The new hard currency: The data you need to make skills the currency of work

In Davos earlier this year, Sam Altman of Open AI said the world is experiencing unprecedented “velocity and volatility of change”. IMF data shows global economic uncertainty has increased 2.5 times over the past four years compared to the previous 30. Demands for greater agility, speed, and flexibility mean traditional job-based work operating systems are becoming outdated, says Ravin Jesuthasan, co-author of The Skills-Powered Organization. It is skills, he contends, that are the new currency of work.

In this first of a series of special webinars, Ravin dives into the data behind skills with Britt Alcala, Enterprise Talent & Skills at Delta Air Lines, Peter Stevenson, Go To Market Leader of Skills Edge Products at Mercer, and Stuart Crainer, co-founder of Thinkers50.

Find out how a skills-based approach to work allows for more flexible deployment of capabilities than traditional job descriptions. Learn some of the key elements behind the success of Delta’s skills-first strategy. And discover five significant business benefits of adopting a skills-not-jobs mindset.

WATCH IT HERE:

Stuart Crainer:

Hello, and welcome. I’m Stuart Crainer, co-founder of Thinkers50. Welcome to this series of four webinars celebrating the skills-powered organization. In this opening webinar, we will be looking at the data you need to make skills the currency of work. And then you can join us for September the 18th when we’ll have another great session on how organizations can reshape how they manage talent and skills to be prepared for an uncertain future. And then for the third in the series of webinars on October the 2nd, we will be looking at the great redesign of work. And finally, on 16th of October, we’ll have Ravin Jesuthasan and Tanuj Kapilashrami crystallizing the key messages from their book, The Skills-Powered Organization: The Journey to the Next Generation Enterprise, which is published by MIT Press on October the 1st. There is a lot to look forward to and some great conversations in store.

Setting the pace today, we’re joined by Ravin Jesuthasan, who is the co-author of The Skills-Powered Organization, as well as being the global leader for work and skills at Mercer. Ravin is joined by Peter Stevenson, who is the Go To Market Leader of Skills Edge Products at Mercer. And giving practical insights on the discussion of the data requirements for making skills the currency of work, we are joined by Britt Alcala, who is a specialist in enterprise talent and skills at Delta Air Lines. A big welcome to Ravin, Peter, and Britt, and also to everyone joining us from around the world. Please let us know where you’re joining from today and send in your comments, thoughts, and questions at any time during the session. We want to make these sessions as informative and interactive as possible, so we’ll make time for your input. We’ve got a full hour. Let’s kick things off with Ravin and the key question behind this series, why are skills so important now?

Ravin Jesuthasan:

Yeah, thank you, Stuart. It’s lovely to be here with you. Hoping my audio’s coming through, okay. I think Sam Altman said it really well, Stuart, in Davos this year in a session that he co-led. He said that, “As a species, we have never seen the velocity and volatility of change hit the levels that we’ve seen over the last three years.”

And IMF data certainly bears it out. You know the IMF estimates that the level of uncertainty in the global economy has increased by 2.5 times. That’s not 2.5%, but 2.5 times over the last four years relative to the previous 30, which is really saying something.

And as you look at this velocity and volatility of change, what it’s demanding is a much greater level of agility and flexibility on the part of organizations, much greater level of resilience as it relates to how they respond to changing, demand profiles, and the supply of skills and capabilities and the ability to essentially have a much smaller set of building blocks to be able to respond to these changes. And that’s where skills come in, because if you think of that basic currency of work, Stuart, that we’ve known for the last 140 years, largely the job… And I’m not saying the job is going away anytime soon, but I think the need for a much more granular level of insight into the demand for capability as the world changes and a much better picture of the supply of those capabilities from the workforce. And that’s really, I think, what’s at the heart of this demand for skills, the need for smaller building blocks that can be deployed and redeployed at scale and at speed with much greater agility than the traditional, quote, unquote “high frictional cost model” of just merely relying on traditional jobs and the headlines that they represent.

Stuart Crainer:

I think skills is one of those things we all know what they are, but the way you describe them, Ravin, is as the building blocks of what work entails.

Ravin Jesuthasan:

Yes. Oh, exactly. And I think what the benefits, Stuart, of those smaller building blocks is we get to a much more comprehensive picture of what’s actually being demanded by changing business models and what’s actually being represented by the talent in our organizations. Because when we get to skills, we see the unique bundle of both technical and transferable skills. That’s Peter versus Britt versus you versus me. We don’t limit ourselves to the headlines of, well, Britt does X at Delta Air Lines, so she can only do X because that’s in her job description, or Peter is responsible for the SkillsEdge suite, and that’s the only thing he can do versus if I can have insight into all of the skills that Peter might have that come from his experiences having done a bunch of other things that come from the way he works within the organization, the way he collaborates with clients, et cetera, I get a much, much better view of his full potential. And then equally, I think, from a demand perspective as work changes, understanding exactly what’s being demanded and who might be able to actually perform that, be that human or machine, increasingly.

Stuart Crainer:

It’s a reinterpretation of what a job actually is and its role in delivering agility and the agility and resilience you talk about that, rather.

Ravin Jesuthasan:

Exactly. Yeah. And as you’ll hear from Britt, I think the work that Delta Air Lines has done of saying, “Yeah, the job is still the currency, but we’re going to have these smaller building blocks of skills, ensure a much more informed job architecture that makes it that much more effective at deploying and developing talent as the demand for those skills changes.” And I think that’s the interesting thing is we look at how this space is changing. And, Stuart, as you know, we’ve had this conversation for several years now; the demand for this is absolutely off the charts. The number of organizations implementing technologies, implementing architectures and strategies that are making skills the currency for work to ensure that work itself is more accessible, as well as the workforce itself that much more agile in meeting these changing needs, has just grown exponentially.

