Skills Snapshot Survey: power up your approach to talent management 

Shot of a mature couple surfing at the beach   
Shot of a mature couple surfing at the beach    

Whether the issue being addressed is upskilling, reskilling, career pathing, workforce planning or skills-based rewards, more companies are turning to skills as a vehicle to propel their talent management forward. For HR leaders, the benefits of skills-based practices are clear, and it is now one of their top five priorities.

The fourth edition of Mercer’s annual Skills Snapshot Survey outlines how skills-first talent strategies are progressing. Skills-based hiring has risen in recent years, and job adverts are increasingly likely to outline required skills in addition to traditional responsibilities, tasks and qualifications. Candidates are also more likely to be screened against skills, rather than simply their job history. But, when it comes to truly embedding a skills-first mindset into the talent management process, some companies are still just starting out.

The skills game is advancing, and, for many companies, there are opportunities to leverage and gaps to close. Let’s explore the key findings of the Skills Snapshot Survey — specifically how businesses are already using skills, the key benefits they are enjoying, and what you need to know before you go all-in on this journey. 

How businesses are making the most of a skills-based approach

For those businesses that have already embraced a skills-first approach, it is most commonly applied to career development (72%)​, talent acquisition (69%)​ and performance management (64%). At the other end of the scale, projects and gigs (23%) and work design (22%) are the least likely to utilize the skills-based approach.

This may be because the first three practices are low-hanging fruit, thanks, in part, to enabling technologies like Workday, Degreed, Gloat and Eightfold, which have built-in skills functionality. Establishing an internal talent marketplace (for projects) or assessing and redesigning the very nature of each job within an organization (work design) can be a little knottier, but that doesn’t mean they are not achievable. 

Leveling up talent management and rewards

Skills-based practices backed by technology and data put businesses in good stead for the future of work, which demands more agility and foresight from employers. There are a number of other specific advantages for businesses. Indeed, businesses report that skills-based practices benefit them by:

  • Improving attraction and retention of critical skills
  • Enhancing workforce productivity
  • Improving workforce agility
  • Broadening career paths and furthering employee development
  • Instilling a culture of learning

Skills-based talent management can also provide clarity around job expectations, better align talent to changes in demand, and improve adaptability (which is particularly important given the way automation and AI are set to change jobs).

In comparison, fewer employers are implementing skills-based rewards programs. There’s an untapped opportunity here — one that comes with many potential benefits. So what might these benefits be? 

According to employers, plugging skills into the rewards process can:


Attract and retain premium skills


Incentivize skill development


Incentivize career progression


Develop a fairer approach to pay


Develop a better investment model

The businesses that have already implemented skills-based rewards programs most often link technical or hard skills to rewards, followed by qualifications and certifications. While skills aren’t set to replace standard practices (such as individual performance), they are increasingly fed into year-end review processes.

What stands in the way of a skills-powered organization?

Ironically, skills. More specifically, the leaders who responded to the Skills Snapshot Survey cited limitations in HR’s capability (or capacity) as the top barrier to becoming a skills-powered organization. Too much change was also a concern, suggesting that for some businesses transformation plans may still feel out of reach. Often, this is a sign that short-term gains need to be prioritized in specific areas of a business, before skills-first practices are built-out more broadly.

Launch your skills-first approach with these questions

  1. What skills does my organization need?
  2. Should our skill expectation vary by job?
  3. How will we know whether individuals have the skills for the future?
  4. How will the business reward top skills?
  5. How will the business operationalize its skills-based strategy?

Looking to power up your skills game?

Find out the five key steps for a skills-first approach to talent and rewards in the 2023-2024 Skills Snapshot Survey report
About the author(s)
Peter Stevenson

Go-to Market Leader, Skills Edge

Brian Fisher

Global Solutions Lead for Skills & Careers

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