More companies consider transitioning to become a skills-based organization

Experts highlight the importance of following guidelines to create an inclusive workplace

BY Jonalyn Cueto 08 Jun 2024

Udemy, an online skills marketplace, has released its latest report, Workplace 2.0: The Promise of the Skills-based Organization, shedding light on the transition to a “skills-based organization” where talent management is based on the development of skills rather than traditional markers like title or education.

Drawing from a survey of 1,600 professionals worldwide, the report unveils a significant trend: 84% of companies are actively considering transitioning to become a skills-based organization within the next year. Moreover, 75% have already integrated at least one skill-based talent process, such as hiring or onboarding. However, there’s a noticeable gap in comprehension, with leadership exhibiting greater familiarity with these concepts compared to individual contributors.

Greg Brown, Udemy’s president and CEO, stressed the importance of surmounting change management obstacles for a seamless transition. “Leading companies are realizing that skills-based approaches can help them overcome the challenges of sourcing qualified talent, while also supporting employees in gaining the skills needed to grow their careers,” he said.

“But to fully complete the transition, organizations must move past the growing pains that come with any change management process. This report offers companies practical advice and a roadmap to not just implement skills-based approaches, but to do so effectively.”

Leaders taking on skills-based processes

The report found several key trends and focal points:

Leadership development: While 83% of senior leaders acknowledge the importance of effective leadership, only 28% of respondents report satisfactory communication of skills-based strategies within their organizations.
Collaborative culture: Purposeful collaboration is essential for fostering equitable workplaces. Nonetheless, observed improvements in fairness, equity, and diversified representation in leadership remain limited.
Investment in skills verification: Despite the significance of eliminating degree requirements, its adoption remains constrained. Organizations are urged to explore alternative methods, such as third-party badging, to validate skill sets.

Madhavi Bhasin, Udemy’s vice president, highlighted the transformative potential of skills-based approaches in promoting workplace equity. “This report shows companies are making meaningful progress towards leveraging skills-based approaches for greater diversity and equity, but more work must be done,” she said. “Following the guidance of Workplace 2.0 will help companies capture the full value of an inclusive workplace.”