A New Chapter in the Future of Work: Jobs Are Out, Skills Are In

The nature of work is undergoing a profound transformation, challenging long-held assumptions about jobs and the traditional employment model. Deloitte's 2023 Global Human Capital Trends report found that an overwhelming 71% of workers said that they perform work outside of the scope of their job descriptions, and our skills-based organization report discovered that 81% of business executives reported that work is performed across functional boundaries. This prompts us to question how relevant the concept of jobs is within our rapidly evolving work ecosystem.

As organizations face the inefficiencies of a job-based approach and seek new ways to meet the demand for agility, agency, and equity, they recognize the importance of shifting toward a skills-based approach to thrive in the future of work. Leading organizations now use skills more than jobs as the focal point for all workforce practices throughout the talent life cycle -- from hiring to careers to performance management to rewards. 

The Decline of the Job-Centric Model

For centuries, jobs have served as the foundation of work, providing individuals with specific roles, responsibilities, and titles. They are, in essence, a predefined set of functional responsibilities assigned to an individual employee. However, the legacy of the job-centric thinking defined by the Industrial Age is becoming outdated in today's ever-changing work environment. Deloitte data shows that today’s workers are increasingly engaged in tasks beyond their prescribed job descriptions. The rise of the gig economy is a major contributor to the decline of the job-centric model, as gig workers are not tied to traditional full-time jobs but are instead working on a project-by-project basis.

Beyond the gig economy, only 19% of business executives and 23% of workers say work is best structured through jobs. Rather, they embrace a more fluid and agile approach to work, often collaborating across functional boundaries to achieve desired outcomes. Not only does this give workers more agency and choice in how they apply their skills to work, but it improves equity as well; 80% of business executives say making decisions about hiring, pay, promotions, succession, and deployment based on people’s skills rather than their job history would reduce bias and improve fairness. This shift challenges the traditional notion of jobs as static, fixed roles and highlights the need for a more flexible and adaptable framework. This new operating workforce framework is called “the skills-based approach.”

Embracing a Skills-Based Approach

It’s hard for many businesses to imagine any other way of managing work, despite the inherent inefficiencies of a job-based approach. However, an increasing number of businesses are paying close attention to the skills possessed by individuals, recognizing them as the true currency of their workforce. Workers are unique, whole individuals -- each with an array of interests, motivations, preferences, and needs. Prioritizing the individuality of each worker enables organizations to tap into their diverse capabilities, using each of their unique strengths to tackle multifaceted challenges and harness the full potential of their workforce.

The benefits of adopting a skills-based approach are manifold. First, it allows organizations to place talent more effectively. Instead of being confined to specific roles, individuals can be assigned to projects that align with their expertise, fostering greater productivity and job satisfaction. Unilever, for example, has embraced this approach and employs an internal talent marketplace to allow skills to move fluidly between projects and tasks across the entire organization. Virtual career assistants that use artificial intelligence can mine skills and interests to match employees with suitable jobs or identify new learning and development opportunities.

Moreover, our data suggest that organizations prioritizing skills are better equipped to retain top performers. When workers feel valued and that their skills are recognized and utilized, they have more loyalty to an organization, which can reduce turnover rates. A skills-based approach also builds diverse and equitable outcomes for the entire workforce. By valuing skills over traditional qualifications like job history and degrees, organizations can create opportunities for individuals from diverse backgrounds and perspectives, promoting more inclusivity and representation in their workforce. In fact, 75% of executive respondents to our skills-based organization survey said hiring, promoting, and deploying people based on skills can help democratize and improve access to opportunities. For example, Merck and IBM, two of the largest companies in the OneTen coalition, are committed to hiring, upskilling, reskilling, and promoting one million Black workers without four-year degrees in family-sustaining careers by shifting to a skills-first approach.

The Competitive Advantage of Skills-Based Organizations

As we navigate this new chapter of work, it becomes increasingly clear that a skills-based approach is essential for organizations to thrive. Businesses that embrace this new approach will likely succeed in the age of an empowered workforce, shifting work models, and evolving customer needs. To do so, organizations must redefine work based on the skills it requires rather than as a job.