Saurabh Dwivedi (Partner, Offering Leader for Organization Transformation, Deloitte India), Japneet Kaur Sachdeva (Partner, Human Capital, Analytics and AI in HR Specialization, Deloitte India), and Upekha Ukuwela (Director, Technology and Transformation – Human Capital, Deloitte Sri Lanka and Maldives) discuss the need for organizations to transition from traditional role-based structures to skills-based models to remain competitive.
Traditional definitions of jobs and roles often restrict workforce potential, with employees performing only a portion of predefined tasks. A skills-based model identifies and deploys critical skills across projects and functions, enhancing workforce flexibility and adaptability to meet evolving business demands. This approach improves productivity by optimizing resources and increasing employee satisfaction through meaningful skill application and flexible and transparent career paths. Successful implementation of a skill-based organisation requires technology enablement, strong governance, leadership alignment, and cultural change to foster continuous learning and overcome resistance. Organizations can build agility and resilience in rapidly changing markets by prioritising skills over roles.
What are the key steps to implementing a skills-led strategy? How can organizations identify the critical skills needed to stay competitive?
Saurabh: Traditionally, organizations defined work based on roles and job descriptions, with people assigned to these predefined positions. However, studies show that employees typically engage in only 25 to 30% of what their job descriptions outline. The rest of their work often involves tasks outside their core responsibilities, such as contributing to various projects, initiatives, or cross-functional efforts.
In response to this, modern organizations are shifting towards a skills-based model. Instead of focusing solely on job roles, they identify the skills required to achieve specific outcomes and better align their HR policies, work structures, and talent management. This approach allows them to handpick individuals with the right skills, regardless of their current job titles or departments, and assign tasks across different functions. This shift reflects a more flexible and dynamic way of organizing work, driven by the skills that people bring to the table.
Traditionally, we define roles, assign people to them, and track KPIs based on those roles. Do you suggest this represents a fundamental shift in how we approach work?
Japneet: Traditionally, organizations have used roles as the anchor for everything from staffing to learning, rewards, and compensation. For example, role requirements determine staffing decisions, and learning centres around the skills needed for a specific role. Similarly, a job role determines the rewards and recognitions, and job titles and responsibilities benchmark compensation. We are advocating for a shift from role-based to skill-based frameworks. Instead of saying this role needs to perform this job, we should focus on identifying the skills required to complete a task or project. For rewards and recognition, rather than rewarding someone for their role, we should reward individuals for possessing critical and valuable skills, especially those in high demand.
Ultimately, the goal is to make skills the central anchor, replacing roles as the foundation for organization and talent management, processes, and policies. This approach fosters greater flexibility and adaptability within the organization while recognizing the value of specific skill sets over job titles.
Saurabh: Skill-based organizations are becoming increasingly necessary. Several factors drive this shift. Workers today seek more autonomy and freedom in their careers. They no longer want to be confined to a single silo for the rest of their lives. Employees want flexibility to explore various roles and responsibilities, unlike in the past when a career path meant a lifetime commitment to that function. The half-life of careers is now about four and a half to five years, meaning that skills or jobs relevant today may become obsolete in just a few years, making it crucial for workers to adapt and develop new skills continuously rather than sticking to a single function.
Saurabh Dwivedi – Partner, Offering Leader for Organization Transformation, Deloitte India.
Organizations today need more agility, speed, and innovation to stay competitive. That requires a more flexible workforce that can shift across projects, tasks, and functions. Businesses must focus on building a skill-based model to maximize the potential of existing resources where employees can contribute based on their diverse abilities rather than being limited by specific roles.
Leaders often focus on productivity. How do you reconcile a role defined by a set of skills aimed at outcomes with the need to measure productivity?
