Skill Fitness: Powering the Skills-Based Organization Forward in the AI Age

Talent and the optimal skills balance is a consistent performance indicator for supporting the profitable growth of organizations. Yet this goal achievement is spiraling downwards in the wrong direction according to recent research from Betterworks.

Betterworks, a performance management software company, released a Better Skills research report that interviewed over 1,100 HR leaders and managers in the US. It confirmed a concerning trend that nearly 80% of the organizations surveyed had to lower the bar in their job requirements.

We are in a perfect storm skills shortage due to the wave of baby boomer retirements, the influx of Gen Z into the workforce, and rapid technological advancements driven by AI, robotics, and IoT, which are driving demand for new skills. Macroeconomic trends, and geopolitical, and cyber-security risks are impacting organizations' ability to keep pace with rapid change with the right transformative skills.

"Accurately identifying and cultivating skills is the cornerstone of a growing organization, yet our research reveals shortcomings in how well organizations assess the state of their workforce," said Doug Dennerline, CEO of Betterworks. "Every organization wants to unlock the full potential of their people, and that starts with understanding their skills — the ones they have and are developing, and hidden and adjacent skills."

“To truly capitalize on their workforce's potential, companies must focus on enabling managers to verify employees’ skills with up-to-date data and use individualized employee skilling plans to connect the skills needed to ones under development,” Dennerline added. “AI-assisted skill identification and validation can help organizations track skills across their workforce while supporting individual skill development.”

Their report findings highlighted the critical need for up-to-date skills data and AI-powered mechanisms to align talent development with strategic goals, ultimately uncovering hidden skills and enhancing internal talent pipelines:

• 98% believe verified skills data – proof of skills through digital certification or badging, assessments, tests, or review of past work and accomplishments— is essential for identifying hidden talent.
• Nearly 7 in 10 use performance evaluations for measuring skills and competencies; but over half are doing those assessments only 1-2x per year
• 74% believe adding verified skills data into performance processes could improve internal mobility and
• 1 in 3 employees receive occasional or no manager guidance for skills development.

The No.1 barrier to skill development is lack of time: 44% of employees don’t have enough time to develop their skills on the job, even though “setting aside time for employee training” ranked first or second in importance by companies of nearly every size.

A skills-based approach built on a foundation of performance data is no longer optional, but essential. As organizations face rapid technological changes, evolving market demands, and intense competition for talent, HR leaders are increasingly aware that a robust skills-driven model is critical for long-term success. While companies invest heavily in recruiting and talent management processes, the foundation remains weak without up-to-date, accurate, and verifiable skills data.

To address skill data gaps, Betterworks is launching its Talent Profiles for employee skills tracking and development. Talent Profiles will leverage AI technology to extract skills data from performance reviews, peer feedback, goals, and HRIS or talent marketplaces to create a verifiable skills inventory, providing companies with transparency into the skills they have and those under development.

Betterwork's Talent Profiles feature was recently recognized at the HR Executive and the HR Technology Conference & Exposition as a "Top HR Product of 2024.”

Human Skills Development Balancing Requirement with AI Transference

There is no question that we are in a perfect storm where relevant skills are more challenging to secure.

At the same time, AI systems are advancing to be almost on par with human performance in almost every skill dimension.

Stanford's AI Index Report released in April showed that AI has surpassed human performance on several benchmarks, including some in image classification, visual reasoning, and English understanding. Yet AI trails behind on complex tasks like competition-level mathematics, visual commonsense reasoning, and planning.

Dan Hendrycks, Executive Director of the Center for AI Safety, has recently launched the Humanity's Last Exam project to determine when expert-level AI can be 100% validated. The exam under development will include at least 1,000 crowd-sourced questions that are hard for non-experts to answer. Alexandr Wang, Scale's CEO has been advocating that we need harder tests for expert-level models to measure the rapid progress of AI. Claude an AI Lab Model From Anthorpics recently went from scoring about 77% on undergraduate level tests to nearly 89% accuracy a year later.

Conclusion

BetterSkills Report highlights important skills gaps and the need for organizations to have an easier way to understand their in-house skills. Talent Profiles is a promising new software innovation that can help organizations move in the right direction.

However, at the same time, it is imperative for Board Directors and CEOs to become clearer on where AI will augment their business capabilities and identify where guard rails must be set up to ensure humans remain in the loop.

SalesChoice's research in future-proofing organizations from learning from our AI series with EY, and The Bedford Group where we have had hundreds of Board Directors, CEOs, and business executives explore and discuss the organization of the future there are three insights and observations I have to round out BetterSkill's research.

1. Sourcing the Right Talent must ensure ethical AI values form a stronger sense of corporate purpose. Technology investments in AI or any transformative technology without responsible ethical practices are imperative to get AI right. IBM in a recent global research study reported that over 75% of organizations do not have an ethical AI governance policy. See Our SalesChoice Research Here
2. Upskilling must be sustained on Diversity, Equity, and Inclusion leadership as one of the most significant risks we have with AI is Data Bias and Gender imbalance in AI data sets. Recent USA developments easing focus on DEI initiatives is a short-sighted behavior and board directors and CEOs must be aware of the impact on AI ethical practices without DEI skill foundations. (See our SalesChoice Research Here)
3. The softer skills are what innately make us human, hence all organizations and educational systems must advance skills in these key areas to balance the future world as it is only a question of time before Humans and AI reach singularity (Outlook 2045). Priority skills areas from my perspective are abstract reasoning, analytics, authenticity, data, creative thinking, diversity, equity and inclusiveness, emotional intelligence, empathy, ethics, integrated thinking, kindness, oral communication, reflection, and story-telling are imperative skills to ensure are developed and sustained. SalesChoice has developed a new MoodInsights SaaS Product to help guide employee insights on their feelings and reflect on the reasons why pausing to be authentic and provide context so organizations can improve their corporate cultures in real-time is one of the methods where AI can support humans and identify million-dollar problems. Check us out at MoodInsights.

We need to ensure we build a skills-focused future. The hard question is which ones are relevant to your organization to stand the test of time.

That's it folks for my reflections this week. Stay tuned and follow us and please share this article with others if you found it insightful.

Sources

1. Betterworks, Press Release (Sept 17, 2024)
2. Betterworks, Skills Report (Sept 17, 2024)
3. Jeffrey Dastin, Katie Paul. (Sept 17, 2024) "Artificial Intelligence experts ready exam project to test capabilities of systems. " Globe and Mail, Toronto, Canada.
4. Diamond, S, Gordon, C. (2024). Corporate Purpose Research. Navigator Research.
5. Gordon, C. Mota, P.(2024) Why Diversity Equity and Inclusion Leaders Must Lead in AI. SalesChoice and HACE Research
6. Stanford's AI Index Report (April, 2024).

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