Skills-powered organisations | Skills-powered strategies

Addressing common skills-measurement challenges 

Skills demand is evolving fast, with almost two-fifths (39%) of employees’ skills likely to be outdated in the next five years. To upskill/reskill the workforce and pivot resources to meet customer demand, businesses need a firm grip on the skills they have and the skills they need — and how these may change with time.

Executives believe reskilling/upskilling to keep up with demand is the biggest risk to business growth in 2025.
Mercer’s Executive Outlook 2025

A portfolio approach to skills measurement 

Businesses can achieve their skills objectives with accurate measurement. Here’s how:
Framework of Skills Measurement Methods
This image is a circle graph that shows the three components of a skills measurement strategy. The three components are inferred skills, validated skills and rated skills.
Getting a complete picture of skills relies on gathering all available talent insights by using a portfolio approach to skills measurement. This includes rated, inferred and validated skills-measurement methods.

Skills-measurement tools

Start strong with rated skills data

Although each skills-measurement method deserves its own seat at the table, many companies will start with a rated skills measurement tool because it doesn’t require a heavy technology investment. A rated skills tool also builds on the existing employee–leader relationship. This approach can provide a snapshot of existing skills, which makes for a smoother transition to a skills-powered organisation.

Common outputs from a rated-skills measurement approach:

  • Inventory of skills for an employee
  • Evaluation of individual employee gaps against expected skills and proficiency levels
  • Insight into employee engagement in personal career development

Addressing talent challenges with comprehensive skills measurement

Employers can gain comprehensive insights by combining rated skills approaches with inferred or validated skills methods to address common talent challenges, including:

An unclear skills picture

Only 47% of employees feel their managers understand their current skills.  If workers’ capabilities, motivations and potential are not recognised by leaders, career paths become unclear. Skills ambiguity therefore has a knock-on effect on talent development, career progression and overall employee satisfaction.

Limited internal mobility

Companies are underutilising skills insights. In fact, 48% of companies do not consider skills insights for career pathing and talent mobility, meaning they miss out on opportunities to use valuable data to enhance employee development and retention.  For employees, this missed opportunity caps career growth and limits internal mobility.

Lack of agility

Businesses are increasingly making the shift to skills in pursuit of growth. In 2025, 53% of HR leaders indicate that designing talent processes around skills is a people priority. Despite their efforts to become skills-powered organisations, 79% of executives believe their businesses need greater agility in talent processes to pivot the workforce towards changing business priorities. Without accurate skills measurement, agility remains elusive.

Three steps to perfect your skills-measurement strategy

  1. Establish an internal skills-measurement playbook to drive efficiency, effectiveness and governance across your organisation.
  2. Design approaches to measure the skills of a worker population, considering needs analysis, tool design and selections, insights development, and activation.
  3. Leverage skills-measurement tools such as Mercer’s Skills Gap Analysis Tool.

A strategic shift towards skills measurement

The pressure is on to increase innovation and do more with less. As a result, employers are looking to skills to fuel their growth. There is a clear need for a more strategic, technology-driven approach to skills measurement through the use of a portfolio approach that encompasses rated, inferred and validated skills. For many employers, starting with rated skills data allows them to build a holistic view of their workforce capabilities.
Mercer’s Skills Gap Analysis Tool

Make better decisions with a clear picture of skills

Discover how Mercer’s Skills Gap Analysis Tool can transform your workforce planning and unlock the potential of your team.
Learn more

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