Upekha: Consider the role of a recruiter. Traditionally, the recruitment process starts with a job description outlining specific qualifications and experience required. The recruiter then searches for candidates who meet these criteria, which limits the talent pool and can take longer to find the right fit. In a skill-based organization, the focus shifts from the current role or qualifications to the specific skills required for the job. This approach allows recruiters to look for candidates with adjacent or transferable skills, not necessarily from the same job function. They can then assess skill gaps and plan for upskilling, making the candidate a better role fit. As a result, the recruiter can access a broader talent pool, reducing the time needed to find suitable candidates and ultimately increasing productivity.
Similarly, employees in a skill-based organization can apply their skills to a broader range of tasks, allowing them to deliver results more quickly and efficiently. This flexibility avoids confining employees to roles that may not align with their aspirations or skill set, improving job satisfaction and productivity. In short, adopting a skill-based philosophy brings numerous benefits: increased flexibility, productivity, and agility. Organizations become more adaptable, able to respond swiftly to changes in the business environment, and better positioned to tap into a diverse range of talent.
Japneet: A skill-based organization significantly enhances productivity; let me explain why. A common challenge in many organizations is that they often spread the same skills across different departments, with slight variations in how they are applied. In a traditional role-based structure, these departments work in silos, making it challenging to optimize resources across the organization. However, in a skill-based organization, this challenge becomes an opportunity. You can quickly move resources between departments by focusing on skills rather than roles.
Japneet Kaur Sachdeva – Partner, Human Capital, Analytics and AI in HR Specialization, Deloitte India.
For example, project management skills exist in various departments, but each department may use those skills in different contexts. In a skill-based model, if one department is struggling, you can allocate project managers from other areas to support that team, leveraging their skills where they are most needed. This approach allows for dynamic workforce planning and scheduling based on the skills required, not just the job titles. If one product line is underperforming, you can quickly deploy skilled resources to support a thriving one.
The ability to allocate talent across departments based on skills enables organizations to optimize resources and improve overall productivity. In essence, by adopting a skill-based approach to workforce planning and talent management, organizations can operate more efficiently, adapt quickly, and become more productive.
Upekha: Apart from improving organizational productivity, a skill-based approach significantly boosts employee satisfaction and experience. Employees are likelier to feel engaged and fulfilled when not forced into roles that do not align with their skills or interests. Often, traditional job structures push individuals to acquire skills they may not be interested in or passionate about simply because the role requires it.
Japneet: That is a very critical point. In many employee engagement surveys, one of the most common complaints is that employees feel unhappy because they are not fully utilizing their skills. They often express frustration with being in roles that do not allow them to leverage their capabilities or develop new skills they are interested in.
Saurabh: The newer generation entering the workforce has different expectations. They want to feel empowered to shape their careers. They seek the opportunity to decide what they work on and engage in projects where they can apply and develop their skills in new and meaningful ways. Organizations that offer this flexibility, allowing employees to work on diverse challenges and contribute in areas that align with their interests, are more likely to foster a motivated, engaged, and satisfied workforce.
For organizations convinced about shifting from roles-based to skills-based structures, how do they successfully transition? What is your experience with such transitions, and do systems, frameworks, or HR software exist that prioritize skills over roles for success?
Saurabh: While the systems often support a skill-based approach, the real challenge lies in whether the organization is ready to transition. One source of resistance is the perception that becoming skills-based entails overhauling structures, which can feel overwhelming. The key is to approach it in steps. You need to transform the entire organization one step at a time.
Start small by focusing on a specific function, department, or location where there is already a natural affinity for skills. For example, you could begin with the digital department, marketing, sales, or any other function where skills are more easily identifiable and transferable. Focusing on low-hanging fruit allows you to pilot the approach, demonstrate its impact, and gradually expand it across the organization. This helps build momentum, and the transition can evolve organically over time. You could also think about implementing a skill-based organization for new projects or initiatives, where, rather than roles, the structure is aligned towards skills.
Another approach organizations have used is to focus on one specific HR process. For example, they might start by transitioning their learning and development programmes to a skills-based framework focusing on the skills employees want to develop rather than limiting them to their current roles. Similarly, some organizations begin with skills-based hiring instead of traditional role-based hiring, avoiding overwhelming the organization and allowing for a more manageable and sustainable transformation.