Stuart Crainer:

And this has been accelerated by the pandemic?

Ravin Jesuthasan:

I think the pandemic was just the tipping point. I think that the pandemic certainly brought into question the where and when of work and how skills could be deployed beyond just being in the same place at the same time. I think that has been accelerated even more, Stuart, by the climate crisis, because that has caused skill premiums to shift across the board, both in organizations affected directly by it as well as organizations who have maybe a more secondary or tertiary impact. Certainly, the big, big pivot that I’ve seen in the last 24 months has been the impact of generative AI and how rapidly it is shifting skill premiums across both white-collar work, but increasingly as we find gen AI starting to accelerate robotics, how that’s fighting its way more and more into some of the blue-collar work as well.

Stuart Crainer:

Talk a bit more, Ravin, because you talk about agility and resilience. And when I hear them paired together, I always think they push in different directions in organizations. We assume that a resilient organization is probably not that agile, and we assume that an agile organization is not that resilient. Can you explain how it works with skills?

Ravin Jesuthasan:

Absolutely. And I actually see the two as being prerequisites of each other as I suspect you do as well, Stuart. Because if you think of an organization that’s really built to last, it also needs to be built to change. And the way we think about skills is it’s addressing both. And this ties into this narrative around agility and resilience because what we’re being asked to do is bend the demand curve of work and the supply curves of work in a fundamentally different way.

And when I talk about bending the demand curve of work, what that means is thinking about how do we redesign work so that we’re enabling talent to flow to it as seamlessly as possible as it changes while ensuring that that talent has the means and space to keep reinventing itself in an era where we’re increasingly going to be asked to decouple growth from resource intensity? To me, that really builds results in a more agile construct but also a more resilient one in the face of rapidly changing demand, ensuring that we’ve got an operating model that is sustainable under multiple different scenarios. That’s the redesign of work. If that’s the bend, the demand curve phase, the bend, the supply curve is about ensuring work that is much more accessible to a lot more people, re-envisioning that colleague experience. We’re meeting more and more people on their individual terms, ensuring an ever more equitable, inclusive, and accountable culture. And I think both of those things address the push and pull, if you will, Stuart, of both agility and resilience.

Stuart Crainer:

And thank you to everyone joining us. We’ve got people from the UK, the US, Qatar, UAE. And we’re big in the Caribbean as well: Trinidad and Barbados. Really nice to see everyone joining us. Please send over your questions at any time during the session. Ravin, thank you. Where does this leave data, then? What’s the interaction with data in all this?

Ravin Jesuthasan:

Yeah. I think that’s why we wanted to start with this conversation, Stuart, because data is, A, not just foundational, but as you’ll hear from Peter and Britt, the demands of data are changing really quickly when we think about these smaller building blocks of work skills as opposed to just the headline of a job. When Tanuj and I were writing The Skills-Powered Organization, we defined three core capabilities of that skills-powered organization. The first was the ability to understand the demand signals of changing work. How is the external economy changing? How were our technology decisions evolving? How are threats from our competitors manifesting in terms of our demand profile? And what does that mean in terms of the skills being demanded? Data about the changing demand and translating that changing demand into very specific skill requirements.

Equally understanding the supply of those skills within the organization and the gaps that needed to be closed through the optimal design of work. Do we close those gaps with hiring more talent, developing people, deploying them differently through more agile pools? Do we close those gaps with more AI and automation? Do we close those gaps with external providers like gig workers or outsourcers, et cetera? What is the strategy for the design of work itself to optimize the demand and supply? Data on all of that, what we were calling work design.

The second key capability was around development. And do we have the insights into how to close those skill gaps that we’ve identified at scale and speed? Do we have the data on the optimal means for closing those gaps? An internship, an apprenticeship, the use of VR and AR over the course of work being performed, so continuously collapsing the learn to do cycle, traditional learning resources, you name it.

And again, I think what’s really important, Stuart, is that it’s not your grandfather or your grandmother’s development where we did it when times were good, we did it when we had a few dollars to spare, we did it when people had some time on the weekends. I think we’re increasingly seeing organizations be really intentional about development both in terms of building it into their strategic plans so it’s a part of the operating strategy, and then secondly, by ensuring that there is space for learning in the flow of work, because we can’t expect people to re-skill and upscale at the quantum and pace that is being asked for on their own time; when the kids are in bed on a Saturday evening or when they’re at a soccer game on a Sunday afternoon. Being intentional in the design of learning into the flow of work I think is really important.

And to the point about strategy, I think, Stuart, when Tanuj, you, and I talked the last time, we talked about some of the work that she’s done to show the board at Standard Chartered that they can actually save £50,000 per employee by upskilling in re-skilling talent from their sunset roles to their sunrise roles, as opposed to doing the old churn and burn that companies have done for eons. And I think that starts to make development a core part of the operating model.

And then the third part of this is the deployment of skills back to work. We’re not doing the development for the sake of development, but are we deploying those skills back to where they’re needed at scale and speed with efficiency, effectiveness, and impact? A bit of a long-winded way, Stuart, when we talk about the data requirements, I think the data has to address all three of those core capabilities. And it’s also why I think AI is so pivotal to meeting some of those data requirements, as you’re going to hear from Peter and Britt as we talk about the more practical applications.

Stuart Crainer:

Well, let’s bring you in now, Peter. How would you characterize the general level of maturity in the market for the ideas that Ravin’s been discussing, the appetite for this new form of data?

