunities can be challenging. To make career mobility work, leaders need to know what an employee can do, what they want to do, and where the organization has a need. That’s why many talent marketplaces are built on skills. 

Skills can help career mobility efforts by: 

  • Using technology, such as talent marketplaces built on skills inventories, to identify employee skills and corresponding opportunities.
  • Populating job profiles to help managers and recruiters better match employees with opportunities.
  • Providing a common language for everyone in the organization across functional boundaries to use when describing what people can do.

As organizations increasingly focus on career mobility, skills provide the underlying information that enables movement and opportunities.  

Diversity, Equity, Inclusion and Belonging 

The events of 2020 compelled organizations to pay much more attention to issues of diversity, equity, inclusion and belonging. Companies like Adidas, Estee Lauder, Facebook among others are looking for ways to level the playing field, give employees the widest possible access to opportunities through mobility and development and ensure that all employees feel they belong and are supported. Skills can help. 

Our research showed that skills can: 

  • Mitigate the tendency by some employee populations to underestimate their own abilities.
  • Help identify DEIB-related patterns in employee populations regarding development, performance, mobility and promotions.
  • Help employees and managers identify development and mobility opportunities, regardless of the strength of their personal or professional networks, previous traditional educational degree or other factors.

Skills are demonstrable and learnable and employees don’t necessarily have to go through a degree or certificate program to acquire them. This relative objectivity and the potential to lower traditional educational barriers means that the use of skills can help organizations make their development, performance and other people practices more equitable.  

Performance Management 

Performance management was originally put into place to help companies justify compensation decisions. While that original purpose hasn’t necessarily changed, it has been supplemented. Organizations now see the performance process as a continuous way to mentor and coach, to facilitate ongoing feedback conversations and to develop employees. 

With this new mindset around performance come innovations, many of which involve skills. Skills help by describing what an employee can do and:  

  • Providing transparency for performance criteria, such as paying for skills in compensation decisions.
  • Documenting an employee’s growth via new or advanced skills gained.
  • Helping employees understand specifically what they’re expected to do to perform well in a given role.

Getting Started 

As organizations use skills to meet their needs and goals, alignment with those goals becomes a key consideration. Here are specific questions organizations can ask to better align skills with business challenges: 

  • What are the biggest business challenges you face today? 
  • To what extent do you currently consider skills in solving these challenges? 
  • Of the ideas shared above, which would be most useful in helping to solve your biggest challenges? How might these gaps be filled? 
  • What may be lacking to enable you to use skills in any of these contexts?  
  • What technology do you currently have to support these needs? What new tech (such as a talent marketplace platform) may you need? 


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