Japneet: Today, with the power of technology and AI, organizations can transition to a skills-based model much more efficiently than ever before. A few years ago, conducting a skills overhaul would have been an extensive and time-consuming exercise. You would have needed to assess each role manually, identify the skills associated with them and evaluate proficiency levels — a process that could take months. However, that is no longer the case. Organizations can automatically leverage existing data with AI and advanced algorithms to build skill profiles.
AI can generate an up-to-date skill profile in seconds by pulling together structured and unstructured data such as learning courses employees have taken, performance management histories, roles they have held, experiences gained, and feedback received from managers. Moreover, once this process becomes automated and institutionalized, it will continuously update. For example, after employees complete a new learning course or finish a project, their skill profile will automatically reflect these updates, making the whole process much more dynamic and reducing the need for manual updates or lengthy assessments.
Upekha: From a non-tech perspective, there are a couple of key considerations for successfully driving the shift to a skill-based organization. A crucial question is, who owns the transformation process? Is it the responsibility of HR, leadership, or both? While leadership may drive the vision, like a CEO advocating for a move to a skills-based model, it is crucial to have clear ownership and accountability because the transformation touches multiple organisational functions. Therefore, it requires cross-functional collaboration.
Another non-tech aspect is the need for a standardized language around skills. For example, the interpretation of communication skills can differ from person to person. Establishing a shared understanding of the definition of each skill and proficiency level is essential. This clarity ensures that employees and leaders align on how they view and assess skills. Even though there are many technology platforms and solutions available, companies that want to start small with limited investment must focus on these foundational elements first.
What are the non-negotiable ingredients for the success of a transition from a role-based system to a skills-based system?
Upekha: Governance is critical in transitioning to a skill-based organization. The organization must be on board with the change and believe in its benefits. Even though a company wants to move to a skill-based approach, the organization’s maturity level and the industry it represents determine how feasible and effective this transformation will be.
Upekha Ukuwela – Director, Technology and Transformation – Human Capital, Deloitte Sri Lanka and Maldives.
The second key is ensuring the skill-based philosophy permeates all aspects of talent management. After many years of relying on a role-based approach, shifting to a skill-based model requires alignment across the organization. Everyone must agree that skills will be the focus moving forward, from hiring to development to deployment. This shared understanding is essential for consistency and smooth implementation.
Finally, the leadership must make the right investments, revise policies and processes, and invest in technology. Attempting to manage the transition manually would be overly time-consuming and inefficient, and by the time the process is complete, the demand for specific skills may have already shifted.
Saurabh: A recent global study by Deloitte highlighted a significant gap between the perspectives of leaders and employees regarding the transition to a skills-based organization. The study found that 73-74% of leaders believed that moving towards a skills-based organization was the best way forward. However, only 6% thought their infrastructure was ready for it. On the other hand, 92-93% of employees felt that a skills-based organization would allow them to utilize their skills better, demonstrating a strong desire for more flexibility and opportunities to apply their capabilities.
The resistance to change is the maximum at the leadership level. Employees are ready to be appraised or assessed at a skill level.
Japneet: By examining each side’s challenges and opportunities, we can understand the reason behind this gap in perspectives between leaders and employees. From the leader’s perspective, transitioning to a skills-based organization involves a significant investment. It requires changes to technology and processes and a shift from the traditional ways they’ve operated for decades.
The shift to a skills-based organization offers substantial benefits from the employee’s perspective. Employees can apply their skill sets across different functions and areas of the organization, which can lead to more varied and fulfilling work. This flexibility can increase job satisfaction by allowing employees to explore other roles and projects. Employees gain clearer career pathways when skills are the base for career progression. Moreover, a skills-based organization offers learning opportunities by showing employees exactly what skills they need to advance. It provides clarity and direction, making it easier for them to plan their development and growth.