Peter Stevenson:

Yeah, thank you very much indeed, Stuart. I’ve been focused on skills for a number of years now. And I’ve had a lot of conversations during that period with clients. And I’d say that each company tends to be at a different place on its skills journey; has a different level of maturity around skills. And Ravin’s been describing some processes that would apply to companies that are quite a long way down that road. And it may be due to the part of the business that I work within, but I would say a lot of the companies that I speak to are probably fairly early on in their skills journey. They’re trying to figure out how to get started. Often, they’re going to be at the initial stage of creating a skills taxonomy, identifying use cases for becoming skills powered.

Across the market as a whole, I would say that the level of maturity is currently quite modest. But I would also say that companies are developing their approaches fast. And of course there are some companies who’ve been on this journey for some time and consequently are already well ahead of the curve. It’s a broad spectrum, but I would say that the market in general is at a relatively early stage on the skills journey, although we’re definitely seeing increased adoption and momentum.

Stuart Crainer:

I say that begs the question, Peter. Why? Why are they early in this journey? Because the notion of skills isn’t a new one.

Peter Stevenson:

No, you’re completely correct. And I think a lot of it comes down to some of the things that Ravin was mentioning earlier, not least of which is technology. Obviously the concept of skills has been around for quite some time, but up until the last few years we haven’t had the kinds of technological support… And I’m not going to start with AI, I’m going to start with things like HRIS, skills that will support skills. If you want to bring AI in, AI scraping of online job profiles that allow companies who have access to this data to develop market-derived skills taxonomies. I think talent marketplaces as well are a big part of this general trend. I think the technology has a big impact upon that and why skills is – compared to, for example, competencies – a relatively new approach.

Stuart Crainer:

Peter, why is a company so reticent to get started?

Peter Stevenson:

Yeah, that’s a really good question, Stuart. I think I mentioned in the offset that I run some research that we do, part of which is our Skills Snapshot Survey, which is an annual piece of research into skills practices in the marketplace. And when we look at that question or a similar question in the survey, the top three obstacles to becoming skills-powered were in descending order. We have a lack of HR capacity or capability. That’s 40% of respondents. We have too much change, which is 38%. And we have a lack of funding at 30%.

When you think about those three, it seems to me that HR capability and a broad reluctance to change are the driving forces here as opposed to the financial aspects. And I think generally, though, the journey to becoming skills-powered, it can seem overwhelming for organizations. Many companies are just hesitant to start. They just simply don’t know where to start in some cases. And if that sounds like you or your company, my recommendation would be to start small with a pilot. Figure out why you’re doing what you want to do and what success would look like and go from there. And assuming you achieve the success you’re hoping for, you can then roll that out to larger groups or other groups within the organization. And as I think I said earlier on, from my perspective, implementing a robust and validated skills taxonomy is really foundational if you want to do anything with skills.

Stuart Crainer:

How common is it to pay for skills today?

Peter Stevenson:

Yeah, also a great question. I would say that when we, within the skills product team, began our journey to create skills tools, which was well over five years ago, at that time, we felt that pay for skills was likely just around the corner, actually. There was a lot of interest in it as a topic amongst our clients. But what we found as time has moved on is that when it comes to specifically pay for skills, and I’m not talking about broader skills-powered approaches, pay for skills, the market has moved less quickly than we anticipated. And I think that reflects the fact that a lot of companies are actually still at earlier stages in terms of establishing a foundational skills taxonomy that’s linked to a job architecture.

Again, referring to the skills snapshot survey, one of the questions we asked is: does your company have any form of skills-based rewards programs? And about three-quarters of respondents said this year that they do not have a skills-based reward program in place, meaning that only about a quarter of our respondents are doing something in this space today. And also bear in mind that in my experience, there are relatively few companies that have implemented a skills-based reward program across the whole organization. It’s much more common to focus on little pockets where the need exists. For example, digital functions or data science or AI or roles that require people with AI skills. For these areas of the business where there’s a lot of tightness in the market around talent, pay is an obvious and a powerful lever that people HR can pull on to help address and fill those gaps from the external market. And I suspect that as time moves on and more companies get taxonomies in place and start to really experience the success across their skills-based use cases, we’re going to see the practice of pay for skills become more common and more formalized. Although whether or not it will really replace job-based pay, even in the medium term, I’m relatively skeptical. I think it’s going to be a supplementary practice that companies increasingly build into more traditional approaches to rewards.

Stuart Crainer:

Eldon Blackman’s got a comment. “Just for my clarification, are we referring to hard skills, soft skills or both? Ravin?”

Ravin Jesuthasan:

Yeah, I can take that one, Stuart. Eldon, we’re referring to both of them. In the skills-powered organization, we think about skills broadly as technical, what have traditionally been called hard skills. And we also think about what have been called soft skills in some organizations somewhat pejoratively as more of those transferrable and enabling skills, which as we’ve seen more and more AI come in, many organizations seeing a growing premium on those transferrable skills because the ability… I’ll go back to my example of Standard Chartered Bank, re-skilling talent from their sunset to their sunrise jobs, it places a much higher premium on the transferrable skills because the ability to teach technical skills is something that we can increasingly do much more efficiently. Teaching the transferrable skills often is what takes a lot longer and often can be far more challenging. But the short answer is that it includes both.

Stuart Crainer:

Thanks for the question, Eldon. Thank you, Ravin. Let’s come to Britt. Britt’s sitting there patiently in the executive lounge waiting for the flight to take off. Britt is a specialist in enterprise talent and skills at Delta Air Lines. Britt, how do these, the talk of skills, how does it resonate with Delta Air Lines? And what have you been doing in response?

