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  • Writer's pictureJoseph Williams

How to transform into a skills-based organisation

In today's ever-evolving business landscape, how we work, the skills we possess, and how we develop them have significantly transformed.

Gone are the days of rigid job roles and one-size-fits-all approaches. Instead, organisations increasingly shift towards a skills-based model, recognising that it offers many advantages in our fast-paced world. But how do you make this transition, and what is a skills-based organisation?

This guide dives into what is a skills-based organisation, the benefits of transforming into a skills-based organisation and our eight-step plan for putting your will into action.


Two men in a skills-based organisation are using post-its to organise their work

What is a Skills-Based Organisation?

A skills-based organisation places skills at the forefront of its structure. Rather than defining roles based on lists of responsibilities and experiences, it asks further questions about the expectations of previous experiences, i.e., the unique skills and competencies a candidate should possess having had them.

In such a skills-based organisation, individuals are valued for their skills, and roles can be more fluid, allowing for greater adaptability, development and innovation.

The Changing Nature of Work and the Skills-Based Approach

The nature of work has evolved significantly. The influence of technology, globalisation, and the gig economy means job roles are no longer static, and how experiences are gained has shifted significantly. This is where the skills-based approach comes into play. It involves assessing and leveraging the skills and talents of your workforce to drive business success.

Why Skills-Based Organisations Matter

Over 70% of employees don't have the right skills for their jobs—the knock-on effect is disengagement, low productivity and high churn.

Skills-based organisations offer numerous benefits. They are more agile and adaptable, have higher innovation rates and respond more effectively to market changes. Employees in such organisations are often more engaged, as their unique skills are recognised, developed and valued more. This approach also gives organisations a competitive edge in attracting and retaining top talent from broader talent pools.

Graph shows the percentage of employees who say they have not even mastered the skills they need for their jobs today

What is the Difference Between Skill-Based and Role-Based Structures?

A common question that arises is what is the difference between skill-based and role-based structures.

  • In a role-based organisation, job titles dictate responsibilities, often leading to a rigid hierarchy.

  • In a skill-based organisation, skills are prioritised over titles, allowing employees to take on diverse roles as their skills permit. This flexibility fosters innovation and growth.

Transitioning into a Skills-Based Organisation

Transitioning into a skills-based organisation is a process that requires careful planning and execution. Here's a structured approach:

1. Assess Your Current State

  • Skills Audit: Begin by conducting a comprehensive skills audit within your organisation. Identify and compare your employees' skills to those required for your current roles and future business goals.

  • Engage Key Stakeholders: Involve key stakeholders in the assessment process, including department heads and hiring managers. Ask team members and heads where they think the biggest gaps are. Their input is essential for understanding the existing mindset and challenges.

  • Data-Driven Insights: Utilise data analytics to gather insights into current skills and gaps. This objective data can help you build a compelling case for change.

2. Identifying Skills Gaps

  • Holistic Analysis: Go beyond technical skills. Identify the behavioural and transferable skills crucial for success in various roles. This can include communication skills, adaptability, and problem-solving abilities.

  • Employee Feedback: Encourage employees to provide feedback on their skills and areas where they believe improvements are needed. This input can reveal valuable insights.

  • Customised Training Plans: Develop individualised training plans for employees based on their identified gaps. Show them how upskilling will benefit their career growth and personal development.

3. Developing a Skills-Based Strategy

  • Leadership Buy-In: Secure buy-in from top leadership and emphasise the long-term benefits of adopting a skills-based approach. Leadership support is vital in influencing the entire organisation.

  • Communication Plan: Develop a clear and compelling communication plan to explain the strategy to all employees. Address concerns and provide a vision for the future.

  • Pilot Programmes: Consider starting with small-scale pilot programmes in specific departments to demonstrate the effectiveness of the skills-based approach. Showcase early successes.

4. Updating HR Processes

  • HR Process Review: Begin with a comprehensive review of your current HR processes. Examine job postings, candidate screening, interviews, onboarding and learning and development procedures.

  • Skills-Based Hiring Integration: Integrate skills-based hiring principles into HR processes. Rework job descriptions to emphasise required skills, adjust interview questions for skill assessment, roll out scoring sheets and align HR practices with this approach and the amazing candidate/employee data it unlocks.

  • Inclusive Recruitment Platform: Simplify the shift to skills-based hiring by leveraging an inclusive recruitment platform like Clu. This platform streamlines the identification and assessment of skills without disrupting BAU processes, mitigating the complexity of behaviour change.

5. Training and Upskilling

  • Customised Learning Paths: Offer tailored learning paths for employees to acquire the necessary skills. Use a mix of online courses, workshops, and mentorship programmes to accommodate different learning styles.

  • Mentorship Initiatives: Pair employees with mentors who can guide them in acquiring specific skills. Encourage knowledge sharing within the organisation.

  • Continuous Feedback: Implement regular feedback loops to ensure that the training and upskilling programmes are effective and that employees feel supported throughout their learning journey.

6. Fostering a Culture of Continuous Learning

  • Lead by Example: Senior leaders should actively engage in continuous learning and promote it as a core value within the organisation.

  • Recognition and Rewards: Recognise and reward employees who actively participate in upskilling and demonstrate the application of newly acquired skills in their roles.

  • Learning Resources: Provide easy access to learning resources within and outside the organisation and encourage employees to explore them.

7. Measuring Progress

  • KPI Tracking: Continuously track key performance indicators (KPIs) related to skills development, such as the number of completed courses, skills acquisition rate, and productivity improvements. Skills-based organisations also 3x diversity, so make sure you have clear reporting metrics here.

  • Feedback Loops: Collect feedback from employees and hiring managers to understand their experiences with the new approach and make adjustments as necessary.

  • Data-Driven Decision-Making: Use data analytics to make informed decisions about the effectiveness of your skills-based approach and make adjustments based on the insights gained.

8. Overcoming Resistance and Challenges

  • Change Management: Develop a robust change management plan to address resistance, particularly from hiring managers who may hesitate to depart from traditional hiring practices.

  • Training and Support: Offer specialised training and support to hiring managers to help them understand the benefits of skills-based hiring and equip them with the tools and techniques needed for this approach.

  • Success Stories: Share success stories from other departments or organisations that have successfully transitioned to skills-based hiring. Highlight the positive outcomes and impacts on the organisation.

These steps will help you create an environment where skills are valued above job titles, driving agility, innovation, and competitiveness. By updating HR processes to align with skills-based hiring principles and embracing an inclusive recruitment platform like Clu, the transition becomes more efficient, easier and a huge opportunity to promote diversity, reduce bias, and ensure compliance with legal requirements. This holistic approach ensures your organisation's readiness for the challenges and opportunities of a skills-based future of work.


At Clu, we're reinventing how job seekers find jobs by helping Employers get great at skills-based and inclusive hiring.

Contact us today to discover how we can help you make light work of shifting to a skills-based hiring model and create a more agile, skilled, and inclusive workforce.


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