In this article, we will explore why organizations are transforming from role-based to skills-based. Why this transition is mandatory for increasing the efficiency and productivity of workplaces.
Artificial Intelligence: A Technology Renaissance
With the advent of advanced technology, where computers are rooted in the era of the sixth generation, known as Generative AI, it seems odd to have knowledge without it. Advanced technology is providing us with tools that are most helpful in excelling at human-based jobs in almost every field. Knowledge without these tools is now partial. A learner in a workplace finds himself stuck by doing only hard work rather than smart work. Switching from role-based organizations to skill-based ones is the need of the hour. There is a rapid transition of companies switching from traditional to high-tech skill-based approaches. Skill-based companies are able to increase their productivity and efficiency much more than role-based companies. It is essential for workplaces to transform from traditional to skill-based. According to a PwC report from 2023, many companies still prioritize formal qualifications and job histories over skills, which is why they are unable to fully utilize the potential of their workforce. The report also stated: “A survey reveals that 35% of employees believe their skills aren’t evident from qualifications or job histories, and 27% feel employers focus too much on job histories rather than skills.”
Why Role-Based Organizations Lost Their Relevance
Role-based organizations work on a structural approach model. The model is hierarchical, where an employee is positioned in a specific place. A top-level boss is assisted by their subordinate staff. The employee is given a particular job related to their department, such as Human Resources, Finance, Sales, or Operations.
In a role-based organization, the focus is on the responsibilities outlined for a specific position. The employee is assigned a fixed role for which they are competent. An employee is recruited based on their academic degree, experience, and past records from other companies. These jobs have the following features:
- Career Development: Progression often means moving up within a single job hierarchy.
- Growth of Company: An employee works for their department, which contributes to the overall growth of the company.
- Static Roles: Employees are stuck in their static positions; work is done as per their role, not as per their skills. For example, an HR employee cannot show their performance in sales, even if they are skilled in that area.
The Shift From Role-Based to Skill-Based Learning: Why It Matters
Skill-based companies operate on a model of liberty. In these organizations, employees feel elated, having the choice of using their skills with flexibility. These companies upskill and reskill their employees with micro and mega technological tools. An employee readily grows with the company, creating a win-win situation. Skill-based companies are competent, advanced, and more result-oriented. If we shift our focus or widen our lenses, skill-based organizations expand the horizon of learning in the following ways:
- Increased Agility: These organizations quickly adapt to increasing technological trends.
- Increased Productivity: Skill-based organizations meet their targets ahead of time. Advanced technological tools speed up mundane and redundant tasks, showing significantly better results compared to traditional role-based organizations.
- Increased Efficiency: Organizations that have adopted the skill-based approach have shown positive results. According to a Deloitte survey, due to organizational shifts, companies are:
- 52% more likely to innovate.
- 57% more likely to anticipate and respond actively.
- 107% more likely to place talent effectively.
- 98% more likely to have a reputation as a place to grow and develop98% more likely to retain high performers.
What Makes a Skill-Based Company To Be At The Top
Employees are the main workforce that makes a company to grow. Good industries invest their resources, such as time and money, in them to get the best results. According to Boshe and Bober (in the Dashe report), an employee should follow five steps to acquaint themselves with the growing demand of the company.
These steps are:
- Learn More: During workflow, a professional should squeeze knowledge of learning to increase their own graph of growth. Skill-based companies provide novel chances for every individual’s development. Newer micro and mega trainings are provided to inculcate new skills among employees.
- Learn New: With the advancement of technology, skill-based companies discover new techniques of learning and development. Employees take the chance of upskilling and reskilling in order to rejuvenate their knowledge with the changing environment.
- Apply: After upskilling and reskilling, it is time to apply the skill set in the industry. Whenever there is a knowledge gap, micro-tech provides handy knowledge. This can be in the form of questions and answers, allowing employees to get real-time solutions to their queries.
- Solve and Change: The acquired knowledge should solve the company’s issues. Whenever there is any sort of hindrance in the workflow, the employee should make an impact on the company with this training.
Top 3 Reasons How Soft Skills Impact A Company
Having all the hard skills never means a company is done with everything it needs. An inseparable part of human nature, known as interpersonal skills, are equally important as hard skills. Hard skills make a person to get a job, but soft skills help them hold onto it. “Hard skills are the boat and soft skills the tide”. Hard skills are measurable and quantifiable, while soft skills are only felt. Soft skills include communication skills, leadership qualities, adaptability, critical thinking, time management, resource management, and many more.
From the plethora of soft skills, we will discuss the main three here:
- Adaptability: It is the adjustment of a person to the changing environment. In organizations, an adaptable employee can fit into any situation. This enables flexibility and openness to new challenges. This skill makes a professional good in various aspects, allowing them to embrace new learning and progress to the next level. Being stagnant and not embracing change can result in dullness and absurdity. Being adaptable means responding quickly to changing ideas, goals, peer pressure, and competition. If you are adaptable, you should also possess qualities like communication skill, problem-solving, and critical thinking. Adaptability, makes you a problem solver and open-minded, favoring teamwork and striving for the betterment of the company.
- Leadership Quality: Leadership quality is a broad term. A professional with this quality should possess various qualities, such as time management, resource management, staff management, critical thinking, problem-solving, and more. A leader should be a motivator, inspirer, and vibrant in driving their team.
- Digital Literacy: Manage teams leveraging technologies. Digital literacy is the ability of an organization to use digital tools. With the advent of advanced technology, it is difficult to imagine life without digital literacy. We encounter digital tools everywhere, from shopping to entertainment, research, medicine, and forensics. Organizations with digitally literate staff are more likely to lead in the race of competition. McKinsey & Company defines digital literacy as the ability to handle digital data, use popular software, access digital services, and interact with AI. Digital literacy involves knowing how to use digital tools within an organization to increase efficiency and productivity. It reveals innovative business models. The term has evolved previously, digital literacy meant using computer skills in IT departments. Now, it means knowing how to use Generative AI tools like ChatGPT, chatbots, and Copilot. AI has done wonders in every field of our life, deepening search methods and providing a flood of knowledge. Successful managers lead their organizations by hiring digitally literate staff. They train their staff with timely sessions as needed and remain open-minded to the changing tech world.
Case Study of Skill-Based Companies
Among the plethora of skill-based companies, we will highlight some leading ones:
- Cleveland Clinic: This medical company focuses on skills to treat patients holistically rather than specific medical specializations. The gaps in role-based companies are often filled by skill-based organizations. When role-based organizations run smoothly but lack agility, agency, and equity, skill-based companies step in to meet these demands.
- Unilever: Unilever’s strategy, led by Raquel, is to build a community of like-minded people who value progress and sustainability.
- IBM: In 2021, IBM pledged to skill 30 million people worldwide by 2030. IBM launched SkillsBuild, an online platform with over 1,000 courses on topics ranging from intelligence to cybersecurity.
- Google: Applied CS Skills is a free online course by Google designed to prepare individuals for CS careers through hands-on coding experiences.
Conclusion
Without soft skills, companies cannot excel in their career growth. We at DabbleDo are training employees, professionals, and students to get acquainted with these tools. Soft skills are the main driving skills that make you a great communicator and speaker, helping you overcome professional fears. These skills boost your personality and can transform you into a vibrant, vigilant, and prudent individual.
