Published : 4 weeks ago, on 14/11/2024

Vincent Belliveau, Chief International Officer, Cornerstone

By Vincent Belliveau, Chief International Officer, Cornerstone

The world of work is changing at a breakneck pace, leaving many organisations having to keep up. As a result of the acceleration of change, the skills gap is widening, employee expectations are becoming misaligned with business objectives, and very often workforces are falling behind. These persistent challenges are impacting organisations globally, with significant financial consequences. According to a Korn Ferry study, the loss of talent and inability to pivot quickly and become productive faster, results in $8.5 trillion in unrealised revenue. When combined with the costs of talent turnover, this amounts to a staggering $14.3 trillion in talent and revenue losses worldwide.

High-performing organisations with agile workforces are prioritising skills development and leveraging skills data across HR systems to increase efficiency and foster growth. This approach allows companies to redeploy resources faster and more efficiently, train and upskill comprehensively, align employees to company goals efficiently, and recruit more effectively —all while reducing operational costs.

Skills Development in building agile workforces

At the heart of workforce agility lies skills development. Forward-thinking business leaders recognise the need to engage, develop, motivate, and nurture people – building their skills to unlock potential. By closing critical skills gaps, organisations can stay ahead of change, outpace competitors, and drive revenue growth while simultaneously reducing costs associated with external hiring and turnover.

However, a significant gap exists between top performers and laggards. More than 90% of employers that have a highly agile workforce are offering adequate training to their people compared to about 36% of those that don’t have a highly agile workforce. This disconnect highlights the urgent need for more effective, targeted skills development initiatives.

Implementing high-quality upskilling programmes yields major organisational benefits and cost savings. Properly trained workers are 86% more likely to describe themselves as adaptable to change. The financial implications of prioritising skills development are equally compelling. Companies that have already begun prioritising the development of critical future workforce skills were 44% more likely to have revenue increases over the last year compared to those that plan to develop those skills sometime over the next three years. Moreover, organisations with a formal, actionable plan for future readiness were twice as likely to have productivity gains over the last year compared with those without such a plan. These findings underscore the tangible, bottom-line benefits of investing in workforce agility and skills development, reinforcing its role as a key driver of organisational success.

What’s important to note is that while skills planning ensures organisations are future ready, developing high performing teams now is critical to outperform competition today, not just for the future.

Skills data to inform talent strategies

Most organisations do not effectively use skills data or talent intelligence to inform their talent strategies. But those that have more effectively adopted skills-based approaches – to gain a comprehensive view of the capabilities of their global workforce, including employees, gig workers, and their supply chain – are building organisational models that better align to their organisations’ needs and workers’ expectations, today.

Take a global pharmaceutical leader with over 68 000 employees, as an example, whose aim was to streamline their talent architecture. Their goal was to define skills across 5,000 + roles while reducing time and cost associated with managing talent architecture manually. However, they lacked visibility into current skills internally, were incurring recruitment costs for roles that could have been filled internally and had non-unified language of skills across existing HR tech stack.

The solution? Implementation of a system that could:

• Automate the translation of static job descriptions into dynamic, skill-first definitions
• Complete and verify global skills lists and map to the company’s job catalogue, requisitions and learning content
• Enable continuous and automatic translation from real-time labour market data ensuring a complete and self-sustaining skills ontology

The impact was three-fold: The organisation’s HR team was able to define standard skills for 5,000+ roles and map essential skills to existing talent in weeks. This definition of skills improved clarity of roles, retention and the experiences of 72, 000 employees with insight into global skills, resources management and talent mobility opportunities. The cost savings were significant; (>$2M) and time (>2 years) savings.

The Financial Impact

The benefits of investing in workforce agility are not just theoretical – they translate into both significant financial gains and savings. Recouping the cost of reduced turnover, reducing recruitment costs with internal mobility, along with increasing productivity, internal alignment, upskilling to stay ahead of competition and more efficient use of internal resources. For an organisation of 10,000 employees can show up to a $7 million impact on their business through workforce agility and improved retention.”

The implications of maintaining a rigid workforce in today’s dynamic business environment are far-reaching and costly. As a significant portion of employees contemplate leaving their organisations or express uncertainty about their future within them, the potential for widespread disruption looms large. This impending shift in talent could further widen the already concerning workforce readiness gap, amplifying the challenges organisations face in aligning their workforce capabilities with rapidly evolving business needs.

The evidence is clear: workforce agility is no longer optional in today’s dynamic business environment. Organisations that prioritise continuous skills development, and leverage data-driven decision-making are better positioned to navigate change, retain talent, and drive growth.

As we face an increasingly complex and unpredictable future, cultivating an agile workforce is about gaining a competitive edge today while ensuring long-term viability and success. The time to act is now, transforming HR operations to build a resilient, adaptable, and high-performing workforce ready to meet the challenges of today and tomorrow.