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Skills-based talent management isn’t a new concept. For decades, companies have identified the skills required for their jobs, then hired people with those skills and developed that skillset once employees were on board. Marketing skills for marketing professionals. Software development skills for software engineers. Electrical skills for electricians.

What’s different now – and the reason that skills-based talent management is experiencing a bit of a renaissance – is that technology advancements are supporting a paradigm shift that is turning talent management on its head. It’s an integrated, skills-first lens for viewing and managing recruitment, workforce development, performance, employee engagement, retention, and career paths. What is skills-based talent management today? Why is it important for your organization?

What is skills-based talent management?

Skills-based talent management puts skills first. It focuses on what an individual can do, rather than the employee’s job or role in the company. That may seem like  a nuance. But it’s a significant change.

Skills-based talent management doesn’t say that a Communications Director needs to have strong communications skills. It says that strong communication skills are important for communications professionals, customer service representatives, delivery drivers, project and program managers, leaders at all levels of the company, and many more jobs or roles. Which means someone with strong communication skills can do meaningful work in many places across the organization; not just in the position they happen to have today.

Here’s what leading with skills looks like

Leading with skills gives employees – and employers – choices about where to apply and build those skills. With a skills-based talent management approach, a company and its workforce focus on desired skills, mapping them to a broad range of needs and opportunities across the organization.

  • Business Strategy: As executives assess the company’s place in the market today, as well as potential challenges and opportunities, they identify the skills their leaders and workforce need for the organization to thrive. Functional skills required to do the jobs will still be important, but “soft skills” and competencies such as coaching and mentoring, an ability to deal with (or lead) change, and learning agility may be emphasized. Leaders recognize that a shift to a skills-based talent management approach is not an HR concern; it’s a whole-company initiative.
  • Skills Assessments: As skills become a central language across the organization, skills assessments become the “go-to” tool to measure progress. Management routinely adds or emphasizes skills that the company needs. Individual contributors and managers routinely take skills assessments to gauge and document their skills and competencies to track their progress. Managers routinely pull data from the company’s competency management system to examine skills across individuals and groups, see how well groups are performing, and discover which individuals could step in to fill a gap or grow into a new role. And managers and leaders pull reports and data to evaluate what’s working – and what’s not – in the leaders’ shift to be less directive and more coaching and consultative in how they manage their people.
  • Recruiting: While recruitment outcomes are still tied to hiring an individual to fill a named job role, the job descriptions and recruitment process lead with skills. Experience and education are secondary. A focus on skills broadens the talent pool to non-traditional employees who may not have a college degree, who may be entering the workforce from the military, or returning to work after years of caring for children or other family members. Increasingly, organizations are looking, first, to internal candidates – even if their current role is not directly related to the open position.
  • Workforce Development: Rather than a “top down” push for employees to learn new skills required to do their jobs well, workforce development in a skills-based organization is more collaborative. Employees, managers, and leaders across the organization have awareness of their own skills, those of their teams, and the skills needed for jobs, roles, and projects across the company. Together, managers and employees identify skills that the employee is drawn to that the company needs. They identify learning and development experiences designed to help build desired skills. They look for new roles or positions in the company where the employee could contribute in a meaningful way – whether it’s in a current role or a new one elsewhere in the company.

Advantages of skills-based learning and performance management

A skills-based approach to talent management, to learning and performance management, is a win-win for employers and employees. It makes work better for employees – and employees and managers better at work.

Skills-based learning and performance management gives employees:

  • Increased career mobility: Employees know which skills are needed for a broad range of roles across the company. By pursuing skills-based learning and development opportunities that align with desired roles, employees have more control over their careers – within and across companies.
  • Recognition for contributions, not background: Global professional services firm Deloitte points out that, in a skills-based organization, “workers are valued and rewarded for their skills and how they apply them to create organizational value rather than for their title, level, or educational degree.”
  • A future-proofed career: By constantly developing skills that are needed in the workplace and exploring new projects and roles, employees are keeping all the doors wide open for future career paths and opportunities – including some that may not even be envisioned today.

Skills-based talent management unlocks workforce potential for organizations, with:

  • Increased organizational agility: With clear visibility into the skills and competencies of their workforce – and an understanding of the skills the company needs – leaders can unlock workforce capacity, broaden, the available pool of talent, and redeploy skills to meet changing business needs.
  • Greater Employee Engagement: When employees have more control over their jobs and careers, they are more engaged at work. The company experiences reduced turnover, higher productivity, and overall higher retention.
  • Improved organizational alignment: Because the company’s strategic goals are explicitly tied to workforce and management skills, the whole organization becomes aligned on the skills that are needed and valued for the organization to succeed.
  • A future-proofed workforce: By closing skills gaps in the workforce and creating a culture of skill development aligned with the company goals, companies enjoy a future-proofed workforce that will know how to adapt with changing trends, needs, and priorities.

Asset management firm Mercer warns that, “Organizations that cannot connect skills to work are at risk of being outpaced by those that can more rapidly deploy mission-critical talent.” The reverse, as we see, is also true – companies that integrate skills with work will more rapidly deploy their mission-critical talent. And that end result is good for all.


Are you ready to shift to skills-based talent management? Download Competency Management Toolkit for some tips to get you started. Or contact us to find out how our team and Avilar’s WebMentor Skills™ can support your transformation.



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Understanding Durable vs. Perishable Skills and How to Balance Them
Why You Should Boost Soft Skills in Your Organization
What is a Skills Assessment and Why is It Important?
How Can Competency Management Help With Hiring Internal Candidates?