Upekha: From the employer’s perspective, a significant concern when transitioning to a skills-based organization is using data to make crucial decisions like promotions and rewards. Traditionally, these decisions have been based on role performance or tenure, but a skills-based approach relies on data to assess employees’ skills and growth potential. The challenge lies in ensuring that the data used is valid and reliable.
Saurabh: The challenge with transitioning to a skills-based organization stems from organisational infrastructure needing more time to support it fully. The shift requires a fundamental change in how roles are defined, moving away from traditional titles like branch manager or talent acquisition specialist and instead focusing on specific skills such as digital systems thinker, creating complexities around key decisions like compensation benchmarking, promotions, and internal mobility.
For example, how do you compare the skills of one branch manager with another or determine their value within the organization when a skill set defines the roles rather than a traditional job title? Such decisions are complex, and this is where leaders often face resistance. They are not necessarily wrong to hesitate; it is a significant shift that requires careful, step-by-step implementation rather than an abrupt overhaul of the entire system.
Japneet: It’s essential to understand that transitioning to a skills-based organization doesn’t mean eliminating organizational structures or job titles. Instead, the shift is about changing the anchor of decision-making. While you still need some structure and sanity in your organization, the focus moves away from roles and titles, and instead, skills determine decisions. For example, talent management decisions like hiring, promotions, learning, and performance pay should prioritize employees’ skills, not just job titles. This approach ensures that the focus is on rewarding and advancing employees based on their critical skills, which are more important than their titles.
Organizations face the challenge of legacy systems that track data in a role-based format. How can an organization be ready to make this shift and approach the transition effectively?
Upekha: Choose the function to focus on and decide on the scale, speed, and effort for skill development, identify existing job-based knowledge, distinguish underlying skills needed for success, create skill profiles and assess current skill inventory within the organization. Then, identify gaps, determine whether to acquire, borrow or build the necessary skills to close the gaps, identify future skill needs, and invest in learning initiatives to ensure readiness for the future.
From your experience, why do initiatives to transition to a skills-based organization stumble or fail?
Upekha: The shift towards a skills-based organization often needs help, mainly due to a disconnect between implementation and employee understanding. While leadership drives changes at the top level, employees frequently need clarification on the reasons for change, how it will impact their roles, and how compensation will be determined moving forward. These challenges arise from a misalignment between people, processes, and technology.
Saurabh: The main reasons organizations struggle with transitioning to a skills-based approach are the inability to move away from outdated practices, which hinders progress, failure to identify the most critical skills needed to align with their business priorities or vision, leading to the development of irrelevant skills, and lack of clear definition of what constitutes a skill, making it difficult to determine where employees should invest their time and efforts.
Japneet: The transition also has a cultural element, particularly regarding mindset. For example, “Who owns the skills agenda?” is crucial. In many organizations, a Chief Learning Officer (CLO) may not be part of the Ex-Co and is instead positioned within the HR function. This reflects a broader cultural shift – organizations must decide how much importance they place on skills development and the learning journey.
Does it take more effort because a role needs to remain the same while the relevant skills or industry must continue to transform?
Japneet: That is a critical point. For example, we recently analysed the role of a drilling engineer and found that AI was emerging as a required skill. The reason was that many organizations were using AI to detect faults in drills, which meant drilling engineers needed to understand AI. This highlights the need for continuous evolution, regularly reassessing what future skills will be required. Skills like AI and green skills are becoming essential across roles. Even traditional workers, like those in plant operations, will need to understand concepts like sustainability and AI in the future.
Saurabh: A fellow partner once said that people should not fear AI or that it will take their jobs. What they should be fearful of is not using AI in their careers. Skills like AI and sustainability must be embedded in every role, including those of a drilling engineer. As a result, it is crucial to focus on the right skills and continually reassess which skills are necessary for the future.
Japneet: It is essential to recognize that skill development is a business priority. While it must be integrated into talent management processes, focusing on skills is crucial for maintaining productivity and effectiveness. Organizations must invest in skills today to avoid falling behind the market. A skills-based organization is one way to approach this. Still, the broader focus on skill investment is critical not just for employee learning but for ensuring the long-term success and competitiveness of the business.
