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Transforming talent: How a skills strategy drives business success

By Justin Luce , Michiel Klompen and Grace Kuo | May 6, 2025

Bridging the gap between the skills organizations need today and what is needed tomorrow isn’t just beneficial, it’s essential.
Career Analysis and Design|Compensation Strategy & Design|Work Transformation
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Organizations are in a time of extraordinary change, when they must continuously realign their workforce capabilities to meet evolving business goals. Successful leaders understand that bridging the gap between the skills their organizations have today and the ones that will be needed tomorrow isn’t just beneficial, it’s essential. They also know that the starting place for bridging that gap is a thoughtfully crafted skills strategy.

Yet, too many organizations stumble early by leaning too heavily on technology or data alone. They forget to set the foundation before they design their skills-based programs. True transformation begins with a clear understanding of the work to be done, then intentionally connecting it with skills that unlock the organization’s purpose and the full potential of its people. This connection motivates and empowers teams, igniting talent in ways that technology alone never could.

So, how are organizations getting skills right? We’re here to deliver a practical roadmap for implementing a skills strategy that will accelerate your organization’s performance.

  1. 01

    Start with purpose and clearly define the work

    Every great skills strategy starts by carefully identifying the work needed to achieve strategic objectives, whether that’s entering new markets, boosting innovation, enhancing customer experiences or driving efficiency.

    Skipping this step puts organizations at risk of investing in the wrong skills, diminishing their potential impact. In contrast, clearly defined work — tied directly to the strategic objectives it enables — sharpens focus and ensures every effort drives meaningful outcomes.

  2. 02

    Create clarity by developing a shared skills taxonomy

    A skills taxonomy provides the critical foundation to grow through skills. It organizes and categorizes skills, creating a common language and bringing clarity across the organization. It helps ensure skills are defined at the right level of granularity — detailed enough to be actionable, yet broad enough to remain adaptable — and connects them directly to jobs and critical talent processes. A well-designed taxonomy enables unified understanding, drives alignment and powers more targeted, effective talent strategies.

    Leading organizations enrich their skills frameworks with external insights gathered through market research, webscraping and real-time data. Without a skills taxonomy, organizations risk confusion, misaligned investments, limited visibility into skills gaps and reduced agility in responding to market shifts.

  3. 03

    Strengthen jobs with skills

    Skills don’t replace jobs. Rather, they power jobs, giving them greater meaning and increasing their effectiveness. Retaining clear job frameworks ensures consistency, fairness and compliance, especially as pay transparency becomes a reality in a growing number of markets. When you layer skills into job structures, roles become clearer, career paths more inspiring and development programs more motivating.

  4. 04

    Start small but think high impact

    Change doesn’t have to be overwhelming. Start by targeting high-impact areas where skills gaps significantly limit potential (e.g., digital transformation projects, customer-facing roles). This focused approach builds early wins and momentum, demonstrating tangible benefits and providing clear models for broader implementation. Small, purposeful steps forward inspire confidence and buy-in throughout the organization.

  5. 05

    Collaborate across boundaries

    Skills don’t reside in silos; they flow across the organization. Leading companies understand that building skills is a shared responsibility embedded throughout the organization and driven by collaboration. This collaboration is purposeful and connected:

    • HR and business leaders work side-by-side to develop a skills-based talent strategy and workforce plan that supports goals like digital transformation 
    • Subject matter experts shape training programs to reflect evolving tools and technologies 
    • Managers help identify skills gaps, anticipate shifts in the skills needed for projects and recognize early signs of strain on critical talent, helping ensure that the workforce stays responsive and grounded

    Effective skills governance is essential to guide and sustain this work. Cross-functional councils provide structure and direction as well as define core skills, prioritize skill investments and standardize expectations across departments. 

    When collaboration is embedded across the organization, skills become more than individual capabilities; they become a cultural force. People feel heard and empowered. Engagement deepens. Momentum builds. And the organization moves forward, together.

  6. 06

    Turn strategy into meaningful action

    A skills strategy becomes truly powerful when it directly shapes talent decisions, including how people are hired, developed, evaluated and rewarded. Practical actions include:

    • Clearly defining career paths based on meaningful skills 
    • Targeting learning initiatives aligned with strategic priorities 
    • Incorporating skills into performance assessments and recognition 
    • Using skills insights for workforce planning 
    • Implementing internal talent marketplaces 

    These actions empower employees by matching their skills to new opportunities. They also foster personal and organizational growth. However comprehensive your roadmap might be, remember to start small and focus on the talent programs that have the highest impact on your organization. 

  7. 07

    Measure, refine, adapt

    A successful skills strategy evolves. Regular, thoughtful measurement helps organizations adjust course as needed, remaining agile and responsive to change. Essential metrics to watch include: 

    • Internal mobility rates
    • Productivity and effectiveness after reskilling
    • Progress in closing critical skills gaps
    • Efficiency in talent redeployment
    • Clear links between skill development efforts and business outcomes

    Proactive scenario planning will help you anticipate future skill requirements, while continuous learning and feedback loops ensure ongoing resilience and responsiveness.

Empowering a future-ready workforce 

Strategically addressing skills isn’t just about closing gaps, it’s about unlocking human potential. Organizations that embed skills deeply into their operations foster resilience, agility and innovation. They also equip their teams to not only respond to change, but to proactively shape the future. This isn’t just good for business, it’s good for people too. It helps every individual see a clearer path toward their fullest potential. 

Authors


Director, Work & Rewards
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Data Science Leader, Work & Rewards
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Practice Leader, Work, Rewards and Careers, Asia Pacific
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