Britt Alcala:

Yeah. Hi, everyone. I’m Britt Alcala. It’s nice to be here today to talk about Delta’s journey. And in response to that, Stuart, as part of Delta’s broader skills-first strategy, skills foundation will be impacting three major HR processes, the first being skills-based job sourcing. Employees will have visibility into the critical skills that are needed across Delta’s job architecture. Whether that’s within their current subfamily or if they want to move into another area at Delta, they can see those essential skills and be a competitive candidate in the future. The next element is skills-based development. As Ravin mentioned earlier, that linkage of learning to skills will provide a more targeted development experience for employees to be able to upskill and close any gaps that they have. And lastly is skills-based hiring. This is that connection point to our talent acquisition, which will allow us to identify internal talent through skills which we previously don’t have.

Stuart Crainer:

Everything is skilled oriented.

Britt Alcala:

Yes. As previously mentioned, it has truly become a common currency for us in HR. And it is really going to be the focus of a lot of our work streams, which is wonderful.

Stuart Crainer:

And what stage are you at then with this, Britt?

Britt Alcala:

We are at the point where we have completed validation. And I’m happy to walk us through what our process was because we did get to partner with Mercer through this over the last year. And so our process really started back in 2019 when compensation at Delta created Delta’s job architecture. And so for skills foundation, we are then taking that one step further and applying skills to the previously established job architecture.

And so back in 2023, we got to partner with Mercer Atlanta and basically had four major phases for our project plan, the first being Mercer mapping our Delta job and subfamilies to their Mercer skills library – Mercer skills library is skills that are aligned with the global market data, which is really important for us at Delta just to have industry best practice as our starting point for skills. And then secondly, internally we aligned on what our strategy and project plan would be. For us, that resulted in being five to 10 skills per subfamily as our goal. And then we discussed what type of skills we would validate for our respective areas such as merit versus scale populations. And then we did an internal initial review with our HR business partners and our talent acquisition to do an initial gut check on those Mercer skills library cuts for each subfamily.

But phase three was our validation stage. This is where we had the opportunity to really engage with 500 subject matter experts across Delta to validate the skills, provide definition feedback, and apply proficiencies to their respective subfamilies. And we partnered with the business to make sure that we had the appropriate subject matter experts who had enough tenure and experience to accurately speak to their respective subfamily. And then our personal team of the skills team at Delta did a quality control to conduct a holistic review of the skills taxonomy, whether that is updating skills definitions or consolidating skills as applicable.

And then the last phase was finalizing the skills. Once we completed the subfamily validation for each group, we would take that output and put it into an executive summary, which ultimately was shared with business leaders for their review and finalization. So, a really high-level process of what we did over the last year. It’s a lot of work and hard work we got to do in partnership with Mercer. But those were the key steps of our process, and we found it to be really successful in getting the skills validated for us.

Stuart Crainer:

And this is across Delta as a whole company?

Britt Alcala:

Yes. Both our merit and scale populations.

Stuart Crainer:

Okay. And how many people work for Delta?

Britt Alcala:

100,000.

Stuart Crainer:

Yeah, it’s a big deal. Barb Archer says, “How long has it taken Delta to get the job architecture in place and get the skills aligned?” I suppose another question from that, Britt, is how difficult has it been? What are the obstacles in the way? Have you had a big job convincing people? How open are people to-

Britt Alcala:

A layered answer… But first step into all of this is the job architecture. I can’t speak for Delta compensation, but that is definitely the first step that is needed to get to the skills foundation process. But Delta is a large company, so any company-wide initiatives can be met with hesitation, but we were really encouraged by the excitement across our leaders as they understood the positive impact this could have for employees at Delta.

But a few things to know before getting started is just the timing associated. As much as you can project plan as  like I said previously, it was 2023 into early 2024 was really the time that we validated skills  and as much as you can project plan and be organized, you’re ultimately dependent on the business capacity to support and participate in this project. Just remembering to stay agile and adjusting as needed to just make sure that the validation process is done right will create more accurate results as ultimately this is a long-term investment and taking the time to do it right is really important.

Stuart Crainer:

You say it’s a long-term investment, Britt. What kind of time scales are you working to?

Britt Alcala:

Yeah, we are preparing for a talent hub launch of next year. And just high level, this will be an opportunity where employees can have visibility to their skills, skills across all of Delta subfamilies and have that connection point to the learning and development tied to skills. It’ll be a great opportunity for employees, but it’s coming down the road. But all this great, hard work that we have been doing and partnering with our key HR stakeholders will be a part of a broader talent hub is what we’re calling it.

Stuart Crainer:

Okay. Is a good name as any. Nicolene Hogg has a very precise question. “What tech platform are you using?”

Britt Alcala:

Our current HRSD system is SAP, so that’s the system we’re utilizing.

Stuart Crainer:

Okay. And tell us more about the talent hub. That seems to be the core of what you’re trying to create, isn’t it?

Britt Alcala:

Yes. We are just one element of the talent hub, so I don’t want to necessarily speak too much about talent hub but more on skills. But it’s going to be a great opportunity of all of our shared efforts across of HR from the skills being at the core to the learning development opportunities to just the visibility which will create that employee career ownership and just knowing what skills are critical across the enterprise and how that they can have that linkage to learning and really upskill to be competitive in the future. This will just really be a transparency that’s new for us and will be a great tool for employees to utilize and really shape their career out.

Stuart Crainer:

Ravin, how does what Delta has done fit in with your… Because Delta is where the rubber meets the road for the ideas we’ve been talking about.