When engaging with organizations, what are their technology and AI pain points? Are they aware of the AI-related skills they need and how to deploy them? What are their apprehensions and overall attitude toward AI?
Saurabh: The adoption of AI varies across different markets, with each region at a different level of maturity. In some Western markets, AI is already deeply integrated into business practices, with organizations focusing on enhancing customer and employee delivery through AI. In other markets, many are still in the experimental phase, running proof of concepts (POCs) or prototypes, having seen some benefits but still need to move to full-scale production or commercialization. There are regions with significant apprehension about AI, with concerns that it requires extensive time, effort, and infrastructure. However, this is different. The key is to keep everything intact but to start small, implementing AI in small pockets to understand its potential benefits before scaling up.
Japneet: One of the challenges organizations face is approaching AI prototyping without an apparent business problem in mind. Many jumped into AI simply because it was trendy or because of the hype around generative AI rather than focusing on how AI could solve a specific business issue. The thinking should have been about what business problem must be solved and how AI can help. Additionally, there needs to be more focus on demonstrating the ROI of AI. Prototyping often happened because AI was seen as a fabulous technology, not because it offered tangible business benefits. The key is to select business problems where AI can demonstrate measurable value through increased efficiency or effectiveness. Once organizations focus on these outcomes, it becomes easier to justify investments and move beyond the prototyping phase into full-scale production.
Upekha: In the Sri Lankan market, particularly regarding AI in HR, there is hesitation because many believe AI should be implemented in the business before considering it for HR. HR processes need a certain level of maturity and a well-functioning Human Capital Management (HCM) system before introducing AI. There is a perception that AI will be a big-bang solution that will fix all problems, but in reality, you do not need that level of maturity to start. The key is to begin with small, manageable steps, ensuring that AI addresses a real business problem within HR rather than aiming for a drastic, all-encompassing change.
Saurabh: Globally, organizations that have embarked on the AI journey typically start with customer-facing processes. From there, AI gradually spreads to other parts of the organization. This approach allows for manageable, impactful initial implementations before expanding to broader areas.
How can an organization build a culture of continuous learning?
Upekha: Learning used to be optional. Those interested would learn, while others did their jobs based on muscle memory. However, learning to become part of the organizational culture must be embedded in the core values. At Deloitte, learning is one of our core values, becoming part of our DNA, even for newcomers. Making learning a part of the culture requires a conscious effort to embed it as a foundational value. Learning should be flexible and accessible. Traditional methods like long classroom courses are no longer effective. Given our shorter attention spans, we have moved to microlearning, where platforms like YouTube Shorts or Instagram reels are better suited to how we learn today. Providing multiple ways for employees to learn based on their preferences is key. Technology and AI can significantly make learning more personalized and engaging, allowing employees to learn in ways that suit them.
Japneet: Transforming organizational culture, especially around learning, is a challenging and slow process. It will not happen overnight. One debate we have had is whether to reward learning, such as by tracking hours completed or courses finished. While this may help in the early stages of building a learning culture, we are generally against directly rewarding learning. Instead, we aim for learning to become an intrinsic, self-driven process. Learning should be easily accessible, suited to employees’ attention spans, and something they engage with naturally, knowing that their organization values their development. For example, one client wanted to create a skilling journey for all employees, not limited to skills relevant within the organization but also those that would enhance their employability outside of it. This approach fosters the sentiment that the organization values skill-building, even if employees become more marketable externally. It is about promoting continuous upskilling and creating an environment where learning is a natural, appreciated process.
Saurabh: The initial push to build a continuous transformational culture within an organization must come from the top. Leadership alignment and active driving of initiatives are crucial in the beginning. However, the goal is for this push to eventually become a pull where the culture organically adopts these initiatives. Once the organization shows results and impact, business leaders will proactively approach you with proposals to transform the business or incorporate new technologies. Learning programmes and ongoing transformations will likely fail if transformation remains a push from the top and does not evolve into a pull.
