How skills-based organisations are tackling record job mobility 

A record 1.3 million Australians changed jobs between February 2022 and 2023 – a job mobility rate of 9.5%, on par with the previous year’s pandemic-triggered surge in talent attrition. While there may be many reasons for employees to jump ship – a higher salary, more flexibility, or a growing sense of burnout – there is a common underlying issue.

It’s easier for your employees to find new opportunities outside your organisation than within.

Mercer’s 2022-23 Global Talent Trends report found two in five employees are planning to leave. Those who are planning to stay are more likely to say their current employer provides opportunities for horizontal career moves, or makes future career steps clear to them. Yet, a recent Mercer study found the standards and rules for internal application and selection are often more stringent than for external hiring – creating a barrier. And another incentive for talent to look for opportunities outside.

It’s easier, faster and far more cost-effective to retain an employee than find a new one. So why do we make internal moves so hard?

To democratise access to internal opportunities, and empower people to take ownership of their career, you may need to let go of traditional notions – like pigeon-holing people into jobs or restrictive policies. Instead, consider how individual skills and aspirations could flex into the projects and tasks that really need to be done.

This is what skills-based organisations do. They decouple work from jobs and jobholders, in turn reducing their reliance on job hierarchies and linear career ladders. Not only can this solve the growing risk to retention, it can also support upskilling and reskilling across the organisation. And because it empowers both organisations and employees, we describe them as skills-powered organisations. 

According to Mercer’s vast employee engagement data, career progression and opportunities to continuously develop are the top reasons people join and stay with your company. Yet, while many organisations find it easy to describe jobs, they find it much harder to craft individualised career paths. 

If you break your requirements down into skills, careers can become less linear and restrictive, and more like a matrix where different pathways can connect depending on skills, interests and aspirations.

This way you can build a culture based on learning and coaching, which in turn lifts everyone to do more complex or creative work. Employees also feel more engaged and valued, which means they’re more likely to put in a greater discretionary effort.

Ultimately, if you don’t invest in your talent’s development and skills, you’re effectively solving tomorrow’s challenges with yesterday’s skills.

Unilever is a global pioneer of this type of approach. In 2020, the organisation invited its workforce to upskill or do something exciting and new via its new talent marketplace, Unilever Flex. Within 90 days, the company had resourced over 700 projects – with 60% of projects drawing people from different functions or geographies. An overwhelming majority of employees involved (90%) said they learned something new and would do it again. 

The importance of learning something new is worth noting, because many employees who move to a new company aren’t necessarily stretching their skills. While job mobility is on the rise, ABS data suggests people are more likely to change industries (58%) than occupations (44%). They are mostly moving into a job requiring the same level of skill.

This is a potentially risky move. Although job changes can bring short-term benefits like better pay, unless employees increase the complexity or breadth of the work they are doing, they could be limiting their future career growth prospects.

That’s why a focus on skills is so important for your employees. It can give them a clearer understanding of what skills they have, what they need to learn, and what that means for their working future. Ultimately, it gives them power over their career – without having to look externally for a fresh start or new challenge. 

Skills-powered organisations use data on their employees’ experience, skills and interests to find the right people to do the right work. They also have a clear understanding of what skills they will need for the future, what skills are becoming less relevant, and what skills are emerging.

Instead of rigid job descriptions, roles can be classed as fixed, flex or flow. There may still be some fixed roles – the repetitive or transactional functions within a business such as accounts payable or customer service. Flex roles enable employees to allocate their skills across a few different business needs, or flex their working hours to suit the organisation’s seasonal demands. Flow work provides a pool of like-skilled people who can move to wherever work needs to be done. This could be a priority strategic initiative, a client project, or a crisis response. Working in flow roles can accelerate learning because it’s typically a fast-paced experience. 

This approach can represent a significant transformation for many organisations, as it will fundamentally change culture, workflow, policies and organisational structures. It demands a different leadership mindset: managers will need to learn how to continually bring work and people together and manage outcomes. Instead of managing with hierarchical authority, they will need to empower and align. There will be a greater impetus for diversity, equity and inclusion – because skills can be found everywhere in the organisation, and you will need many different experiences and perspectives to get the work done.

While you can run a skills-powered organisation without a talent marketplace platform, the emergence of AI-based tech can turbo-charge its effectiveness. It’s a game-changer, making career development opportunities visible and accessible, and removing some of the human biases (it’s not what you know, but who you know) that unconsciously impact selection.

Talent marketplace platforms can match talent demand to supply more efficiently by incorporating employee, organisational, and external data utilising powerful AI to do the heavy lifting. Importantly, it shares all that information with your talent. By inferring and quantifying skills and experiences, learning preferences, and bringing in external comparisons, it can nudge employees towards new roles, projects, mentors or learning opportunities.

Technology can also align internal and external recruitment, transforming the efficiency and accuracy of talent acquisition. LinkedIn’s Future of Recruiting Report signals a shift to skills-focused recruitment, with 50% of hiring professionals now more likely to search candidates by skills rather than years of experience. However, only 64% of recruiters feel they can accurately assess a candidate’s skills today. As a growing number of organisations move towards a skills-powered talent model, this data is likely to become increasingly visible and robust.

Every organisation is different, and the trigger for you to begin this shift is likely to be a specific use case. It could be increased demand for project-based work, or challenges with employee retention or engagement, the opportunity to release trapped capacity, or upskill employees.

The first step is to identify the trigger(s), and then start educating yourself on why those triggers are causing pain or opportunity and what might be possible. Talk with others about their experience, as where you start may change. It’s a process of continuous discovery: as you build the business case, consider who will be your best advocates for change, how you’ll bring leaders and managers on the journey, and what metrics you need to put in place to measure success. Once you’ve figured out your story, invite your tech partners in.

The most important thing is to be open to the possibilities of a skills-powered model. In the face of ongoing job mobility and the importance of ensuring skills remain relevant, employers cannot afford to be complacent.

By making it easier and more transparent for employees to understand a range of skills, development opportunities and career pathways, you’ll make it more likely that they’ll look internally first when they decide it’s time for a change.