Ravin Jesuthasan:

Yeah. Stuart, I really love what Britt and her team have done because what she’s described is where many organizations start. How do we make our jobs better? How do we make our jobs better markers of the way talent can be developed and deployed? How do we ensure that our jobs send better signals to people as it relates to what skills are demanded, where their next move might be? Everything that Britt’s with the talent hub of having skills then really be the currency that knits together multiple aspects of the human experience of work, whether it’s the jobs they sit in, whether it’s where they might move to next, whether it’s the skills they acquire, whether it’s ultimately potentially how the changes in compensation, et cetera. All of that, an opportunity to knit it together with skills as the currency for work.

And I’ll go back to something Peter said, I think we might have lost him there, but many of the organizations we work with really start with: let’s make our job architectures more skills-powered. That often is the starting point because you’ve got an infrastructure in place and you’re exponentially increasing its effectiveness. That then starts to bleed into perhaps, Britt, without knowing all of the details of the talent hub, but where we see organizations using technology, whether it’s the marketplace that is in SAP versus Glow or Eightfold or whatever the platform might be, organizations shifting to then say, “Based off the good work that we’ve done to update our job architecture with skills, let’s create flexibility so people have an opportunity to express their skills in different domains.” They’re still in the job, but the signalling we give them and the opportunities we give them to take their skills, maybe it’s programming skills in IT, and take on a project in HR, or someone who’s sitting in finance and helping IT build a new financial planning module and being able to deploy those skills more flexibly across the organization.

And Stuart, this goes back to your question about agility versus resilience because I’m now resourcing work in an ever more agile way, leveraging the, quote, unquote “soft skills.” The experience, the critical thinking, the knowledge of how to get stuff done in the Delta environment, the knowledge of Delta systems. And I’m leveraging that because I might be, again, that person in finance who’s helping IT build a new financial planning module, and so I’m deploying my technical skills, leveraging all of my transferable skills to ensure a much speedier, more impactful outcome. And I think that’s where you start to see the pivot in the organizational model from these fixed roles which are much more effective with skills to a more flexible construct to ultimately what I think of as being agile on steroids, a flow type model where it’s more of an marketplace where skills are continuously flowing to work.

But again, that journey takes a long time, but the foundations that Delta has put in place absolutely set them up for success. And I think they’ve just done it incredibly well with engaging all of the stakeholders. And as you can appreciate, Stuart, it’s no mean feat when you’re talking about 100,000 people including populations that are not your traditional merit, not your traditional, quote, unquote, “white-collar” populations, when you’ve got a diversity of talent. I think it’s just been done masterfully.

Stuart Crainer:

I would take that compliment, Britt. It seems to me it’s the openness, the transparency and that fluidity you are talking about, Ravin, is really the attraction. Is that right, Britt?

Britt Alcala:

Yes. It will allow employees to see what skills are necessary or give them the structure to have a baseline of how they can upscale to be competitive in the future. Today, if you wanted to move around Delta, it can be pretty intimidating because it’s such a large company, there’s so many various areas you could take your career, and so the skills will really allow employees to see where else their current skills or previous skills that they used at other jobs but aren’t currently exercising could be successful and tap into future job opportunities.

Stuart Crainer:

Very precise question. “Has Delta captured any significant metrics on the ROI for the movement to the skills-powered organization?” Or is it might be too early in the process.

Britt Alcala:

No, it’s okay. For our team, we really measured success for us personally as a skills validation team for completion of skills validation, and then leader sign-up of those skills. Long term, the success of the project will be giving our people at Delta the right tools to find and develop the best talent which will be provided through Talent Hub, so more to come on the KPIs of that system. But for us, it was really just getting all of the validation process done across Delta, across all of our subfamilies and job families and then getting that leader and sign-off was really a great checking point for us.

Stuart Crainer:

What surprised you along the way, Britt? Your experience in this field, you worked with Mercer earlier in your career. What surprised you on the process?

Britt Alcala:

Like I said earlier, just probably the receptiveness of the company and the buy-in and excitement. This is something that is new and was new for us at Delta. And it was taking a leap into the unknown and then working with the subject matter experts, getting to hear from them their genuine excitement and seeing the full potential of the future roll out of this. And then having that leader buy-in is just reaffirming all of the hard work that skills validating is and the future connection points to our fellow HR partners and how this is going to really change and provide potential connection points for us as key stakeholders and just collaborators has been an opportunity and just a happy ending for all this hard work that we have done and really just looking forward to employees getting to use it and take it and roam with it, as ultimately this is a voluntary tool and, so it’s really based on employees wanting to know more about their career, wanting to upskill, do that personal development, and really take ownership of their career.

Stuart Crainer:

Danny Wareham has got an interesting point, which I think you alluded to, Britt. He says, “The discussion has focused on employees with an inference towards the operational areas. Are these skill-based models and suggestions applicable to and utilized by the C-suite? If so, how has adoption been at Delta?” I think, Britt, you were talking about buy-in from the leadership.

Britt Alcala:

Yeah, great question. For our initial skills validation, we were really prioritizing IC, individual contributors, up to GM or general manager. This isn’t really targeting executives, director plus at this time, but it is still relevant as a majority of those individuals manage people who are below them. This will help be targeted conversation points to work with their employees to work towards any gap areas of skills. But at this time, it was really just targeting that IC to GM population. We made sure that the skills that were included on each subfamily were relevant and truly essential for each subfamily and not too position specific or too niche.

Stuart Crainer:

Thank you. Eldon says, “It’s interesting how even though Delta as a workforce of 100,000 three key things still stand out in their success: leadership buy-in, employee engagement, listening across the organization.” Thank you, Eldon. You’re doing my work for me. But does that ring true, Britt? Those three elements do seem key.

