The global workforce is undergoing a fundamental transformation, driven by the rapid advancement of artificial intelligence (AI) and the pressing need for skills-based strategies. Workday’s recent report, The Global State of Skills, highlights how global business leaders are increasingly concerned about workforce readiness amid ongoing talent shortages.
As AI reshapes the nature of work, organisations must take proactive steps to ensure their employees are equipped with the skills required for success in this evolving landscape.
The report states that AI is playing a crucial role in mitigating skills shortages and accelerating the transition to a skills-based approach. In fact, 41 per cent of business leaders strongly agree with this.
AI supports organisations in several key ways:
Automation of routine tasks
By automating repetitive processes, AI allows employees to focus on higher-value activities, increasing productivity and job satisfaction.
Data-driven decision-making
AI analyses vast amounts of data to provide insights into workforce trends, enabling informed talent management strategies.
Personalised learning and development
AI-driven learning systems tailor development opportunities to individual employees, making upskilling and reskilling more effective.
Skills mapping and job matching
AI helps create a structured skills taxonomy by analysing job descriptions and resumes, ensuring a better alignment between talent and organisational needs.
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Real-time skills gap analysis
AI enables businesses to identify critical skills shortages, allowing managers to address gaps efficiently.
Enhancing human creativity and innovation
With 83 per cent of business leaders believing AI will elevate human skills, organisations can leverage AI-driven insights to foster innovation and economic value.
Embracing a skills-based strategy
As businesses shift towards a skills-first mindset, several strategic actions can facilitate this transition:
1. Prioritising skills identification
A foundational step is understanding the current skills landscape. Businesses must assess both the existing skill sets of employees (supply) and the skills required for future success (demand). AI can assist by inferring and curating relevant skills from various data sources, helping organisations create a comprehensive skills taxonomy.
2. Adopting skills-based hiring practices
Shifting hiring practices to focus on skills rather than traditional credentials broadens the talent pool and ensures a better job fit. Behaviour-based interview techniques and AI-driven skill assessments can support this transition. Notably, 86 per cent of business leaders are comfortable with prioritising skills over traditional qualifications.
3. Investing in upskilling and reskilling
Given the evolving nature of work, many organisations recognise that their current workforce skills may not meet future demands. AI-powered learning platforms can identify critical skills and tailor training programmes accordingly. Internal mobility, where employees are matched with new roles based on their evolving skills, can also help retain top talent.
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4. Implementing AI-powered skills management
AI-driven tools such as Workday Skills Cloud offer a structured way to infer, curate, and match skills to opportunities. For instance, Best Buy Canada leverages AI to align employee skills with internal job openings, enhancing career development and talent retention.
5. Addressing challenges in the transition
Transitioning to a skills-based approach comes with challenges such as resistance to change and data integration complexities. Businesses must invest in scalable, integrated systems to manage skills data effectively and ensure seamless adoption.
6. Strengthening change management and communication
A clear communication strategy is essential for gaining leadership and employee buy-in. Change management efforts should include structured implementation plans, support systems, and transparent messaging about the benefits of a skills-first approach.
7. Fostering a culture of continuous learning
Businesses must cultivate an environment where continuous learning is encouraged. This involves providing access to AI-powered learning platforms, recognising skill development achievements, and creating pathways for career progression based on acquired competencies.
8. Investing in quality skills data
Reliable skills data is critical for successful implementation. Organisations must use both internal and external data sources to build a robust skills framework, ensuring accurate insights for workforce planning.
9. Taking a value-driven approach
Rather than implementing skills-based strategies as a standalone HR initiative, businesses should align them with key organisational objectives. Pilot projects can demonstrate tangible benefits, encouraging broader adoption.
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10. Iterating and adapting for continuous improvement
The shift to a skills-based approach requires an iterative mindset. Businesses should start with pilot projects, analyse results, and refine strategies based on insights gained before scaling up.
As organisations navigate this transition, AI will continue to be a driving force in shaping workforce readiness. Companies that embrace AI-powered skills strategies will be better positioned to adapt to evolving market demands, enhance employee engagement, and drive innovation.
By proactively addressing skills shortages and leveraging AI-driven insights, businesses can build agile, resilient workforces that thrive in an increasingly complex and competitive landscape.
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