Japneet: Gamification has proven effective in learning. Incorporating elements like leaderboards creates a sense of competition and achievement that pulls employees toward learning. Gamification taps into intrinsic motivation, making learning more engaging and encouraging participation. This approach shifts the focus from a top-down push to a more organic pull, where employees are motivated to actively engage with the learning process.
Can you share a few applications of gamification that can make it enjoyable for everybody?
Japneet: We have applied gamification to learning, especially for AI and generative AI skills. By creating small learning nuggets and making it a competition across different businesses, we have encouraged employees to compete for a spot at the top of the leaderboard. It is not just about completing AI courses. Employees engage with experiences, study multiple use cases, and even participate in simulation games. The key principle is to tap into the competitive spirit, particularly in consulting professions, where there is often a strong drive to outperform others. Gamification turns learning into an exciting challenge, where employees are motivated by the course content and the desire to rank high on the leaderboard, fostering a mindset shift towards continuous learning.
Saurabh: The impact of competition is not limited to professional services; it’s a fundamental human instinct. As soon as there is a competitive element, the effort and engagement naturally increase. Everyone prefers to see their name in the Hall of Fame rather than the Wall of Shame. Gamification leverages this instinct, driving higher levels of participation and motivation.
Upekha: Gamification goes beyond leaderboards or champion titles; it can also involve collecting badges. For example, when employees complete a course and post their achievements on LinkedIn, earning badges and showcasing them can create a sense of competition.
Large organisations often structure learning and development with internal resources. However, with platforms like YouTube and Coursera offering vast content, can organizations integrate these free resources into their processes?
Japneet: In the past, learning focused primarily on content creation. However, the conversation has shifted towards content curation in the last decade. Now, platforms like LinkedIn Learning or YouTube emphasize curating and providing relevant links or resources rather than creating original content. The goal is to gather the best existing materials and present them to employees in a structured, easily accessible way. In modern learning approaches, the focus is on curation instead of creating content. If there are five key areas you want employees to learn, you gather relevant resources from multiple platforms like YouTube, Coursera, Udemy, or LinkedIn Learning. These resources are curated and presented in one centralized location, allowing employees to access them quickly and learn at their own pace, on their own time. This approach makes learning more flexible and personalized.
Saurabh: Many team members actively pursue skill courses outside of their defined job roles within our organisation. They do not rely on what is available within the organization but instead complete certifications independently, returning with new skills they are eager to apply. Availability of learning resources is no longer a constraint, especially for new-age or smaller organizations that are often better at adapting to this approach than larger ones.
Any closing thoughts?
Upekha: The first step in transitioning to a skill-based organization is understanding where to start, with governance being the top priority. HR, in particular, requires strong support from the Board to get initiatives off the ground. Securing top management support is crucial for success, as it needs to trickle down throughout the organization. Start small and approach the journey with the understanding that transformation will not happen overnight. There will be failures, but you can achieve your goals by maintaining an agile mindset and learning from setbacks.
Japneet: When planning skill-based initiatives, a clear business case is crucial. Focus on the specific business problem you are solving, whether improving productivity or enhancing the employee experience. Solidifying this business case will support your efforts in many ways, from securing buy-in from leadership to obtaining the necessary investments in technology, people, and data. As you demonstrate the ROI and benefits of your initiatives over time, you will gradually reach the desired future state. Ultimately, pursue something other than a skill-based organization because it is a popular trend. Do it because it will lead to tangible improvements in productivity and overall business success.
Saurabh: A skills-based organization is not a fad but a fundamental shift that will soon be essential. Start small and do not attempt a complete overhaul. Focus on aligning your HR processes and policies to become skills-based. Be clear about what you want to achieve: faster innovation, improved productivity, speed to market, or enhanced employee experience. Measure outcomes to track progress, but most importantly, continuously validate and evolve the model. A skills-based approach requires ongoing refinement, not a one-time change.