Britt Alcala:

Yes. To even get started just in skills foundation in general is just making sure that you have the right business case for it for why you want to become a skills-powered organization. And then, like he said, that leader support and the org readiness is really key to making this a successful initiative.

Stuart Crainer:

And Deepika says, “How did you incorporate future skills in your skills framework?” Which is-

Britt Alcala:

Great question.

Stuart Crainer:

… quite a nice question. Thank you, Deepika. Good one.

Britt Alcala:

Yeah. First of all, to even get the skills list, the most important thing is to make sure you have the right skills mapped to the right subfamily. To accomplish that, we partnered with around 500 subject matter experts across Delta to just make sure our initial taxonomy was relevant and accurately represented the needs of each subfamily. For an evergreen strategy, it is important to establish ones to update the skills over time. We will be refreshing the skills taxonomy and responding to the business needs so that as Delta grows and adapts, so will the corresponding subfamily skills. And listen, this will just help us create a more comprehensive and accurate list that is consistently used by all and plays into the long-term plan of this. And so I don’t want to speak for Mercer, but they refresh the skills library on a quarterly basis, so we will be utilizing that and then skills from the business to make sure that our skills lists are updated and reflective of what it truly means to be in a said subfamily.

Stuart Crainer:

Which leads seamlessly to next question from Ralph, which is another good question. “How many skills does Delta manage in their skills library ontology? And how do they support employees to get an overview?”

Britt Alcala:

Great question. For each subfamily, we had around five to 10 skills for each. It varied depending on the subfamily, but in total we have probably around 130 subfamilies in total. And so we have a composite of potentially 550 to 700 skills depending on the certain area and just our total skills taxonomy in addition to both the scale and merit. We did a different approach for scale just in the instance of there are more high volume known jobs, so we were able to go a little bit deeper, write more of those position specific skills. Meanwhile, on the merit side, we kept it to that five to 10 skills as there are various positions. And we focus more on the subfamily essential skills on that side of the house.

Stuart Crainer:

Nicolene has come back with another question. “Besides mobility development, et cetera, what are the other business benefits objectives?” I think you’ve covered this, Britt, but good to reiterate.

Britt Alcala:

Yeah. I’d say it really impacted two other key areas. One is going to be the hiring manager experience. It will be enhancing the hiring manager experience by creating consistency through the subfamily skills, which will ultimately attract more qualified candidates through clearly identified skills. Previously if you are hiring on your team, you would work with talent acquisition and create said list of skills, but with this skills foundation, each subfamily will have a baseline of skills to start from. That will help us on the consistency end and just making sure all of our open job recs have that baseline of skills. And then the second one, as I mentioned before, is just the career ownership, the transparency to skills across Delta which will allow employees to see what skills are required and how they can upskill and strengthen accordingly through our learning and development opportunities.

Stuart Crainer:

Okay, Ravin.

Ravin Jesuthasan:

Sorry, sorry, I just want to jump in just on that question about the business benefits because it’s come up a couple of times. We typically are also seeing once you’ve got these processes in place like Delta, five really significant benefits. One is a fairly immediate one around just the reduced time to fill; the time to be able to fill open roles, open requisitions. Every CHRO I’ve ever talked to in my 30 plus year career has said, “All our people tell us it’s easier to find a job outside the company than within the company.” And what Britt has just described squarely addresses that problem. Reduce time to fill.

Second is much greater visibility into the talent we have today and all of those skills that we have in the organization. And I’m always surprised by how shocked people are even on their direct teams, “Boy, I didn’t know that she had those skills or he had those skills.” And that’s the sort of stuff that’s gets unearthed when you start moving towards skills as the currency.

The third is a much better lens, if you will, for understanding the shift in demand for work. What work is emerging, what work is declining? And Britt alluded to that when she talked about the process of getting these 100 experts to provide input because you’re making it really crisp and clear about how the work is changing. And what  skills are required As opposed to telling me I need to hire a data scientist. Because that’s the old blood instrument approach, which unfortunately we no longer have the luxury for in many instances. Get really precise about how’s the work changing? And what does that mean for the skills required?

The fourth big benefit as you think about this transition from fixed to flex to flow roles of work is that agility often giving rise to much higher levels of labor productivity in organizations. We have some great examples of the pretty dramatic increases in productivity. And then the last big benefit, Stuart, is just speed and agility to come full circle to where we started from. The speed and agility with which we can redeploy skills across the organization as the demand changes is another significant benefit that companies are starting to realize.

Stuart Crainer:

A few more questions coming in. Andrew says, “How are you measuring the skills proficiency on an employee level and validating it?” That one’s for you, Britt.

Britt Alcala:

Great question.

Stuart Crainer:

I suppose it’s one thing talking about skills, and people may profess to having them, but how do you measure that?

Britt Alcala:

We are utilizing Mercer’s proficiency scale. It’s a scale of one to five with beginner all the way up to expert. And so as part of our validation process with the subject matter experts, we had them apply proficiencies once we aligned on a final list of skills for their respective subfamily. And so we have cascaded those proficiencies to all applicable grade levels. Whether you are a grade five all the way up to a GM, obviously depending on a certain skill, there’s going to be a range of what proficiency level is expected at that hiring. We do have proficiencies, and we have them for all of our skills. And this will also be visible for employees in the talent hub that’s rolling out next year so that they can see where they measure up to a baseline and improve over time. But for our initial rollout, it is not going to be tied to performance management as this is just going to be visibility into the skills for the first time. But that’s definitely an opportunity in the future to have it be more of a measured tool.

