This article is provided by BRC Associate Member, North Highland.

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The skills-first future has arrived – what does it really mean and how can you keep up?

In the rapidly evolving retail industry, where businesses face challenges like the shift to automation, omnichannel sales integration, and high workforce turnover, becoming skills-first is more than a trend—it's necessary for survival. Now, more than ever, embracing a skills-first approach is crucial, but a few key success factors can help your organization navigate the transformation.

Let’s start by jargon-busting. Being skills-first means moving away from focusing on ‘jobs’ within defined, rigid structures to more fluid operations. In this environment, organizations can more easily juggle changing priorities with agility by acquiring, developing, or deploying resources as needed based on the skills required to do the work at hand. Ultimately, the focus is on expanding talent management beyond job titles and formal qualifications to embrace skills and competency frameworks as foundational to business success.

This isn’t a new concept, but it has gained traction in recent years and is especially critical for staying ahead in an industry where employers face 70% of unfulfilled job openings but global retail demand is surging. Other drivers behind the increasing need to become skills-first include:
 

1.   Organisations need agility to survive.

Recent years have shown how unexpected events require businesses to pivot quickly to address changing demands, and constant technological advancement means that every organization’s most critical skill needs will only become more dynamic over time, with the World Economic Forum predicting that 50% of the global workforce will need to reskill by 2025. Becoming skills-first enables decision-makers to more effectively deploy resources to accomplish the work that needs to be done in the face of changing consumer demands or unanticipated environmental stressors.

2.   Workforce expectations have changed.

It’s no longer the norm for people to seek long-term employment and climb the career ladder. Employees increasingly prioritise flexibility, development, and well-being over stability or vertical progression. The rise of the gig economy and the growing number of skills-first employers means that people have greater experience expectations (e.g., investment in their development) and can more easily opt for cross-functional, ‘squiggly’ career leaps. Creating greater visibility of skills democratizes development and empowers employees to seek purpose and opportunity within your organization.

3.   There’s a war for talent.

According to the United Nations, by 2033 the UK’s working-age population will decrease by 10 million. Organisations will need to do more with less and fiercely compete for talent. Research demonstrates that skills-first strategies improve your ability to attract top talent by expanding the workforce pool (e.g. by breaking the Paper Ceiling). Additionally, with clarity around forecasted skills demand and the existing skills base, organisations can better optimize the existing talent they have, and elucidate potential career options to incumbent employees.

Becoming skills-first is easier said than done: only 20% of organizations have successfully built repeatable, scalable processes that their workforces actually adopt. As leading Transformation experts, North Highland has worked with numerous organisations on their skills-first journeys. Whether you are just starting the journey, need help turning frameworks into action, or are ready to focus on continuous improvement, these success factors can help you get there.

Start with the right data

Tomorrow begins with assessing where you are today. Taking a baseline snapshot of the current state through skills needs and maturity assessments should also serve as the pilot for a defined, sustainable approach to cataloguing skills. Compliment current state assessments by strategically considering future skill needs based on “data providing sightlines into market shifts, consumer preferences, regulatory moods, and ultimately, overall business performance”.

Further, consistently measuring skills-first strategy outcomes can help you evolve skill or competency taxonomies to meet changing business needs and deploy the right talent to the right tasks at the right time.

Be patient! Becoming skills-first takes time

Transforming talent strategies across an organization is a multi-year journey and there is no shortcut to getting the foundations right. The pressure to become skills-first means that organizations run the risk of overextending to implement enterprise-wide strategies right away, or deploy short-term initiatives without considering the holistic picture. However, one key to a durable, successful skills-first strategy is to start small. Small changes can have a big impact; start by establishing a skill taxonomy in one business unit or function with critical skill gaps. This allows you to address business needs with a skills-first mindset while simultaneously piloting a repeatable, scalable approach.

Activate a culture that enables skills-first thinking

Most organizations recognise the operational changes needed to become skills-first but tend to overlook the importance of changing mindsets. Transformations require acceptance of new norms; skills-first fundamentally changes conversations around acquiring, developing, and retaining talent. This is especially important in industries that tend to have greater employee fluctuation. For example, the retail industry has traditionally relied on temporary workers for busy holiday seasons; instead, leaders could move talent from the front line to address business demands in other parts of the organization (or vice versa) after the annual rush.

As these practices come to life, track and encourage employees to accept the new norms. Focus on bringing them into the approach and understand how to best apply the documented strategy in a way that enacts your underlying values.

Don’t (unintentionally) forget about knowledge

Enthusiasm to transition to a skills-first approach should not fully replace or inadvertently erode existing capabilities. Robust knowledge management, or strategic knowledge retention and transfer through preservation, codification, and communication of behaviors, norms, processes, or other information, should align to targeted skill growth areas so that they do not unintentionally undermine them. Capitalize on employees’ knowledge to support skills-first practices by methodically capturing that knowledge, assessing relevance, and developing action plans to transfer it through training or institutional repositories. Equally important is intentionally forgetting obsolete or irrelevant content, creating space to retain the right information.

So, are you ready to go skills-first? To learn more about accelerating a skills-first transformation and harnessing the full potential of the workforce, instilling a growth mindset, and embedding data into strategy, check these out:

• Beyond Skills: Unleashing the Power of Capabilities
• Leadership In Limbo
• Stagnant Struggles, Fresh Solutions