Skills intelligence: key to future-ready workforce

In the late 1990s, during the "war for talent," companies focused on acquiring external talent. This changed with the mid-2000s economic boom, which increased employee turnover and tested their loyalty.

As a result, HR investments prioritized talent acquisition data over understanding the existing workforce, evidenced by tools like LinkedIn Recruiter. However, recent economic downturns have shifted priorities towards optimizing current employees.

This shift reinforces the "skills approach," which uses both external and internal data to view resources holistically and capitalize on opportunities. This data-driven strategy helps organizations identify, acquire, and mobilize critical skills, ensuring readiness for future challenges.

With a renewed focus on internal talent, advanced skills management is reshaping competitiveness. This article explores this approach, its benefits, and how adopting it can lead to significant efficiencies.

Understanding Skills Intelligence

The skills approach equips organizations with the tools, processes, and habits to comprehend and respond effectively to the demands of their competitive industries. It is essential for identifying the skills required for both individual and organizational success, focusing on current needs while anticipating future ones. By bridging skill gaps and maintaining continuous alignment with market trends, this approach is a strategic planning ally.

At the core of this approach are three key components:

1. Skills Inventory: A comprehensive library of skills, qualifications, professional experiences, certifications, and training within an organization’s workforce. This thorough inventory tracks existing capabilities and highlights areas for development, ensuring employees' skills stay relevant and competitive.
2. Skills Ontology: Beyond simple classification, a skills ontology offers in-depth analysis by mapping relationships between various skills in professional contexts. This structured framework enables organizations to navigate the complexity of HR development, supporting more informed and proactive talent management decisions.
3. AI-Enhanced Data Quality: By leveraging advanced technologies, particularly AI, this framework allows companies to make data-driven decisions. This culture requires a foundation of reliable HR data, supported by information systems that seamlessly communicate with one another. For instance, performance reviews or annual appraisals need to be integrated with the skills management system to interpret and influence outcomes effectively.

What Are the Advantages of Implementing Skills Intelligence?

This HR strategy enhances workforce diversity, identifies reskilling requirements, and boosts performance. It supports individualized career paths, reduces recruitment costs, and aids in effective succession planning, making organizations more adaptable and resilient.

The 5 Advantages of a Skills Intelligence Approach

Advantage #1: Cultivate a Diverse Talent Pool with Skills-Focused Strategies

Embracing a skills-based approach to workforce planning can significantly remove traditional barriers that often disadvantage underrepresented groups. By prioritizing skills over factors such as educational background, recruitment decisions become fairer and more inclusive.

Achieving Greater Diversity through Skills Intelligence: Case Study An illustrative example is provided by a leading consulting, auditing, legal, and tax firm. Here, generative artificial intelligence was utilized to explain AI recommendations using neural networks. Previously, there was a tendency to select similar candidate profiles. However, the introduction of Generative AI enabled a significant diversification of the types of profiles chosen.

Results: The percentage of profiles considered "atypical" increased from 3% to approximately 15%, demonstrating that AI can profoundly transform HR practices, making them more inclusive and varied. The combination of traditional AI and generative AI has led to a diversification of the selected candidates.

Benefit #2: Identify and Close Skills Gaps

In an era of rapid technological advancement and global economic shifts, the ability to pinpoint and bridge the skills that are most critical to performance is essential. Studies vary on AI's potential to reshape the labor market, with France's INSEE predicting 5% of Western populations affected, while the International Monetary Fund and the World Economic Forum estimate 40-60% of jobs impacted by 2025. By adopting a skills-centric approach, organizations can stay informed about current and future skills demands, enabling proactive responses to skill gaps and ensuring their workforce remains prepared and adaptable.

Focusing on Closing Skills Gaps: Case Study

Background: A leading video game company sought to understand how AI affects its business and skills.

Procedure (Synthesis): Through detailed analysis, specific tasks within jobs were identified and assessed for their importance. These tasks were then categorized into three groups: exposed, transformed, and augmented jobs.

Outcomes: The classification revealed that 71% of tasks were augmented by AI rather than replaced.