Stuart Crainer:

Thanks, Britt. And thank you for some really excellent questions here. And Danny’s got a good point, which I think is for Ravin. “Data show that tenure and loyalty and employee satisfaction are higher when we are stretched in our roles with an opportunity for autonomy and development. This implies that we might benefit from hiring individuals that fit most but not all skills requirements.” I think he’s suggesting there’s got to be a degree of flexibility in our interpretation. What are your thoughts?

Ravin Jesuthasan:

Completely agree, Stuart, because I think so much… And I think that’s the other benefit of moving to having this whole person view, if you will, all of the things, all of the skills that Britt has, not just her technical skills. Because I think so much of traditional hiring has been I need a data scientist so she has to do Python or Julia AI. And we limit that person to the box we’re trying to fill today as opposed to understanding what are the future requirements of the organization and hiring someone who can be relevant three to five years from now? Because the technical stuff is the stuff that’s really easy to teach.

And I think that’s where the work that Tanuj did, Stuart, was really compelling because in that headline of We Can Save $50,000 was an incredibly nuanced narrative of, well, the folks we’ve brought on board have the transferable skills of working in our culture. They have the skills of working in our systems. They’ve got the networks, et cetera. And it’ll only take us three months to teach them some of these new financial skills versus we could go out and hire someone who’s doing that work at a competitor today, and it might take him or her two years to understand how to work in our culture, in our operating model to get things done with the same level of productivity. And I think that’s the calculus that becomes visible when you’ve got these building blocks of skills.

Stuart Crainer:

Tanuj has put the ideas to work at Standard Chartered. Can you just reiterate the $50,000 thing, Ravin? Because I think it’s such a killer statistic. It’s worth making it clear.

Ravin Jesuthasan:

Yeah. Absolutely, yeah. What she’s shown her board, and this is in the book as well, is that as Standard Chartered Bank transitions its operating model towards financing the transition to net zero for their customers, as we’ve seen with many financial services, they can save £50,000 per employee by transitioning people from the sunset parts of the organization, the sunset roles, the parts of business that are changing, where the demand is falling off because of AI and self-service or the bank’s getting out of particular businesses towards these growth areas as opposed to doing what companies have always done, which is every seven or eight years I’m going to fire a bunch of people over there with legacy skills and go ahead and hire a bunch of people with these new skills that I need. And if you think of all of the consequences of those choices, the impact on the culture, the impact on the organization’s knowledge and being able to manage the flow of knowledge, that’s really what’s captured in that £50,000 headline.

Stuart Crainer:

Yeah. Amazing statistic. Raju has got a comment, which I think is probably important. “Does head of learning or chief learning officer need to have a strong technical background together with business soft skills? Companies in the size of 50 to 2,000 don’t have the required leadership to take on such tasks.” I suppose the question there Raju’s getting at is who takes the lead? If you are a smaller organization who takes the lead? But then again, in Britt’s situation at Delta, who are the people taking the leading this? Britt, perhaps you go first and then Ravin can contribute.

Britt Alcala:

Yeah, sure, I’ll start. For us at Delta Air Lines, we on the talent management team became the skills team. And we did the skills validation process, which we took the job architecture from compensation, worked with Mercer. And with these skills, we have shared them with our HR partners such as learning and development, who then created content based on those subfamily skills, and then also our talent acquisition partners so that they have it in alliance with their hiring platforms and so that they are able to use the skills for hiring talent. And so making sure all of those key stakeholders are in a part of this and a part of the process the whole way will ensure ultimate success as it does impact various work streams. And making sure that they’re along the ride from the beginning is really crucial for ultimate success.

Stuart Crainer:

Ravin?

Ravin Jesuthasan:

Yeah. Stuart, I think in smaller organizations, my experience has been that it often can be a lot easier. Because Britt has to navigate a whole host of stakeholders and legacy and infrastructure. What we’ve seen, Peter and I in our work with smaller organizations, often it’s chief talent officer, head of HR who leads this. They start off with a series of pilots to pick some job families that are moving really quickly because of changing demand, et cetera to say, “Look, we need better visibility into the changing demand for skills, so let’s ensure that we’re starting with a subset of the organization where the velocity of change is greater. Let’s then take that lesson learned and ensure that our business leaders are tracking with us.” And they start with taxonomies Mercer’s, like the World Economic Forum, et cetera as a way of just getting started.

But what we also find in smaller organizations, that mobility of talent often is much greater than very large organizations because people can look across… I can look across to you, Stuart, and know the work you’re doing versus Britt who’s sitting on the other side of the hall for me. And there tends to be a model of cross-resourcing and cross-skilling in smaller organizations just because of scale and size where you don’t have the degree of specialization and focus that a larger organization would have. I actually think it’s a lot easier to get going and to make things happen in small organizations because of just the lack of scale and complexity.

Stuart Crainer:

Nice to see you again, Peter. Sorry about the technical difficulties. Let’s fire a question in your direction. This is from a LinkedIn user. “On one side, we’re looking to have a agile workforce upskilling via company or self-driven. And on the other side, we’re expecting employees to develop skills based on skills proficiency matrix. How do we strike a balance?”

Peter Stevenson:

Great question. And by the way, I’ve missed a… As you know, I’ve had a lot of technical interest here, so I’ve missed really the content that the others were sharing here. From our perspective, having a proficiency framework in place is a really important part of actually unlocking the benefits of a skills taxonomy. Creating that taxonomy in the first place is your foundation layer, and that links ideally to your job architecture, which gives you a sense ideally of the skills that are expected for a given job. But of course it doesn’t tell you the level of expertise that an individual has versus those skills, and so that’s where the proficiency framework comes in and typically some form of measurement of the employee’s level of proficiency against that framework for those skills, whether it’s employee self-reported and manager validated or 360 type assessment or formal assessment tests. Yeah, I would definitely say having a proficiency framework in place is an important part of really delivering against the value proposition of skills-powered approaches and skills taxonomies.

