Building a skills-based talent strategy

Key takeaways

1. Put job architecture in place before you build a skills taxonomy

   Jagannathan said you cannot say what skills roles need until you know what roles you have. The next step is a shared skills taxonomy that acts as a common language across the business. In Jagannathan's experience more than half of organisations are still at this early stage, and fewer than one in ten have reached skills-based pay or skills-based workforce planning.

2. Define future skills from market data, not intuition

   Jagannathan argued that intuition looks backwards because it rests on past experience. Skills move quickly: Aon's own data showed almost 30% of the top skills in financial services changed within a year. Soft skills such as empathy and relationship management now sit alongside data and analytics near the top of the lists.

3. Match the rigour of the assessment to the stakes of the decision

   Connolly said assessment is not one size fits all. Self-ratings and manager or stakeholder ratings work well for benchmarking the skills a workforce has. Recruitment, promotion and skills-based pay are high-stakes decisions and need more robust tools, such as scientific assessments and skills-based interviews.

4. How you position a skills assessment decides who takes part

   Page described a voluntary pilot at a global financial services firm, where uptake for this kind of exercise is typically 10 to 15%. The pilot reached 72% completion through a phased change plan, backing from senior leaders, focus groups and framing the assessments as questionnaires. Self and manager ratings turned out closely aligned, so the firm could use just one of them in future.

5. Use gap analysis to test your L&D investment and decide what to build or buy

   In Page's case study, proficiency was highest in the behaviours the firm had invested in, such as accountability and integrity. The biggest gaps were in innovation, complex problem solving and leadership, which were also among the skills trending in the market. Leadership showed both low proficiency and low potential, so the advice was to hire for it rather than try to reskill.

6. Map transferable skills to open up internal mobility and a wider talent pool

   Jagannathan showed how skills overlap between job families, for example across marketing, sales, customer service and communications, or across finance, treasury and HR operations. A finance vacancy could then be filled from adjacent roles rather than by hiring externally. Jagannathan added that hiring for skills rather than job history helps people returning from career breaks.