How L&D can create value: Focusing on skills development

Skills: A top organisational priority

The CIPD’s Learning at Work 2023 report revealed learning practitioners ranked skills shortages in the top four organisational development priorities, trailing only concerns about growth, cost reduction, and productivity.  Notably, 21% identified this focus, a significant increase from 15% in the Learning and Skills at Work 2021 survey, reflecting a growing urgency to address skills challenges in today’s workplace.

When L&D practitioners were asked about their personal work priorities, addressing skills gaps was the top focus.

This priority was also present in the CIPD’s Effective Workforce Reporting report, where 42% of leaders and 47% of HR leaders identified skills and labour shortages as a key challenge.

What fuels the focus on skills?

Wider research highlights organisational factors driving the increasing skills focus including: 

• the substantial organisational cost of missing skills ^[3]
• skills underpinning resilient organisations ^[4]
• leaders now expecting their people to upskill on the job ^[5]
• hiring for skills being more predictive of performance than education or experience ^[6]
• recruiting for skills over qualifications leading to more effective hires long term ^[4]
• graduates, a traditional talent source, often require significant upskilling ^[7]
• employees with a strong skill set rather than a purely academic foundation tend to have longer job tenures.^[8] 

Skills development also has a significant impact on an individual employee’s career prospects with the Essential skills tracker 2023 finding ^[3]: 

• upskilling leads to an annual wage premium of +9.4% to 12%
• 92% of employees see essential skills as crucial for career success and mobility
• 56% of employees would change jobs for better skill-building opportunities
• essential skills can result in a 25% reduction in the odds of being unemployed 

So, a skills focus can reduce organisational costs and losses, boost organisational resilience, improve targeted recruitment, increase retention, drive performance, and improve opportunities for employee growth, development and career prospects.

The need to differentiate between skills and competencies

A key challenge in adopting a skills-based strategy is the common confusion between skills and competencies, terms often used interchangeably. The essential differences are outlined below:

It’s important for organisations to know when to focus on competencies or skills.  

Competency development is most appropriate for: 

• broader proficiency for a combination of skills, knowledge, and behaviours
• performance in complex roles with technical, interpersonal, and cognitive aspects
• long-term holistic development for career progression and organisational growth
• cultural fit aligning behaviours and values with organisational culture and mission
• fostering adaptability, problem-solving, and innovative thinking.

Skills development is paramount for: 

• performance for a specific job or task execution
• technical proficiency 
• implementing structured development for specific abilities
• short-term goals that require immediate capabilities
• standardisation in methods and procedures to ensure consistency and quality.

While competency frameworks can align individual and organisational performance, they often fail to deliver impact by being too generic, complex, difficult to measure, and reactive. A skills-based approach tends to be more targeted, measurable, and adaptive, driving speedier performance improvements.

Determining what should be in an essential skills mix

A key hurdle in implementing a skills-based approach is defining the essential skills needed across the organisation or for specific roles, given the numerous and extensive frameworks available. ^{[1] [3] [5] [9] [10]}

In approaching this task, it may help to consider the work of the Essential Skills Taskforce, where the CIPD played a key role in developing a research-based framework of essential skills for education, work, and life. These skills include listening, speaking, problem-solving, creativity, staying positive, aiming high, leadership, and teamwork. ^[11]  

In defining essential skills in a given context, it is important to consider:

1. Aligning skills with strategic organisational goals and future needs.
2. Prioritising skills that drive key performance outcomes.
3. Focusing on transferable, in-demand skills that support adaptability.
4. Involving leaders and key stakeholders to ensure relevance and buy-in.
5. Using data and insights to inform choices.
6. Balancing technical, digital, and interpersonal (soft) skills.
7. Reviewing and updating skills regularly to stay current.

Leveraging a more agile approach 

Historically, face-to-face learning was the significant component of many organisations' development delivery methods.  

