Skills-powered organisations | Skills-powered strategies

Survey report insights: Global Skills Technology and Adoption 

   
  
Organizations are increasingly recognizing the importance of skills management as a critical component of their talent strategies. The Global Skills Technology and Adoption Survey reveals that while many organizations have made progress, the skills journey is a long road of continuous improvement, with plenty of untapped opportunities to be realized along the way.

Skills management approaches

Organizations most commonly embed skills into talent acquisition and learning and development. Notably, 68% of organizations report that they have initiated their skills journey and have established ways to track and manage skills. However, only 43% leverage a talent marketplace to connect talent to work — an opportunity worth tapping into, to increase internal mobility and match talent to work at scale.

While skills are incorporated across multiple talent practices, the amount of manual work still required may hold some businesses back or eat into ROI. Talent marketplaces and internal hiring (both 26%) are the areas where skills are most likely to be populated/suggested automatically by skills technology platforms. Meanwhile, most organizations are still manually mapping skills within learning and development and performance management practices (both 38%), demonstrating opportunities to further leverage technology in this space.

Untapped opportunities

Despite the progress made, skills are underutilized in some talent practices. Organizations remain cautious about embedding skills within performance and reward practices in particular, and rightly so, as embedding skills in rewards practices is a taller ask of people managers and requires more robust skills data. 
40%

of organizations don’t incorporate skills into rewards and recognition

28%

don’t incorporate skills into performance management 

This speaks to ongoing efforts to eradicate bias or unfairness within these processes. If managed correctly, AI can help here, while also doing its part to increase productivity. Business leaders see the potential, with over half (54%) of executives believing that augmenting systems and processes with AI is a top business priority over the next year. Plenty of organizations with a high level of skills maturity have already seen the positive impact from embedding skills in rewards.

Another area ripe for development is strategic workforce planning (SWP), where 30% of HR leaders say skills are not yet incorporated. Given that improving SWP is within HR’s top five people priorities for 2025, there’s an opportunity to embrace skills as the currency of work to improve short- and long-term planning.

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The chart presents data on how organizations incorporate skills models into various practices. It categorizes the extent of skills usage into four groups:

  1. Skills are not explicitly used (represented in dark blue)
  2. Skills are manually entered/copied from various sources (represented in medium blue)
  3. Skills are populated or suggested automatically, but may be updated (represented in light blue)
  4. Don't know (represented in gray)

Key Insights:

  • Career Pathing: 23% of organizations do not explicitly use skills, while 30% manually enter skills, and 28% have skills suggested automatically.
  • Learning & Development: A lower percentage (13%) of organizations do not use skills explicitly, with 38% manually entering skills and 28% using automatic suggestions.
  • Mentoring: 21% do not use skills explicitly, 34% enter them manually, and 9% have automatic suggestions.
  • Performance Management: 28% do not use skills explicitly, 38% enter them manually, and 26% have automatic suggestions.
  • Rewards & Recognition: This area shows the highest percentage of organizations (40%) not explicitly using skills, with 32% manually entering them and 26% using automatic suggestions.
  • Opportunity/Talent Marketplace: 26% do not use skills explicitly, 17% enter them manually, and 32% have automatic suggestions.
  • Internal Hiring: 19% do not use skills explicitly, 32% enter them manually, and 26% have automatic suggestions.
  • External Hiring: 21% do not use skills explicitly, 36% enter them manually, and 23% have automatic suggestions.
  • Strategic Workforce Planning: 30% do not use skills explicitly, 28% enter them manually,and 32% have automatic suggestions.

Who champions skills-powered talent practices?

As skills-powered practices, in particular internal talent marketplaces, have gained momentum, people managers have increasingly become advocates. However, in some cases, HR professionals and employees are resistant to skills initiatives. This underscores the challenges of driving continuous change as skills initiatives become more common, and the initial excitement wanes.

Stakeholder support for the Talent Marketplace

  
  1. The image compares stakeholder support and resistance for the Talent Marketplace, showing a shift from 2022, where Human Resources and Employees were advocates and Managers were blockers, to 2024, where Managers and Leaders have become advocates, indicating increased overall support.

  2. The image displays the extent to which organizations incorporate a skills model into various practices, revealing that the highest integration occurs in rewards and recognition (40%), while learning and development shows a mix of manual entry (38%) and automatic population (28%), with other areas like career pathing and performance management also reflecting varied levels of skills usage.

Ongoing transformation calls for effective change management. To benefit from skills-powered practices, organizations will want to focus on perfecting their adoption and engagement strategies. 

Get in touch to learn more about Mercer’s approach to change management

Three key challenges

Nearly three-fifths of survey respondents are uncertain about the success of their talent marketplaces. This points to a lack of clarity surrounding success metrics and the underlying vision driving the skills initiative. 

In a complex tech landscape, establishing a shared vision, clear objectives and an evolving roadmap is essential for getting stakeholders on the same page. Being open to flexing how you reach your end goal, while grounding skills initiatives in the overarching problem you want to solve, means businesses can better keep pace with vendor innovations and keep stakeholders bought-in along the way.

The crowded HR tech space can feel overwhelming. Don’t get too bogged down by the technology. While a single organization may rely on multiple skills tech platforms, the focus should be on the enablement and connection across platforms for a seamless employee experience, not the initial deployment. HR tech should serve as an enabler of the broader vision.

As skills practices grow, the goalposts may change and the bar gets higher. This is one reason the average confidence rating in successfully navigating the talent market has dropped from 6.1 to 4.6 since 2022. After the initial splash of a new tech platform, stakeholders may have high hopes that the transformation is done. But sustaining momentum is about recognizing that the rollout date is merely the starting line, not the finish line, for successful skills initiatives    . This brings us back to change management. 

How to make the most of skills technology

Two-thirds of organizations recognize they need to do more to optimize their skills management platforms. It’s these businesses that have a clear test-and-learn mindset, understanding this is the way to secure long-term success. 
  1. Optimize HR tech
    Treat technology as the enabler to reach your skills goals.
  2. Data hygiene
    Facilitate effective skills management with a clear job architecture.
  3. Start small
    Create pilot programs and embrace an agile mindset through testing and learning.

    Skills-powered organisations

    Compare your progress against early adopters of skills tech

    Download the Global Skills Technology and Adoption Survey Report
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    About the survey

    The Global Skills Technology and Adoption Survey is an exclusive survey for organizations that are early adopters of skills technologies and platforms — talent marketplaces in particular.

    This report provides insight into how a sample of HR leaders infuse skills across their workforce and HR infrastructure, including by leveraging skills data to drive people decisions and using technology to enable skills-powered success. 

    The survey ran in August – September 2024 and includes insights from 47   organizations.

    About the author(s)
    Brian Fisher

    Work & Skills Solutions Leader

    Chitralekha Singh

    Singapore Skills Practice Leader

    Rupakshi Puri

    US Transformation Practice

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