Using our skills data analysis technology, we identified:

• Exposed jobs (39%)
• Transformed professions (30%)
• Augmented jobs (32%)

We then modeled the transferability of roles from exposed jobs to transformed or augmented jobs, assisting employees in transitioning to more secure positions for the future.

Benefit #3: Reducing Silos and Supporting Personalized Career Paths

Applying intelligence to skills management transforms traditional hierarchical structures into dynamic talent ecosystems, where skills become the internal currency. By adopting workforce planning based on this currency, companies enable talent to move freely across different departments and divisions within the organization.

At a time when approximately 60% of American workers are open to freelancing, and the number of freelancers in France has doubled over the past decade, companies are capitalizing on this trend.

This shift allows any employee to contribute to multiple internal projects. Offering such short-term assignments should be viewed as a performance accelerator and a key element in improving retention.

Benefit #4: Improve Talent Identification with Data

By adopting a skills-based approach, organizations can significantly reduce recruitment costs. Intelligent skills management platforms provide detailed insights into the qualifications of existing employees and potential new recruits, enabling precise talent identification. This targeted approach minimizes the need for external recruitment by optimizing the allocation of internal resources and ensures that new hires are a perfect match for the role, reducing turnover and associated costs.

Neobrain, Our Personal Story

Ambition and Context: Faced with the challenge of recruiting stable, passionate, and competent data scientists in Paris due to strong competition and a high turnover rate, Neobrain aimed to identify a new location that could support its growing needs while aligning with its strategic objectives. The goal was not only to find a talent-rich environment but also to ensure operational efficiency and employee satisfaction.

Selected Data Sources: To make an informed decision, Neobrain utilized a range of data sources, including labor market analysis, economic and business reports, cost analysis tools, educational institution data, governmental development programs, technology ecosystem reports, and real estate information.

Outcomes: After extensive analysis, Neobrain chose Lisbon as the ideal location for its new data science hub. The city offered the perfect mix of available talent, a supportive technology ecosystem, a reasonable cost of living, and attractive government incentives.

Neobrain has established a 15-strong R&D center in Lisbon, which not only houses data scientists but also supports various roles within the wider Neobrain team. This strategic move has led to a more efficient salary policy and a significant reduction in the turnover rate, keeping it at less than 10%.

Benefit #5: Objective Succession Planning

Effective succession planning is crucial for employee engagement and organizational stability. Although 94% of employers acknowledge its positive impact, many companies still neglect their leadership pipelines, often choosing external hires due to unclear internal talent assessment criteria. Only 55% of executives feel they fully understand the skills and limitations of their senior managers, highlighting significant gaps in succession strategies.

Case Study: A Leader in the Pharmaceutical Industry

Background: A company with 100,000 employees where the process for identifying high-potential individuals relied more on managers highlighting top performers than on an objective assessment.

Process: Neobrain aggregated the results of annual appraisals, performance reviews, and profiles of "high-potential" employees to produce comprehensive "patterns."

Outcomes:

• Confirmation of 85% of the high potentials already identified, with 15% leaving the panel and new employees joining this exclusive group.
• Definition of a list of 10 key indicators for managers to better objectify high potentials.

Skills intelligence : the proven path

We recommend 3 Key Steps

Step 1: Establish a Comprehensive Skills Framework

• Conduct in-depth workshops to inventory skills, assess job descriptions, performance appraisals, and industry standards.
• Link each employee's skills to job requirements to identify internal candidates for advancement.
• Utilize AI to develop a unique ontology, saving time and focusing on stakeholder workshops.

Deliverable: Skills Framework

Step 2: Initiate Skills-Culture Change

• Align strategy with periods of strategic reassessment and engage stakeholders to understand industry demands.
• Encourage employees to participate in their own skills assessments, fostering ownership and commitment.

Deliverable: Skills Mapping

Step 3: Solidify the Skills-Centric Culture

• Enable employees and managers to track professional growth and define career goals.
• Create customized development plans and select training programs based on targeted skills, optimizing career development and training effectiveness.

Deliverable: Skills Development Plan