Stuart Crainer:

And Peter, how do you think these things are going to play out? If we look one year, three years, five years ahead… Is the organizational world going to embrace these ideas to a much… To what extent are they going to do so, do you think? Because there needs to be some movement between organizations and the old legacy job market  or way of looking at the world  will carry on to a greater or lesser extent.

Peter Stevenson:

Yeah, completely. I wouldn’t say for a minute that traditional job-based approaches or even necessarily competencies are going away. I think this is a general drift towards skills, but I think skills are being overlaid on top of traditional approaches and interwoven with them, so potentially a few years down the line as the technology continues to improve, as the data continues to improve, and also as the… Because when you transition to becoming a skills-powered organization, this takes time and it requires a cultural shift. As organizations’ cultures develop and mature, I think we’re going to see a general progressive progression in that direction where skills-powered approaches become an increasingly proportionally representative part of the overall approach. Skills are here to stay, and they’re going to get bigger over time, but I don’t see anybody really pivoting away from jobs and ditching skills in the short term.

Stuart Crainer:

And Barb Archer has got a very brief question. “How would you explain the difference between a competency and a skill?”

Peter Stevenson:

Yeah, again, a great question. And I’ll start by saying that there’s really no even universally accepted definition of what we mean by competency or skill. But the way that we look at it or the way that I look at it is that a competency is like a much bigger, broader basket than a skill. Skills are much more granular. And they go down to a level of specificity that competencies historically wouldn’t match. Some people feel that competencies fall more on a particular side of the skill type house, but I feel personally it’s about level of granularity and specificity.

Stuart Crainer:

Okay, yeah. Thank you, Peter. I see, I was interested, Ravin, when you were laying out the free capabilities about the understanding demand signals. It always seems to be something organizations are particularly bad at. You can see that development closing the skills gap, there’s a lot of talk about that, a lot of money goes into it and the deployment of skills, which is what we’ve been talking about largely, but the understanding demand signal seems a real difficult area for companies to understand.

Ravin Jesuthasan:

Yeah, sure. Of the three areas that we looked at and defined, it was that first piece of that work design, understanding the demand, understanding the supply, and then orchestrating the optimal combination of solutions to get the work done. It was the demand signals that frankly were really bad at getting timely and accurate signals because very often when HR gets a request for, “I need someone with Julia AI skills,” well, it’s because the demand for Python has waned so much and we’re now seeing our competitors shift. And managers react often after the fact. And that’s one of the benefits, I think, if you’ve got a skills-based approach and getting really crisp and clear about how is the work changing? And what skills are required to do that changing work? It forces a conversation, as Britt has done with her experts, as she talked about, the 100 experts, forcing that conversation and ensuring it’s a continuous conversation because the work is going to keep changing. There are going to be new ways of getting things done, new technologies, et cetera, which are going to shift premiums around having a methodology to consistently get a robust articulation of when that changes and translating that to skills quickly I think is incredibly important.

And this is where Peter and I might disagree a little because I actually see organizations starting on the skills journey, gosh, going back to when I was working with Unilever in 2017 where they introduced the skills marketplace and today have 70,000 people on that marketplace. Companies have started on this journey for a while, and I think what we see is when they’ve got robust foundations like Delta Air Lines, like Unilever, the journey accelerates quite exponentially, Stuart. And what you get as you move from that fixed to flex to flow models is you get much earlier demand signals and you get much more precise demand signals that you can translate into specific skills requirements rather than the age-old thing of, “I need a Python developer. And I need to go get this person because something has changed.” And I think that’s something that organizations are just not very good at. And unfortunately, that, quote, unquote “not being very good at” thing gets exposed in an environment where the velocity of change is just so much greater.

Stuart Crainer:

We’re nearly out of time. Britt, final word from you. Where are you on your journey? You’re an airline after all. Are you in the executive lounge or taxi-ing on the runway? Where do you feel you are?

Britt Alcala:

Yeah, we have obviously completed our validation process, so we are gearing up for the Talent Hub launch. But the words of advice for those who are looking to embark on this journey is once you have job architecture, just a few reminders is the timing, taking the time to get it right, ensuring the right people are involved, whether that’s subject matter experts, leaders, the business, having that connection to technology, the impact to your HR partners such as talent acquisition, comp, L&D. But ultimately getting that leader buy-in across the business will help you be successful in the end.

Stuart Crainer:

Brilliant, Britt. Thank you for sharing your story. That was really great.

Britt Alcala:

Of course.

Stuart Crainer:

Really great practical stuff. Peter, you get the final word. You feel optimistic?

Peter Stevenson:

Do I feel optimistic? Yeah, I feel super optimistic. Like I say, there’s I think for companies who are yet to get started or are quite early on in their journey, of which there are quite a few out there, if that feels like you, don’t worry because a lot of companies are in the same place. But I’d also say don’t delay too long as there’s also, to Ravin’s point, plenty of companies out there that have been on the journey for a little while and now make great strides forward to their advantage.

Stuart Crainer:

Brilliant. Thank you, Ravin, Peter, and Britt. That was a great discussion. Thank you everyone for joining in. Some really great questions from around the world. Really appreciated them.

Please join us for the next webinar in this series. That will be at the same time on September the 18th and will feature Lauren Mason and Jessica Kennedy from Mercer, along with Jennifer Acosta from Kenvue talking about how to make job architecture’s future fit. And finally, a reminder that Ravin’s book with Tanuj Kapilashrami, The Skills-Powered Organization, can be ordered now. Thank you, everyone.