Navigating A Skills-Powered Future: Employee Skills Development
In the ever-changing global economy, there’s a growing need for workers to learn and adapt. The post-pandemic work landscape has put the topic of skills firmly on the agenda for most — if not all — organisations. How do UK employers and employees view skills-powered thinking, and what are the opportunities as we move towards 2025?
Placing a focus on skills
Given the emerging skills gap in the job market in recent years1 prioritising the development of employees’ skills is essential to reducing attrition rates and safeguarding your organisation against the loss of valuable talent.
Mercer’s recent Inside Employees’ Minds study2 including insight from 2,027 full-time UK-based employees, aimed to uncover the following:
- How effectively are skills being utilised currently?
- Do individuals understand what skills they need for career progression?
The study results reveal an interesting scenario: An overwhelming 84% of respondents know which skills are crucial for advancing in their careers, but only 61% have received guidance from their organisations or managers on these essential skills. There’s a pressing need to offer better support and clear pathways for employees to acquire the skills that will underpin their career growth.
The role of skills in the modern work landscape
We need to place more importance on using and developing the skills of the younger workforce. Among respondents aged 18–24, 40% feel their skills are underutilised, suggesting that the unique abilities of younger employees are often overlooked. Members of the intuitively tech-savvy Gen Z, who are entering the workforce now, have distinct skills that may not be recognised in more traditional roles. To address this, consider introducing practices such as reverse mentoring around digital skills.
Since skills now have an average shelf life of just 2.5 years, businesses must acknowledge and understand the evolving nature of skills in today’s workforce. There’s an opportunity to adapt your organisational mindset, culture and processes to tap into the unique skills of younger generations. This proactive approach ensures that your business remains in sync with evolving skills, creating a more dynamic and responsive work environment.
By contrast, among those aged 65 and above, 71% feel their skills are used effectively. But as employees age, there’s a decline in knowledge and understanding of, and opportunities for, skills development, particularly among the 35–44 and 45–54 age groups. To address this, it’s essential to develop a culture of lifelong learning to support continuous development. It also helps with engagement — employees who see good opportunities to learn and grow are 2.9 times more likely to be engaged, according to LinkedIn3.
So, what steps can you take to harness the power of skills in your organisation? Consider the following questions:
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Have we established a clearly defined taxonomy of skills linked to each role?
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Do we know what skills our organisation needs from our employees for both current and future success?
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Can we effectively audit our employees’ skills to establish a baseline for human capital?
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Do we have what we need to understand our employees’ aspirations and implement an effective communication plan for identifying near- and long-term roles that align with their aspirations and skills?
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Do we foster a mindset, culture and processes that enable employees to acquire new skills through practical experiences with new environments and colleagues rather than relying solely on traditional classroom or e-learning methods?
Are you taking an inclusive approach to skills?
Marginally more women than men (66% versus 64%) feel their skills are used effectively, but women feel less compensated for acquiring new skills. This underscores the crucial need to champion gender equality and inclusivity in our endeavours to develop skills.
Our study also explored the impact of disability status on skills utilisation. Although some 66% of employees without disabilities feel their skills are used effectively, this drops to 60% for those with visible disabilities and 58% for those with invisible disabilities. These findings indicate that individuals with disabilities potentially possess a variety of untapped skills. This highlights the importance of inclusive skills development for everyone, regardless of ability.
When it comes to ethnicity, South Asian and Black respondents are more likely to receive information about skills needed for progression in comparison with East Asian, mixed or white respondents. White and East Asian employees demonstrate the lowest overall understanding of skills and career progression. These findings highlight the ongoing significance of continued monitoring and action around diversity, equity and inclusion (DEI) initiatives in skill development.
To improve in these areas, consider the following:
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What steps can we take to be more inclusive in leveraging the skills of those who feel disadvantaged?
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Have we undertaken a deep dive to understand the experiences of certain segments of our employee base? (Not just looking at processes but looking at their personal experiences; after all, processes only generate data, but personal journeys generate feelings and perceptions, which are then often shared with others.)
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Do we understand the skills certain employee segments can uniquely access?
Outline clear skills development pathways
The Inside Employees’ Minds study shows that experienced professionals and managers feel more satisfied with how their skills are used (64% and 71%) compared with technical professionals (50%). This indicates a need to reassess the value placed on technical roles and offer more opportunities for skills development in these positions.
Skills development perceptions vary across job levels. Entry-level professionals, in particular, show a lower understanding of skills development linked to their aspirations, highlighting the need for clear development pathways and the importance of ensuring that compensation and recognition align with employees’ efforts to acquire new skills.
Supervisors, managers and executives show greater understanding of the skills needed — and higher compensation for developing them. This suggests that companies tend to prioritise skills development at higher levels. Interestingly, employees with longer tenures within an organisation have a lower understanding of the skills needed for career progression. This suggests a potential lack of focus on career paths and skills development for long-term employees.
Consider the following questions:
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Does our skills taxonomy distinguish between technical and behavioural skills (including leadership)?
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Are we clear communicating how our organisation values technical and behavioural skills at different levels?
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Are we equally effective at communicating career paths and skills requirements for promotion at both lower and higher levels?
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Is it clear how our company differentiates rewards based on specific skills, not just roles?
Understand your internal talent
Workers in certain functions — such as communications, creative design, engineering and science, HR, legal and compliance, teaching and education, and patient and clinical care — report higher levels of skills utilisation. Individuals in these roles often require specialised training and possess specific skills that are directly applicable to their roles.
Others, in functions such as administration, finance or insurance, manufacturing, production, construction, and retail, face lower levels of skills utilisation. Our study also found that those in administration, legal, hospitality, sales and marketing, and customer services have a lower level of understanding of the skills needed for career progression.
In addition, organisation size plays a role in an employee’s skills utilisation and development. Notably, smaller and midsize organisations exhibit normal levels of skills utilisation, whereas larger organisations with 2,500-plus employees report reduced understanding of required skills and limited opportunities for improvement.
Those at larger organisations also have an overall reduced understanding of the skills they need within their jobs and for their career progression and note a lack of good opportunities to improve their skills. The smallest firms in the survey (with 250–499 employees) performed best in terms of skills attainment and career development associated with skills.
It seems fair to assume that once an organisation becomes so big that knowing everyone personally is unrealistic, other mechanisms (over and above direct first-hand knowledge) are required for understanding the workforce at scale. For many organisations, this has led to the development of an internal talent marketplace for matching existing employees with open roles.
To improve these areas in your organisation, consider the following questions:
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Can we invest in an internal talent marketplace to obtain real-time, accurate data on the skills of our workforce and establish career paths based on skills, not just linear progression?
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Are we intentional about identifying roles and functions as priorities for skills acquisition, building and retention?
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Have we considered how artificial intelligence (AI) and other technologies will impact the demand for skills within our organisation, both overall and in specific functions?
Future-proofing your business with a skills-based approach
Footnotes
1. World Economic Forum. “Skills for Your Future,” available at https://www.weforum.org/focus/skills-for-your-future/.
2. Mercer. Inside Employees’ Minds, 2024, available at https://www.mercer.com/en-us/insights/talent-and-transformation/attracting-and-retaining-talent/2023-2024-inside-employees-minds-survey-report/.
3. 4 Key Insights About Recruiting Managers That Can Help Lift Your Team, available at https://www.linkedin.com/business/talent/blog/talent-strategy/state-of-the-manager-report.
- Partner, Workforce Transformation