What does it mean to be a skills-based organisation?

In our latest Business Psychology Forum webinar, panellists discussed the importance of developing a skills-based organisation (SBO) to leverage diverse talents, empower their workforce, and foster meaningful work. Doing so successfully means shifting priorities, reframing skills, and incentivising leadership to own the programme of change. However, resistance to change and entrenched mindsets can pose challenges.

In this article, we share insights from our expert panel: Laura Ball, Senior Director of Learning Science at Multiverse; Natasha Oakley, Director, People Strategy and Insights; Mark Dearnley, serial CIO and former Chief Digital Officer at Inchcape.

What is a skills-based organisation?

A skills-based organisation (SBO) moves beyond static job titles and roles to prioritise adaptability and agility. Work isn’t defined by fixed hierarchies and job titles, but rather the tasks and outcomes that the organisation wants to achieve. Employees are valued and deployed based on their capabilities, with fluid talent allocation that allows people to contribute across departments and projects based on their strengths. At the heart of the SBO is a culture of continuous learning and upskilling, supported by leaders.

The benefits are clear – tasks are completed by those who are best placed to do so, without a rigid attachment to set roles and responsibilities. Skills allocation is flexible, with people empowered to play to their strengths.

Shifting priorities helps to future-proof organisations

An SBO approach deploys talent where it’s needed most while equipping the organisation with the ability to quickly tap into adjacent skills and create more transparent pathways for employees. An SBO doesn’t just help businesses pivot swiftly – it empowers workers to build careers that align with changing market demands.

In this environment, it’s important to be cognisant of employee wellbeing. Individuals with a range of strengths may be able (and willing) to work on multiple projects and deliverables. Their efforts and ability need to be rewarded, with their time carefully managed to avoid burnout.

The Bank of England, for example, has shifted its resourcing strategy to building talent within the existing workforce, with a specific focus on AI.  A conscious, organised effort towards reskilling helped to make the workforce feel like they were being championed and invested in.

Skills-based organisations produce skilled individuals

With the average lifecycle of technical skills such as coding languages and tools becoming shorter and shorter, employees will be expected to reskill multiple times throughout their careers. Recognising the pace of change normalises lifelong learning, boosting engagement and retention. A key tenet of the SBO is framing skills as portable and personally valuable. And this can open doors, both at the specific organisation and in future workplaces.

By giving people control over their development, and recognising and rewarding transferability, SBOs foster employability, engagement, and trust with their workforce. Panellists discussed the use of industry standards, competency frameworks, and open-source tools to benchmark and validate skillsets during their organisation’s transitions. These tactics boosted confidence among their employees while recognising skills across roles, functions, geographies, and the external market.

Technology platforms are fundamental to tracking, developing, and optimising skills. Whether integrating new systems or maximising existing ones, data needs to be accessible and actionable – connecting workforce planning, talent management, and ongoing development through relevant career pathways or tailored upskilling. Data platforms need to be able to anchor relationships between the workforce, managers, and senior leadership to ensure skills data is utilised across all organisational levels and functions.

Leaders are the catalyst for skills-based organisations

Successful skills-based transformation requires more than HR policy. Professional leaders and heads of function can smooth the skills-based transition by taking ownership, championing skills development, and collaborating with other heads of professions within the organisation to identify both shared and specialty skills gaps across departments. This drives cross-functional agility, allowing skilled personnel to be deployed across different departments. Panellists shared that a cross-functional approach leads to a positive ‘fear of missing out’ among less engaged departments, helping to drive wider change.

Kickstarting your organisation’s skills-based journey

To round out the discussion, panellists offered top tips for embarking on a skills-based journey. Their advice? Start small, push on open doors, and aim for proof of concept in your initial planning. Then, be clear on what skills you specifically need to realise your strategy. From here, build networks with other professionals and organisations going through the same transformations, to learn more from each other. And, finally, get leadership on board, making success an incentivised objective for senior leaders. Together, these strategies turn skills into success.