Several years ago, cloud HCM vendor Workday began investing in building up an ontology of skills — classifying all of the various competencies that individuals bring to their work, whether that be specific expertise such as knowledge of a programming language or an accounting standard, experience of specific types of work, or 'soft skills' such as empathy, creativity or networking. Last week, the company revealed that nearly a thousand organizations are now using this Skills Cloud to manage talent, and introduced a new packaged solution to help speed adoption of the various components. It also expanded on its strategy for skills in a blog post. Enterprises can become more agile by using this more granular information about skills, as Chris Ernst, Chief Learning Officer at Workday, explains:
It's really about dynamically matching people to opportunities and, we think, skills in particular, that's the doorway to greater agility — both for workers and for business.
So it's a win-win, when you really put the focus on the skills needed to get the job done across the organization.
Agility and gig placements
While the pandemic has ramped up the urgency of achieving greater agility, it was almost two years ago that Workday first launched its Talent Marketplace, based on the Skills Cloud technology. Its focus was on helping individuals to find internal assignments, particularly for specific projects or 'gigs' that they might do either in parallel with their usual duties, or as a short-term placement. A companion Career Hub allows them to review their interests and plan their own development. The idea is for people to be able to acquire new skills that build towards their career objectives, while helping team leaders and managers fill talent gaps without having to hire externally. Judged on those criteria, Talent Marketplace has been a success in Workday's own experience. Ernst says:
We've done over 500 gigs now and 95% of the gig participants said that they were able to build on existing skills or build new skills through a gig. And 96% of the gig hosts who needed to get a job done said that they were able to get better results.
So you've got a better outcome for the business, you've got 95% of employees saying they're able to grow new skills. And then the last piece is that 76% of those gig participants said that by participating in the gig, it increases their likelihood of staying with Workday.
Across the 1,000-strong customer base now using the Skills Cloud, there are now around 55,000 separate skills definitions and no less than two billion instances where they've been verified for a specific individual. Organizations can also use analytics to evaluate where they have skills gaps or find skills they were previously unaware of, helping them respond more effectively to business needs and provide relevant skills development to their workforce. This is a move away from the old role-centric approach to talent management, where the mapping of skills was far more compartmentalized. This led to increased churn in the workforce as people were recruited or let go based on the default skills profile of their role, rather than matching actual requirements and competencies. Ernst explains:
What we're really doing is looking to connect people to opportunities, and in a much more inclusive and agile, flexible way, to be able to get work done. Since the industrial era, we've really had one primary way of doing that, which is individuals in defined roles — boxes in the organizational chart. When conditions change, which they constantly do, the instinctive response is to reorganize the lines in the boxes — let people go, hire new people with the skills for the role. And what we're saying is that our vision is to start, not with the lines in the boxes, but by asking and getting clear, what are the skills actually needed to get the job done?
Transparency and diversity
The key to making this work is providing more transparency. Employees can see what opportunities are open to them or where they need to add new skills to make an impact and grow their career. Employers have more insight into the skills landscape across the organization and the wider environment. David Somers, Workday’s Group General Manager for the Office of the CHRO, explains:
The transparency piece is, I think, one of the most key components of what the technology enables ...
On the side of the organization, based on what's happening in our business, based on maybe even what's happening outside of our business, what skills should we be building or acquiring for our organization? We need to know that. What skills do we actually already have? And where do those reside?
On the flip side, for you as the worker, understanding where [are] those needs and demands for net new skills. [In the past] you really, as an employee, had no way of understanding, OK, where's my company going? And where should I be building my toolset of skills? — to make me more valuable, more in demand, [and] get to where I want to go with my career.
Moving away from role-based criteria to more of a skills-based approach also has the welcome side-effect of paving the way to more diverse employment, by supporting recruitment of workers who have acquired skills through routes other than traditional four-year college degrees. Somers says:
A four-year college degree has been a proxy. It worked OK, for a period of time, but now we've got the capability where we don't really need that proxy anymore. At the end of the day, we can go down further at a granular level, and really say what skills are necessary for a particular job? And do you have those skills or not?
Ernst cites a recent estimate that around three-quarters of new jobs advertised in the US stipulate a four-year college degree — a requirement that instantly eliminates from the running three-quarters of blacks and more than four in every five Latinos. He elaborates:
A skills-based approach is really about opening up new pathways to opportunities. So questions like, 'Where did you go to school?' become less important. What job titles you have become less important. Skill questions like, 'How have you demonstrated that skill in your work?' become primary.
At all levels [it's] the right thing to do from a business imperative and talent scarcity model. We have to put more focus on the skills that you bring to the organization, versus the credentials or career pathways that you've had in the past, no doubt about it.
I've been fascinated by the work Workday has been doing on Skills Cloud right from the beginning, because I believe it's at the nexus of several converging trends — individuals wanting more control and agency in their own skills development, organizations wanting more flexibility in how they develop and deploy talent, the rise of gig and contingent work (see Martin Banks' piece this morning for a thought-provoking take on this), the switch towards continuous learning throughout a career and away from fixed qualifications, the drive for a more diverse workforce, and the rise of hybrid, digitally connected working, among others.
It's still very early days therefore. For now, Workday has focused on applications within an organization rather than across enterprise boundaries — understandable when its customers are already concerned about the war for talent and don't want their workforces getting any more porous than they already are. But further in the future, you can imagine taking the Talent Marketplace and opening it up more broadly to include alumni who now work elsewhere, even to encourage placements with other employers. Here's what Ernst told me when I asked his views on this:
I see a day where businesses run on just massive global, boundary-less skills marketplaces, where you've got just a free-flowing exchange of people interacting with smart machines, both inside and outside the walls of your formal organization — and increasing value for workers and innovation in companies.
We're all right now trying to take some of the ideas of the gig economy and through [today's] technology applying it within the walls of Workday. But the longer game here, I think, is a skills ecosystem that transcends business and cultures and contexts.
It'll be fascinating to watch where this all leads.