Learning at work 2023 highlighted a significant -61 net decline in face-to-face learning and a +65 net increase in digital approaches, alongside a notable +24 net rise in technology investment; shifts based on pre-pandemic data. In 2023, whilst there was a slight net decline in the use of face-to-face (-4), there was a substantial net rise (+42) toward digital solutions.

This indicates that more organisations are offering flexible, accessible, and personalised learning, which is essential for effective skills development. 

While organisations continue to use in-house programmes (43%) and external conferences and workshops (41%), there are notable increases in interventions that can be highly effective in skills development. For example, job rotation, secondment, and shadowing rose from 16% to 26% since the 2021 study, with peer collaboration rising from 30% to 36%, and apprenticeships from 30% to 35%. 

Despite these shifts, only just over half (59%) of the respondents felt able to respond agilely to changing organisational skills needs. 

For responsive skills development learning in the flow of work, a term coined by Josh Bersin and explored in the CIPD’s podcast is a necessity. Skills development is invariably most effective when delivered in the workplace and moment of need ^[12] through accessible interventions. ^[13] 

Learning at Work 2023 notes the current or planned adoption of technology to assist such approaches although there is clearly room for greater ambition. For example, collaborative working (34% currently using and 9% planning to use), bitesize film and video (22% and 6%), job aids and performance support tools such as infographics and checklists (17% and 8%), podcasts and vlogs (15% and 6%), digitally supported coaching and mentoring (15% and 9%), mobile apps (12% and 7%), and curated content (3% and 4%). 

Additionally, the report highlights the low adoption of emerging technologies like augmented and virtual reality (4% and 3% in use), and AI (5%although it must be noted that these statistics represent the state of play in 2023, and it is likely that experimentation with AI is increasing. These technologies offer excellent options for skills development, indicating key opportunities for exploration. 

So, an effective skills development strategy requires an agile approach, with accessibility, flexibility, digital solutions, and a commitment to leveraging emerging technologies.

Implementing practical performance improvements 

Skills development by nature should drive impact by focusing on practical performance improvements. Yet, Learning at Work 2023 shows a decline in leaders recognising L&D's impact on organisational priorities, dropping from 81% in 2021 to 67%. And, despite the skills emphasis, only 8% are prioritising learning transfer to the workplace. 

What can we adopt from those who are successfully driving impact? 

• Those achieving learning transfer proactively identify performance issues before recommending solutions. Whilst more L&D professionals are adopting this approach (57% versus 32% in 2021), nearly half operate without aligning interventions to clear performance needs. Alarmingly, only 50% of respondents reported a process to assess learning impact, however, those practitioners valued by leaders were significantly more likely to have one in place (63% versus 33%). 
• They have the buy-in of senior leadership and line managers. Learning at Work 2023 reveals limited manager involvement in facilitating and assessing its impact. Only 29% of line managers said they were involved in assessing learning and development impact, and only 36% of line managers support their teams to transfer what they have learned from L&D activities back into the workplace. Yet, line managers are critical to supporting skills development and learning impact, as highlighted in Dr. Ina Weinbauer-Heidel's rigorous research, The 12 Levers of Transfer Effectiveness.^[14] 
• They utilise AI. Increasingly, impactful skills development is being enhanced by AI, which can analyse workforce experience and performance data to identify skills gaps, recommend personalised development experiences, and provide performance support.  

So, to boost the impact of skills strategies, it's essential to use diagnostic approaches like performance consulting. This involves partnering with your people to identify skills gaps and co-create targeted performance-enhancing initiatives, backed by a clear plan to track impact. The use of AI and data empowers opportunities to create personalised and targeted development. 

What now? 

• Let’s stop… 
  - focusing purely on competencies, and instead elevate the importance of skills 
  - relying on formal learning and instead elevate accessible, agile learning in the flow of work. 
• Let’s start… 
  - leveraging performance consulting, engaging stakeholders and planning for impact tracking 
  - exploring the use of emerging technologies in skills development and performance support. 
• Let’s continue… 
  - embracing evidence-based research to inform future skills needs in organisations 
  - creating learning solutions that can be accessed any time and any place within work.

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