Paradigm Shifts: Agile HR Practices and Skills-Based Organisations

To close the 2023 Top Employers Inspire event, I sat down with my colleague Quinton van Es, Director of Research & Insights for Top Employers Institute, to discuss two closely linked topics –the funadamental shifts in HR practices and the rise in skills-based organisations. These ideas are reaching a tipping point in business practices and creating paradigm shifts.  

At Top Employers Institute, we certify organisations based on best practices, which requires us to look ahead at developing industry trends and consider those that are proven successful. Agile HR practices and skills-based organisations are becoming more mainstream when there are many disruptions and uncertainties. From a business perspective, now more than ever, organisations need to be resilient, adaptive, and human-centric. We discussed how these two practices are enabling organisations to do just that.  

From the basic tenets of each to the more significant industry implications to our personal experiences with each principle, our discussion covered a lot of ground. In this article, I'll summarise the highlights of our conversation. You can watch our discussion in full at the end of the article.  

What Are Agile HR Practices?  

Working agile has long been established as a best practice for IT where rapid innovation was a necessity. Gradually, the ability to quickly adapt has become a strategic imperative for organisations, causing agile practices to spill over into other areas and functions. In HR, operations are moving away from a rules- and planning-based approach toward a simpler model based on feedback.  

Organisations can struggle with agile HR operations because many things, like payroll, feel fixed–there is no trial and error. However, the application is more of a big-picture consideration. Quinton explained, "When it comes to working agile, we are used to seeing these principles applied to projects. In the context of operating models, a lot of organisations are more agile than they realise because they already have a continuous feedback loop in place." The essence of this approach is about regularly receiving and responding to feedback rather than specific tasks. 

There are considerable variations in how organisations apply agile principles to their HR operations. Quinton gave examples, "some organisations focus on the mindset and values. Other organisations are taking a more methodological approach and just implement scrum." Each approach has its pros and cons. There is no one solution, which is part of what makes this paradigm shift so interesting.   

Skills-based Organisations 

Historically, jobs were the dominating structure for work. Job descriptions and titles defined who did what and how their work was managed and evaluated. This approach is falling out of favour because it hinders many organisational objectives, including growth, innovation, agility, and the ability to offer employees a positive work culture.  

"A job-based approach is very linear and predictive but it's also a reductive view of work and the individual. In contrast, skills-based organisations zoom in on specific skills and the whole person to consider how an employee's talents may best be applied. It's a more human-centric approach," Quinton said to highlight why this paradigm shift is happening. Another reason it's gaining popularity is that it offers a great deal of flexibility and adaptability.   

As jobs shift from being the primary construct for work to being one of many factors, organisations must adapt their HR practices. HR writes job descriptions, sets compensation, and manages performance reviews–all tasks based on defined jobs. Skills-based organisations thoroughly shake up this model, reimagining employee management, which is partly why agile HR practices and skills-based organisations are often closely linked.  

Benefits of Shifting 

Working agile means iterations happen quickly–things are done slightly better each time. Employees do not have to wait long to see their feedback in action. Additionally, employees get used to adapting and a certain level of ambiguity. This model fosters a culture of continuous improvement and creates better engagement.  

A human-centric skills-based approach supports employee well-being. It considers the whole individual, not just their education and experience. As a result, organisations can tap into larger talent pools, and current employees have a greater sense of mobility. "A famous example here is Google," explained Quinton, "They acknowledged that they made a mistake by just relying on credentials because performance dropped. They figured out that they needed to consider motivation and individual skills more than specific credentials."    

Advice for Getting Starting   

Starting small always helps ease the transition–it creates less of a shock to the system. "Why not put someone from IT that's used to working agile on the HR project team and see what comes from that," Quinton suggested.  

It is also helpful to identify your value proposition. A clear understanding of your business case for making these changes will justify the required resources. A valuable next step could be a readiness assessment. This process will let you see if your organisation is ready to move into that domain and identify potential challenges.  

From my experience during transitions, the art of letting go is essential for leadership. As you guide your organisation through significant operational changes, accepting uncertainty is a requirement. If you don't, progress is seriously inhibited.  

I invite you to watch our complete discussion to hear more examples of how organisations that are Certified Top Employers put these principles into action. The applications are quite varied and continuously evolving, making agile HR operations and a skills-based approach to work exciting trends to follow.