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Getting skills transformations right: The nine-ingredient recipe for success

November 28, 2021

Companies are grappling with an urgent need for new skills to support significant changes in business priorities and in how work gets done. According to our recent McKinsey Global Survey on reskilling, most respondents say that skill building is the best way to close those gaps, ahead of hiring, contracting, or redeploying employees. Sixty-nine percent say they have doubled down on skilling efforts since the pandemic began and are reaping clear benefits. Among organizations that have begun a large-scale, programmatic skills transformation, between 71 and 90 percent say it has had a positive impact on their ability to realize company strategy, employees’ performance and satisfaction, and their reputation as an employer.

While the design and implementation of a large skill-building program is difficult to get right, we have found that there is a clear recipe for success consisting of nine key practices. At the organizations that have implemented all nine practices, respondents report a nearly 100 percent chance of having a successful skills transformation—which is 2.5 times higher than the success rate for organizations that have failed to implement at least one of the practices. These practices are deployed across three iterative phases of a skills transformation: assessing potential skills gaps, developing a skills strategy, and reimagining infrastructure for skilling at scale.

Assessing potential skills gaps
This phase consists of rapid workforce planning to identify skills gaps. This involves comparing the company’s current skills with the demand for those skills needed to deliver on its strategic ambition, digital agenda, and overall business model. The three practices in the first phase are the following:

  • Assessing demand and/or need for specific skills in the future.
  • Determining the current supply of specific skills.
  • Analyzing skills gaps, including development of the business case to close them.

Developing a skills strategy

The second phase focuses on how companies shape the skills strategy to close anticipated gaps and ensure that the workforce is future-ready. For skill-building components of that strategy, important decisions in this phase include which learning formats to use, how to design and deliver learning journeys to employees, and rolling out the required infrastructure and governance. This phase comprises the following three practices:

  • Designing a portfolio of initiatives to close skills gaps.
  • Designing tailored learning journeys and delivery plans for specific roles or groups of employees.
  • Deciding on learning infrastructure and enablers.

Reimagining infrastructure for skilling at scale
The last phase involves the execution and delivery of skill-building efforts at scale. This involves ensuring that the workforce is building new skills, that there are dedicated organizational structures in place for learning, and that there is a rigorous yet dynamic system for tracking the impact. The following three practices form the final phase:

  • Launching a “skilling hub” or other organizational structure dedicated to learning.
  • Delivering a skills transformation at scale across the organization via comprehensive capability-building programs that address the most critical skills needs.
  • Implementing dynamic tracking of workforce and impact.

All nine of these practices are important—there are no shortcuts to take. When companies follow all nine practices, research shows that success is nearly guaranteed. When a midsize European bank needed to reskill 3,000 tellers as relationship managers, the business first used a survey to assess skills gaps and segment employees. It then created and initiated tailored reskilling journeys, including a buddy program and new digital learning hub. The organization then sent regular surveys to gauge employee engagement and learning needs. Their comprehensive approach helped ensure a thoughtful, thorough, and ultimately successful reskilling program.

Many companies are now at a critical juncture. Dramatic changes in talent development and skill building are needed to thrive—or even survive—in the future. Organizations must take a holistic approach to skills transformations and implement all nine of these practices to be successful.

By Aaron De Smet, Angelika Reich, Bill Schaninger


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