Worried About the Evolving Workforce? Skills Are A Good Place to Start

two production workers using drill presses in manufacturing facility

Embracing the future of work means addressing employee skill sets holistically by combining workforce developments, workplace demands, and the individual employee.

It's no secret that workforces are evolving. From the uptick of remote and hybrid workers to the growing gig worker economy to new technologies like generative artificial intelligence, such changes are affecting the way work is completed.

Economic stressors have pressure on leaders to cut costs and evaluate the skill sets needed for business success. As business owners and HR leaders become increasingly pressed to make tough decisions about talent while maintaining the business, knowing who on their teams has the skills (or can learn the skills) to fill in gaps is critical.

For businesses to remain successful, profitable and sustainable, business owners and leaders must accelerate the pace of skilling and reskilling their workforces.

Enter, the skill set matrix.

Contrary to what it sounds, the skill set matrix is not a magic spell, pill (or an early 2000s-era movie).

It's simply a log or report that shows all the skills necessary to operate the business and a log of the available skill sets within any given team. A skill set matrix could be department-wide or company-wide or team-specific.

Why is the skill set matrix important?

The skill set matrix is important because it's a base-level assessment of competencies that the company, department or team needs to be successful. The skill set matrix isn't a new invention; they've been used for decades to categorize, organize, and identify talent and gaps within organizations.

The problem with skill matrices is that they cannot account for the social interplay of talent, technology, and individual and team recruitment, so they've become obsolete in some ways and for some industries.

It's time for the skills matrix to evolve

By building a better matrix that accounts for both the evolution of work and the development of the worker, businesses can create staffing solutions that address the needs of their evolving enterprise environments. Kiran Contractor, director of talent acquisition at ADP, says evolving the skill set matrix is not just beneficial, it's imperative. "By actively mapping out — and even redefining — the competencies required to thrive, companies can strategically close the talent gap and foster a culture of continuous growth and adaptation."

Business owners and leaders must leverage four key strategies to create a skills matrix that considers the interplay of talent and technology.

Evaluate your current skills inventory

Many businesses don't completely understand their employees' skill sets, which can lead to shortfalls in certain areas and overabundance in others. Bridging that gap begins with evaluating the skills inventory: what you have, what you need and where you can find what you need. Traditional ways of predicting skill needs aren't working. Employees need more skills for every job, and many of those skills are new. And employees aren't necessarily learning (or being taught) the right skills for their personal and professional development or the organization's benefit.

For business owners and HR leaders to evaluate employees' skills honestly and adequately, they must loop in team leaders to get their perspective and create a basis for cross-reference. HR can't be the expert and sole evaluator of all skills for all staff all the time. Department heads can often provide employee-level insight regarding employee skills that lie outside the purview of traditional HR recruiting and development practices, paving the way for continual cross-training. This plays into workers' willingness to develop new skills for a tech-savvy workplace and creates a much more resilient workforce.

Together, leaders can use both specific knowledge and a holistic view of their teams to identify areas of abundance and gaps. This skills inventory can then be used to inform the greater skills matrix.

Provide talent transparency

To keep your business functioning — or even growing — during the current business climate, businesses must provide transparency on what skills they need and already have. The more transparent a company is about skills, the easier it will be to identify current skill sets, support empowerment through cross-training opportunities, and target top in-house candidates for advancement or lateral changes that suit individual interests.

Employee morale and workplace culture can be negatively impacted — and some may even perceive discrimination — when open roles are not shared internally among teams. Talent transparency helps develop a more accurate skills matrix. According to Contractor, talent transparency can help foster trust. "Talent transparency fosters an atmosphere of trust and growth, ensuring that every team member knows where they stand and how they can contribute to the company's success. By embracing transparency, we are not just filling roles; we are building a resilient and empowered workforce."

Learn more

Now more than ever, if your employees can't find the right fit where they are — whether that's with compensation, benefits, culture, engagement or career path — they are willing and able to go somewhere else. Businesses must evolve to survive and thrive.

The question is how? Get our guide: How to Design a People-Centered Workplace

Identify and develop your top performers

Why do talented employees leave their jobs? Top factors include a lack of challenge and developmental opportunities. In other words, if you don't identify top talent and give them room to grow, you'll quickly develop a retention problem.

The first step in securing top performers is knowing who they are within your organization. This requires creating a cross-organizational task force of stakeholders capable of speaking to specific department needs as well as the goals of your organization at scale. Collectively, this task force can identify the highest-priority skills in your enterprise and match those skills to staff members. Doing so can highlight candidates for promotion and opportunities for extra training to make the best use of talent and support employee development and advancement.

Contactor says that skills development is just as important to employees as it is to organizations. "Investing in employee growth isn't just about filling gaps; it's about creating a culture where continuous learning becomes the cornerstone of retention. When we prioritize the development of our team's abilities, we not only enhance their career trajectory but also solidify their loyalty and commitment to our mission."

Moreover, if your organization needs to pivot within the ever-evolving marketplace, having a talent platform allows you to quickly and effectively identify the skills and roles needed to adapt. As your organization evolves to meet new market demands, such as remote work, realigning goals and identifying which skills can best help the organization adapt can be key to success.

Embrace new technology

Businesses should integrate technology that can enhance matching strengths with opportunities, predict skill trends, and provide cutting-edge AI technology to help workers match their future roles. When plotting a career path, employees benefit from seeing what others have done in the past. To that end, career journey maps from others in the organization can offer substantial insight. Modern software can develop meaningful career paths based on an employee's aspirations and interests. By viewing these, employees can see the exact steps others have taken throughout their careers, learn how many individuals have taken a given path, and connect with their co-workers to learn more. In this way, career mapping tools can provide employees with an informed understanding of any skill or knowledge gaps and facilitate a more active approach to their professional development.

Level up your talent with skills.

Talent drives business success, but talent doesn't exist in a vacuum in the evolving workforce. Inter-departmental and intra-staff interactions play a significant role in identifying talent shortfalls and shoring up key skills. When economic changes require businesses to adapt quickly to new market trends, being able to identify and prioritize the skills most essential to keeping business functioning can help your organization thrive. According to HR trends and priorities for 2024, skills may be the secret to the labor shortage.

Embracing the future of work means creating an employee skill set matrix that addresses both workforce development and workplace demands to deliver operational outcomes. To master this new matrix, businesses must evaluate their skill inventories, provide talent transparency, identify top performers, and embrace new technologies.

Learn more from a client who changed their retention strategy: Eliassen Group: Changing the game to retain top talent.