Organisations are increasingly moving away from traditional ways of defining work, such as job titles and hierarchy, and instead focusing on what people can actually do – their skills 

CREDIT: This is an edited version of an article that originally appeared in Deloitte 

According to a 2024 Workday survey of 2,300 business leaders, 55% have already begun transitioning to a skills-based talent model, with a further 23% planning to do so within the next 12 months. Despite this momentum, recent Deloitte research suggests that many organisations are still struggling to translate skills-based strategies into meaningful, measurable outcomes. While the direction of travel is clear, the challenge lies in execution. 

Four Core Outcomes Driving Skills-Based Strategies 

At its core, a skills-based approach is designed to better align people with work by focusing on capability rather than role labels. Organisations typically pursue one or more of four main outcomes: becoming an employer of choice, improving productivity and efficiency, increasing organisational agility, or driving innovation and growth. 

For many, the first priority is attraction and retention. In this model, organisations aim to become places where people actively choose to join and stay, supported by a more engaging and flexible workforce experience. Opportunities are made more visible and accessible, often using technology such as artificial intelligence to match individuals to projects, roles, learning pathways and development opportunities. Interestingly, organisations on this path tend to place less emphasis on highly detailed skills taxonomies or complex inference systems, and instead focus more on trust, participation and engagement. 

Productivity, Efficiency and Better Use of Talent 

Another common focus is productivity and efficiency. Here, the emphasis is on matching skills more effectively to demand, ensuring people are working on tasks that make the best use of their capabilities. This can help address long-standing workforce planning issues, such as overstaffing in some areas and shortages in others. It can also reduce costs associated with recruitment, training and turnover by improving how talent is deployed. 

A key shift in this approach is moving away from headcount-based planning towards skills-based planning. Rather than simply forecasting how many people are needed, organisations are increasingly looking at which skills are required, and where they are needed. 

Skills, Agility and the Challenge of Transformation 

For organisations focused on innovation and growth, the priority is ensuring they have access to the right skills to deliver strategic change. However, this is also where many organisations encounter difficulty. To address this, the most effective organisations are investing in skills-based workforce planning, supported by clearer mapping between skills and roles. This enables a shift from reactive hiring to more strategic capability planning, helping anticipate future needs rather than simply respond to immediate gaps. 

Skills Only Create Value When Applied Meaningfully 

Across all approaches – whether the focus is retention, productivity, agility, or growth – the underlying principle remains the same.  

Skills in themselves do not create value. They only become meaningful when they are clearly understood, actively applied and intentionally aligned to work.