Skills-Based Organisations

Understanding the Rise of Skills-Based Organisations

In a world defined by constant technological disruption, shifting market demands, and evolving workforce expectations, organisations are re-evaluating how they structure work and develop people. Increasingly, leading companies are turning to a skills-based approach that views work not as a set of static job titles, but as a dynamic network of tasks matched to people's skills and potential.

According to Deloitte's global research, fewer than one in five organisations today apply a skills-based model across their enterprise, yet the ones that do are already realising greater agility, engagement, and performance. PwC's 2025 study similarly highlights that organisations placing skills at the centre of their strategy are constantly scanning the environment to identify emerging skills crucial for success, enabling them to remain resilient and innovative even amid disruption.

What Is a Skills-Based Organisation?

A skills-based organisation (SBO) reimagines the traditional hierarchy of roles, job titles, and qualifications. Instead of defining people by their positions, it focuses on the capabilities and the skills they bring and can develop.

Deloitte defines skills broadly to include:

• Technical skills such as programming, data analysis, or accounting
• Human capabilities like communication, critical thinking, and emotional intelligence
• Potential and adjacent skills, latent qualities that can be nurtured for future growth

This approach reflects a fundamental shift in how organisations view their workforce: not as a collection of roles, but as a diverse ecosystem of people with evolving skills, passions, and motivations. As Anish Singh, Head of HR for Unilever Australia and New Zealand, put it, "We're beginning to think about each role at Unilever as a collection of skills, rather than simply a job title."

Why the Shift Matters

The motivation to adopt a skills-based model is not merely theoretical; it is driven by measurable business needs and workforce expectations. Deloitte's 2024 global human capital survey highlights several key findings:

• 85% of business executives are planning or considering redesigning how work is organised so that skills can be flexibly deployed across projects and teams.
• 61% cite emerging technologies such as AI and automation as primary drivers for adopting a skills-based approach.
• 71% of workers say they perform tasks outside their formal job description, a clear indication that rigid job architectures no longer reflect how work actually gets done.
• Only 24% say they do the same work as others with the same job title and level.
• 79% of executives believe an organisation's purpose should include creating value for workers as human beings, yet only 27% of workers feel this is happening.
• 64% of employees say they would stay longer in a human-centred, skills-based organisation.

The conclusion is clear: understanding, developing, and deploying skills not only improves operational efficiency but enhances retention, engagement, and culture.

The Business Case for Skills Transparency

Skills transparency, knowing what skills exist across your workforce and where the gaps lie, is a cornerstone of a successful SBO.

According to PwC's 2025 report Transforming Work with Skills-Based Organisations, placing skills at the heart of organisational design creates transparency around workforce capabilities, empowering organisations to make smarter talent decisions and driving agility and innovation.

• Optimise workforce planning
• Respond to change faster
• Empower employee mobility
• Enable targeted learning and development

Such outcomes translate directly into improved efficiency. The Organisation for Economic Co-operation and Development (OECD) has previously shown that when workers' skills are well utilised, productivity and innovation rise while turnover and disengagement decline.

From Concept to Practice: Building a Skills-Based Model

Becoming a skills-based organisation requires both cultural and structural transformation. Deloitte identifies three stages that organisations typically progress through:

• Recognising skills as assets
• Building a skills framework or taxonomy
• Applying skills intelligence

Yet only 10% of HR executives report that they currently have an effective skills taxonomy in place, even though 85% say they are actively working on it.

PwC reinforces this point, describing skills not just as attributes but as a new currency, a measurable, tradeable asset that underpins workforce transformation. In this model, skills data informs every aspect of workforce planning: recruitment, deployment, learning, and succession.

The Value of Being Skills-Based

The benefits of a skills-based organisation extend beyond efficiency. They include:

• Agility: The ability to pivot quickly in response to change
• Inclusion: Broader, more diverse talent pools
• Engagement: Greater motivation and belonging
• Innovation: Cross-functional collaboration and creativity
• Sustainability: Continuous development and redeployment of talent

In short, skills-based organisations are not just more efficient; they are more human-centred, more adaptable, and more prepared for the future of work.

Looking Ahead

The evidence is compelling: while only a small proportion of organisations have fully adopted a skills-based model, the momentum is growing fast. As AI, automation, and shifting workforce expectations continue to redefine work, understanding the skills within an organisation and how to use them effectively will be one of the most critical determinants of success.

The question for every organisation is no longer whether to become skills-based, but how soon they can start.

References

Deloitte (2024). The Skills-Based Organisation: A New Operating Model for Work and the Workforce.
https://www.deloitte.com/us/en/insights/topics/talent/organizational-skill-based-hiring.html

PwC (2025). Transforming Work with Skills-Based Organisations.
https://www.pwc.de/de/strategie-organisation-prozesse-systeme/nextgen-hr/pwc-skills-based-organizations.pdf

OECD/ILO (2018). Better Use of Skills in the Workplace: Why It Matters for Productivity and Local Jobs.
https://www.oecd.org/publications/better-use-of-skills-in-the-workplace-9789264281394-en.htm