Our 2022 Global Talent Trends Study brings together the voices of C-suite executives, HR leaders, and employees from Australia and around the world and reveals what’s keeping them up at night as well as their hopes for the future. Their stories point to the need for a more Relatable Organisation, one that challenges legacy notions of value-creation and redefines its contribution to society. Uncover how organisations are taking advantage of the opportunity to redesign work, working and the workplace.

The pandemic supercharged companies’ race to reskill, but has the investment paid off? On average, organisations around the world invested more than US$2,800 per learner in reskilling last year, up from US$1,400 in 2020. Despite 91% of employees saying they learned a new skill recently, 98% of companies still report significant skill gaps. In many cases, the rush to reskilling during the pandemic became divorced from the organisation’s future strategy and fell short because jobs could not be filled internally.

 

But post-pandemic, re-skilling will be characterised by more ambitious attempts to move to a skills-based organisation and truly make skills the currency of the labour market. The imperative is to build a vibrant and resilient talent ecosystem that can meet the company’s skill needs. This means aligning skill-building with the work to create a renewable approach to the future supply of skilled talent. Bringing greater information and transparency about which skills are most needed and most valued, can also help employees make development decisions to ensure their own employability.

The top four strategies that have been most successful in closing skill gaps, according to HR leaders, are all related to internal skill building, with buying skills further down the list (see figure 1). This is a significant shift from pre-pandemic, when 60% of HR leaders named “acquiring talent” as the preferred choice to close the gap.

Figure 1: Which strategies do HR leaders believe are most impactful in closing skills gaps?

Which strategies do HR leaders believe are most impactful in closing skills gaps?

Stay ahead with a circular talent economy

 

There is an increased expectation that employers play a leading role in helping people remain employable and investments in learning will never be lost. This requires organisations to embrace the concept of a circular talent economy, one where skill development is continuous and talent is perpetually redeployed in step with new opportunities and an evolving tech/human workplace. To truly deliver on this vision will require companies to think broader than L&D and appreciate that skills—whether bought, borrowed or built from within—are the bedrock of robust future-of-work plans.

 

The imperative this year is to shift the focus from upskilling/reskilling to approaching the entire employee lifecycle—from hiring to exiting—with a skills lens. This approach requires companies to answer a few questions:

 

  • How can we hire people with different skillsets?
  • Can we be less risk adverse and hire for adjacent skills and experiences, not a role match?
  • How can we train employees to do the work and tasks we need?
  • How can we redeploy existing talent?
  • How might we reward for skill growth?
  • How can we future proof their careers?
  • How can we enable the circular talent economy by sharing and utilising talent in new ways that keep more people in the workforce for longer?

Organisations attuned to new ways of working are rethinking site selection and tapping into non-traditional candidate pools (a top priority for 31% of organisations this year) by reconsidering requirements often used as a proxy for skills, such as experience and educational prerequisites. These organisations are removing barriers to internal mobility such as time-in-role requirements (42% plan to enable employees to move up a grade/level at any time), and investing in technology to facilitate mentorships and match roles/projects with “hidden” talent. They are committing to paying for skills that align to the company’s growth strategy, so employees do not get disillusioned when their upskilling efforts do not lead to pay or promotion (one in five employees remains unconvinced that reskilling will increase their chances of promotion).

 

Enabling talent moves both internally and externally is part of a company’s continuous commitment to upskill not just its employees, but the workforces of the nations in which it operates. An example is IBM, which in October 2021 committed to providing 30 million people of all ages with new skills needed for the jobs of tomorrow. To achieve this goal by 2030, they set out a clear roadmap with more than 170 new academic and industry partnerships. Only when skills have truly become the currency of work will it be possible to deliver on a circular talent economy and secure employability for all.

 

As skills become the currency of work, it’s critical to rethink how work gets done and creating visibility to the skills and skills in the organisation. Focusing on skills to meet both current and future talent needs will ensure people are, and remain, employable. Skills-based models are enabling companies to keep track of skills, facilitate more agility, and adaptive working practices to tap into more diverse talent pools—already a priority for one in three organisations.

 

Five steps to transition to a skills-based organisation:

 

1.     Audit your readiness to become a skills-based organisation.

What are the most pressing use cases for using skills in your organisation—hiring, retention, development, internal mobility, succession, sharing talent?
Ask:
Do we have skills linked to jobs? Do we know what skills are growing in importance? What skills are getting more expensive to buy? How easy is it for talent to move and for departments to share talent? Do we know the make-up of our workforce at the touch of the button?

 

2.     Know your skills advantage.

Consider which skills are part of your company’s unique value proposition and must be kept in-house, versus which can be borrowed. Target critical skills for acquisition, development and rewards.
Ask: do we know our competitive advantage skills versus everyday skills? And how close are we to filling those gaps?

 

3.     Help managers know the skills they have on their team.

Ask employees to share their profiles and complete self-assessments to understand current skillsets especially on trending skills but most importantly, against skills that matter for your organisation. Consider portable certifications, micro credentials and assessments such as Mercer Mettl that audit and build technical and digital skills remotely.
Ask: how do we know our skill profile at organisational level, team and individual level?

 

4.     Understand the skills-work gap.

Work with leaders to ensure their plans for the future are detailed enough to map skills and evaluate where gaps are most easily and impactfully addressed.
Ask: do we have a strategy in place to address skill gaps, forecast skills needed and utilise adjacent skills and career plans to plan for the future?

 

5.     Enable employees to develop.

Make skill development an expectation of work and formalise time for learning. Address barriers for mid-career moves. Remove or reduce barriers so that learning is part of everyday work life.
Ask: how easy is it for our people to learn in the flow of work?

 

Learn how to build a skills-powered organisation.

Mercer's Global Leader for Transformation Services and bestselling author, Ravin Jesuthasan, shares insights to help you unlock your workforce's potential. Watch now.

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