Workday, Inc. (NASDAQ: WDAY), an AI-driven platform for workforce and financial management, has released its latest report, The Global State of Skills. The report highlights a pressing challenge for businesses worldwide: over half (51%) of business leaders fear a future skills gap, while only 32% are confident that their organization possesses the necessary skills for long-term success.
As artificial intelligence continues to revolutionize the economy, the skills required in the job market are rapidly evolving. However, many organizations lack a clear understanding of their employees’ current skill sets. Only 54% of leaders report having a clear picture of their workforce’s competencies.
This growing uncertainty reveals the limitations of traditional talent management approaches, which focus on job titles, academic degrees, and previous employer positions. In response, organizations are accelerating the transition to skills-based talent strategies. These strategies prioritize an individual’s capabilities over conventional qualifications, offering a more flexible, data-driven approach to hiring, development, and workforce deployment.
Key Findings from the Study
Skills-based strategies are no longer a concept of the “future of work” but a source of competitive advantage. Eight out of ten (81%) business leaders agree that adopting a skills-based approach drives economic growth by improving productivity, innovation, and organizational agility.
This shift is already underway. More than half (55%) of organizations worldwide have begun transitioning to a skills-based talent management model, with another 23% planning to start this year.
Beyond business impact, skills-based strategies can help bridge gaps in access to career opportunities. Among the key benefits of implementing this approach, leaders cite broader employee access to job opportunities (82%), greater workplace equity (72%), and lower unemployment rates (61%).
AI Accelerates the Shift to Skills-Based Talent Management
Artificial intelligence serves as both a catalyst and an enabler of this transformation. AI is not only reshaping workplaces but also helping organizations build a more flexible, skills-driven workforce. The study indicates that AI plays a crucial role in this transformation by:
- Automating routine and repetitive tasks (52% of leaders agree),
- Enhancing decision-making through data-driven insights (52%),
- Personalizing learning and development programs (47%),
- Predicting future skills needs (45%).
“At Ferring, we are fostering a culture of continuous learning, where employees can acquire new skills, explore opportunities, and participate in projects aligned with their professional ambitions,” said Lynn Van Oossanen, Global Head of People Solutions at Ferring Pharmaceuticals. “With AI-driven technology, we can now identify skills gaps in real-time, allowing employees to pursue new growth opportunities while helping managers more effectively find the right talent.”
AI is Advancing, But Human Skills Remain Irreplaceable
While technical skills are among the most in demand, Workday’s study also highlights the critical need for uniquely human capabilities. Social functions such as communication and teamwork, along with individual strengths like resilience and creativity, are now among the most significant skill gaps in organizations. Digital proficiency, including AI and software usage, follows closely behind.
This aligns with the findings of Workday’s Elevating Human Potential: The AI Skills Revolution report, which underscores that relationship-building, empathy, conflict resolution, and ethical decision-making are essential for success in an AI-driven economy.
“AI is reshaping the workplace, but the human element has never been more crucial,” said Chris Ernst, Chief Learning Officer at Workday. “Organizations that adopt a skills-first approach will not only harness AI’s potential but also unlock human ingenuity in new and transformative ways.”
Challenges and Future Directions for Implementation
The adoption of skills-based strategies is gaining momentum, but it is not without challenges. Key barriers identified by business leaders include:
- The time required to reskill employees (43%),
- Resistance to change (38%),
- Lack of infrastructure to support skills-based talent management (28%),
- Inadequate tools for measuring skills (28%).
The study suggests that technology alone is not the solution. Overcoming these challenges requires a shift in mindset—one that embraces clear communication of benefits (48%) and effective change management (48%). This will enhance the implementation of new strategies within organizations.
The Future of Talent Lies in Skills
For years, skills-based talent management strategies were viewed as aspirational goals. Today, with AI and data-driven insights, they have become a business imperative. Organizations that embrace this shift will not only gain a competitive edge but also future-proof their workforce in an era of rapid transformation. As AI and human talent become increasingly interconnected, the skills-based movement will only accelerate, creating a smarter, more resilient, and inclusive world of work.
About the Report
The findings presented in this report are based on a global survey conducted among 2,300 business leaders at director level or higher in organizations with at least 100 employees worldwide. The study was conducted by Hanover Research on behalf of Workday in November 2024. All respondents were full-time employees in companies across North America, EMEA (Europe, Middle East, Africa), and the Asia-Pacific region, including Japan. Leaders and employees from Workday were not included in the study.
Source: Manager Plus
